Asian LNG imports increased at a record pace up to June 2017. With abundant supply and Asian LNG prices soft relative to coal, the market for Asian LNG buyers has rarely been better. Elsewhere, Egyptian gas production has taken the wind out of the sales of Middle East demand growth. LNG imports into Europe are increasing and this will need to continue, with all the new LNG supply coming on-stream. Global LNG supply will exceed 290Mt in 2017. The ramp-up of new trains in Australia and USA, plus new feedgas in Trinidad, Oman, Angola and Egypt will support further growth into 2018. We expect LNG over-capacity to exacerbate in 2019 and US offtakers will turn to the European market on a greater scale to place volumes. US utilisation will come under pressure as Russia defends market share.
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As global energy demand rises, the market for liquefied natural gas (LNG) continues to expand. Set to increase by 50% between 2015 and 2020, the LNG market is one of the fastest growing in the world. This spectacular growth is transforming the market, with many new companies entering the sector and changing the industry landscape.
This LNG Short Term Outlook report provides an overview of LNG in the gas market.
LNG market participants and advisers can use this report to better understand the long-term role of this market in the global LNG business.
Offering bottom-up market analysis for over 150 LNG supply assets, 28 LNG-importing countries and more than 500 LNG contracts, Wood Mackenzie is the definitive and trusted resource for the LNG industry. We use our robust database and expert industry knowledge to help you understand the dynamics of the global LNG industry and identify emerging trends and opportunities.
Asia LNG supply and demand balance and spot price premium over European price
Recap: Asia saw a remarkable recovery in spot LNG prices, reaching a two-year high in winter 2016/17. Buoyed by cold temperatures and nuclear outages in South Korea, Asian spot LNG price was slightly shy of US$10/mmbtu. However, the Asian premium to European gas prices remained similar to last year as French nuclear outages boosted European gas demand. After winter, prices in Asia immediately dropped to the mid 5's territory as heating demand dissipated and were range-bound between US$5-6/mmbtu. Prices could have decreased further if not for increased demand in North Asia. In H1 2017, North Asian LNG imports have increased by 14% year-on-year, mainly driven by South Korea and China. Asian prices have recovered slightly going into summer as a heat wave in China boosted electricity demand.
Japan LNG spot price
European gas fundamentals
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Commodity market report | Aug 2017
LNG short-term trade and price outlook (Q3 2017)
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