Commodity Market Report
Global gas markets long-term outlook 2020: Costs
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Report summary
This report discusses the methodology and assumptions underlying our gas supply cost analysis in our Global Gas Model and Global Gas Service. We also look at how the cost of gas evolves over the forecast period and how this impacts our view of gas pricing in the medium and long term. Low prices, cash flow constraints, market uncertainty and travel restrictions have slowed progress and dented confidence in sanctioning new capacity. The majority of new LNG investment has been delayed to at least 2021. Before 2025, small-scale brownfield developments are more likely to be sanctioned than higher cost greenfield developments. Beyond 2030, gas demand growth in North America will slow down, putting pressure on Henry Hub and in turn global prices. However, as LNG demand continues to grow, more expensive projects will be needed to fill the supply-demand gap. Consequently, global prices will rise to reflect the cost of this new supply.
Table of contents
- Methodology and assumptions
- Near term - market rebalancing and the cost of supply delivery
- Long term – Project sanctions in 2019 and Qatari expansion limit space for new projects until late 2020s
- Global LNG supply and demand delivered to Japan (2025)
- Global LNG supply and demand delivered to Japan (2030)
- Delivered cost to Europe
Tables and charts
This report includes 11 images and tables including:
- Chart 1: SRMC of global LNG supply over summer 2020
- Chart 2: European spot price vs. the delivered cost of US LNG
- Russian gas to Europe via Nord Stream or Nord Stream 2 from the existing and new upstream developments
- UK production and costs
- Norway production and costs
- LNG breakeven cost stack shipping to Asia
- US LNG competitiveness when shipping to Asia
- Chart 8: Global LNG supply and demand delivered to Japan (2025)
- Chart 9: Global LNG supply and demand delivered to Japan (2030)
- Northwest Europe cost of supply for selected projects
- Southern Europe cost of supply for selected projects
What's included
This report contains:
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