The global LNG market absorbed approximately 30 mt of extra supply in 2017, leaving many researchers in doubt whether the market will sustain as we move through 2020. However, according to a few planned LNG projects, the rate of the LNG supply growth is likely to increase further in 2018 with nearly 40 mt of additional LNG supply entering the global LNG market. By 2020, the global LNG natural gas markets are expected to expand and remain oversupplied sufficiently. This is due to the global LNG business continuing to be shaped by effective policy decisions that governments make across the globe with mutual consent. The market is also driven by private sector investments and soaring demands from China demanding a higher surge in production.
According to the International Energy Agency (IEA) reports, massive amounts of new LNG capacity are expected to flood this market globally, in turn, continuing to have well-supplied markets by 2020.
The influence of GCC on the LNG Market
In the past few years, Qatar has marketed additional supply of LNG globally based on more flexible commercial terms, a variety of price indexations, and shorter duration contracts. The prospect of Qatar expansion in the LNG market is providing a competitive edge to the other smaller LNG supply projects. According to a leading gas market outlook report, Qatar is expected to increase its LNG liquefaction capacity by 30 percent and reach 100 million tones until 2024.
China, on the other hand, ranks second-highest in the world as the country ramped up its LNG imports supplying households during winters and war times.
Today, Asia consumes more than 70 percent of the global LNG and due to this, the overall market is gradually expected to increase and become more flexible when under pressure from the oversupply.
Nevertheless, in the far west, the United States LNG production market is on a rise too due to the expansion of shale gas in the past few years.
Overall, the LNG industry is definitely poised for rapid growth and challenges as it is looked upon as a clean and natural gas energy source of choice.