Despite a potential near term oversupply of liquefied natural gas (LNG), investment in new liquefaction projects will be crucial to avoid a possible under-supply situation in the early 2020s, cautioned Qatar-based RasGas CEO, Hamad Mubarak Al Muhannadi
He made the remarks at the LNG 18 International Conference and Exhibition on Liquefied Natural Gas which took place in Perth, Australia.
In his speech entitled ‘The Globalisation of Gas’, Al Muhannadi examined the LNG industry’s changing market dynamics, focusing on the past decade’s rapid increase in production capacity and liquidity, and ever-growing global LNG demand.
“Worldwide, LNG production has increased to over 230 mn tons per year, and we expect it to further increase to approximately 370 mn tons per year by 2020 from developments under construction or projects that have reached FID,” he confirmed.
However, the growth in demand for LNG has been as significant. “Approximately 30 countries currently import LNG, twice the number of countries importing just 10 years ago. RasGas anticipates that the pace of growth will continue, and that many more customers and countries will be importing LNG in the next decade.”
Given this significant increase in global demand, Al Muhannadi indicated that under supply could be the market reality in the early 2020s “if no new projects are sanctioned”.
“As the global market for LNG continues to evolve, we must remember that it is still a business that requires significant capital investment in both the upstream and downstream. In order for companies to succeed in the new global market, they will require a long-term vision and the resilience to overcome short-term uncertainty.”
