The uptake of LNG demand in 2017, is not expected to continue in 2018, with a further decrease to take place during 2019-22. Supply overcapacity in this period will be less than it was expected, because of commissioning delays of new export projects.
According to Bloomberg’s report “Global LNG Outlook 2018”, from 2023 demand is possible to increase 4-7% each year. A potential shortage will be mitigated by further investment on new export projects in 2018-2020.
In 2018, demand growth will decrease to 7.2%. China will lead in this situation, despite a modest rise compared to 2017.
For 2019-2022, Bloomberg expects:
- Further decrease in demand, stabilizing in the 314-330 MMtpa range.
- Modest growth in China is counterbalanced by nuclear restarts in Japan.
- Average utilization of export plants in 2021 would likely be 81%, which is better than expected.
Moreover, the global LNG market seems to be over-contracted from 2018 to 2020. For this reason some buyers can possibly resell cargoes. An increase in demand will result in new contracts. The report estimates the maximum demand for new contracts growing from 13MMtpa in 2022 to 297MMtpa by 2030.
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As far as the supply is concerned, final investment decisions are needed before 2020, in order to have new capacity after 2025. Thus, a revival in contracts is expected in 2020.
You can see more information in the “Global LNG Outlook 2018”
