What could sustain LNG prices “stronger for longer”? Report

Insight 04 July 2023

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Report summary

Our current outlook is for the LNG market to remain relatively tight through to 2025 before a new wave of LNG supply results in yet another structural shift, bringing global gas and LNG prices further down through 2030. Additional LNG FIDs, weak demand or a return of Russian pipeline supply to Europe present downside risks to this price view. But risks that could drive the market into a "stronger for longer" price outlook abound too.

Executive Summary
Introduction: structural shift on the horizon and the drivers that could change that
- WM SPO: LNG growth by year-on-year
- WM SPO: Europe gas demand vs Asia LNG demand
Lower LNG supply growth
- Global LNG supply: WM SPO vs LNG delays scenario
- Focus on Europe balance change - LNG Delays (2030)
No Russian gas/LNG to the EU
- Russia pipe flows to Europe: WM SPO versus Russia EU Ban
- Focus on Europe balance change - Russia EU Ban (2030)
Higher European gas demand
- Increase in Europe Demand: WM SPO vs Europe High Demand
- Focus on Europe balance change - Europe High Demand
Higher Asian LNG demand
- Northeast Asia
- China
- South Asia
- Southeast Asia
- Increase in Asia LNG Demand: WM SPO vs Asia High Demand
- Focus on Europe balance change - Asia High Demand
Conclusion
- Scenarios: Impact vs Probability
- Scenario price sensitivities