Monday 13 May 2019

Global LNG market faces sharp shifts in supply and demand

The global liquefied natural gas (LNG) market is set to see big swings between excess supply and excess demand over the next five years.

That’s according to a new report from Bloomberg New Energy Finance (BNEF), which suggests the market has grown rapidly in recent years, with volumes of exports and imports up 10% last year, with the expansion set to continue.

However, the growth rates of imports and exports are to see sharp shifts between 2019 and 2023, with exports increasing faster than imports this year and imports outstripping exports in 2022/23.

The report estimates LNG supply will increase by 33 million metric tons per year in 2019, reaching a record 358 million metric tonnes per annum (MMtpa).

Ashish Sethia, Head of Commodities at BNEF said: “This year’s expected excess supply of 16MMtpa will be hard for the market to absorb, unless we get a dose of ‘wild demand’ for either a hotter summer or colder winter in North Asia or Europe. If not, pressure will be on LNG prices.”

The report suggests Europe will become increasingly dependent on imports for gas over the next few years.

The LNG market is forecast to tighten by 2023 and European prices will need to be high enough to compete with those of fast-growing markets in Asia and to attract LNG imports.”