The LNG supply profile is changing. LNG output is higher at cooler ambient temperatures, a consequence of the liquefaction process, and new projects are coming onstream in areas with greater climatic variation. How will weather drive the seasonality of LNG supply and what are the impacts on the LNG market?
Technology and changing geography
LNG output is higher at cooler temperatures. The refrigeration compressor driver and cooling medium used during liquefaction are sensitive to temperature, with as little as 1 ºC change in ambient temperature potentially impacting LNG output.
With new liquefaction facilities spreading across a wider geography, climate variation will also come into play. Historically, liquefaction projects have been concentrated in desert or tropical regions with limited temperature variation. The main exceptions are more recent projects, Snøhvit and Sakhalin in the Arctic. As a result, weather will increasingly drive the seasonality of LNG supply.
Around 200 mmtpa of capacity is currently under construction or proposed in areas with more than 10°C annual temperature variation, including the US Gulf Coast and Australia.
Senior Research Analyst - Global Gas Supply
In this video, Lucy drills into some of the nuances for the Asian LNG market:
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For more detailed analysis on LNG seasonality changes, please see our recently published insight Changes in LNG Seasonality: the growing impact of weather now available to purchase.
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