• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 1 hour Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 40 mins Tesla Launches Faster Third Generation Supercharger
  • 3 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 3 hours Passerby doused with flammable liquid and set on fire by peaceful protesters
  • 1 hour Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 5 hours EU has already lost the Trump vs. EU Trade War
  • 8 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 10 hours Iran Finds New Oil Field With Over 50 Billion Barrels: Rouhani
  • 3 hours China's Renewables Boom Hits the Wall
  • 7 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 12 hours Iran's Master Plan?
  • 7 hours Trump On Farage's Radio Show ... #eggcarton

Breaking News:

Oil Rebounds On Surprise Crude Draw

Alt Text

Has US Shale Gas Production Peaked?

Problems are mounting for U.S.…

Alt Text

Can China Double Its Gas Output By 2040?

China is scrambling to double…

Rystad Energy

Rystad Energy

Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products. Rystad Energy’s…

More Info

Premium Content

Major LNG Shortage Increasingly Likely

Liquefied natural gas (LNG) buyers’ willingness to commit to new long-term contracts has increased significantly during 2018 amid expectations of a tighter LNG market. Looking ahead to 2025, Rystad Energy argues a major shortage of liquefied natural gas is looking increasingly likely.

2018 was another bumper year for LNG with strong demand growth driven by Asia. While the market is projected to see very strong supply growth centered on flexible US LNG volumes over the next two years, global demand is growing even faster.

“Rystad Energy forecasts heightened risk of an emerging deficit of LNG supplies post 2022,” says Sindre Knutsson, senior analyst on Rystad Energy’s Markets team.

(Click to enlarge)

By the end of November 2018, contract volumes of long-term sales and purchase agreements (LT SPAs) were up by 38% on a year-on-year basis. Three quarters of these volumes were signed after 1 August, signaling expectations of tighter market among buyers.

(Click to enlarge)

The average duration of contracts has also increased, indicating that LNG buyers are less confident that they can get adequate LNG supply from the spot market. This represents a reversal from the trend seen in recent years.

“We expect LNG buyers to continue to seek flexible contracts, but that the large established Asian buyers – such as Japan, South Korea, Taiwan and China – will continue to rely on long-term contracts to ensure security of supply,” Knutsson adds.

The increased activity in commitment to new LT contracts will help developers to reach final investment decisions and to secure financing for new LNG projects, but such projects need to be firmed up very soon in order to avoid a shortfall. Assuming even a four-year construction period from investment decision, the market could tighten significantly from 2023.

While the increased commitment to new SPAs and higher average durations are indications of increased tightness in the LNG market, Rystad Energy still forecasts excess volumes over the next three years, driven by new US supplies. Less than one-third of the current US wave of supply has started up, leaving the lion’s share of new LNG production to flood the market over the next two years. This could turn around quite rapidly in 2022, as LNG demand growth outpaces sanctioned supply.

By Rystad Energy

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Frank on December 20 2018 said:
    2022? The entire LNG market is more likely to have crashed by then. It's barely economic now with all this free money floating around.
  • LAWRENCE D. WOOD on December 25 2018 said:
    Saying LT contracts means the market is tightening is not correct. One does not enter into a long term contract if the price is up, only when it is down and the seller is competing for business.
    The PRC is doing a stall spin into economic recession with its money give-away to the third world. How do you collect on a road, or railroad for that matter?
    Japan's economy is faltering, so is the rest of Asia's.
    Europe is a financial disaster with its overspending to pay migrants welfare, because the jobs do not exist for those without skills or the language to enable communications. The only sector that is up in the European market is rape.
    Remember the 1980s? Major U.S. banks were encouraged to invest in third world infrastructure and found out the hard way, you can't repossess a road---or what's already in a Swiss bank account.
    I note that the graph indicated yuan . . . I find that interesting. Rystad evdently has an interest in kow towing to the PRC.
    If the U.S. withdraws from Afghanistan, as it has from Syria, and continues that trend, the military operations tempo is headed for decline, meaning less oil and natural gas in that sector; which with speculation has been the drive on any increase along with OPEC playing around, some, but, still there is no real uptick in economic activity, except in the U.S. and the war by the Left against Trump may drag the U.S. back into stagnation.
    Europe is headed for civil war, the PRC for absolute failure with its turn to communist inspired economics. The only hope for Asia is Japan.
    The West is the world market place. And, the West is failing economically. Figure it out.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play