Key producers of LNG have stated that LNG demand is likely to be higher than supply in the long term unless a significant amount is added to the market. Natural gas is becoming a global commodity for trade, so much so that there is an oversupply expected in 2020.
Further into the future, however, things are looking different.
“Natural gas is truly becoming a globally traded commodity, and the future is bullish for LNG,” Chevron’s executive vice president of midstream and development Mike Wirth said. LNG demand is projected to grow by around 60-70pc over the next decade, he said.
ExxonMobil is also bullish about long-term LNG demand, which could reach 700mn t/yr in the next 25 years, said Robert Franklin, president of ExxonMobil Gas & Power Marketing.
The industry will need to add new capacity if supply is to keep up with future demand growth, Cheniere Energy chief executive Jack Fusco said. “We estimate that approximately 30 LNG trains will need to take FID by 2025 in order to meet forecast demand,” he said, without specifying capacity. “The earliest trains will be needed as soon as the early 2020s, to prevent the supply-demand gap from opening up.”
A supply shortage will emerge in the long term unless investment decisions are taken soon, said Woodside chief executive Peter Coleman. “Globally, only very small volumes have gone to FID in 2016, and 2017 looks set to be another challenging year for the sanction of new LNG projects,” he said.