- China is using LNG at "an alarming rate"
- Current LNG glut could turn into a deficit twice the output of leading producer Qater
- LNG capacity will start declining in some areas only four years from now
The global glut plaguing liquefied natural gas markets may start to dwindle in five years, threatening to spur a deficit equivalent to twice the output of leading producer Qatar.
New projects are needed to fill the shortfall, with demand for the super-chilled fuel forecast to double in the 20 years to 2035.
Buyers in Asia are boosting use of the fuel at a “staggering” pace, Jack Fusco, chief executive officer of U.S. exporter Cheniere Energy Inc., said in a Bloomberg Television interview.
While plants currently in operation or being built will add to global oversupply, aging facilities and shrinking resources in some areas mean capacity will start declining after 2021.
That’s a boon for companies from Royal Dutch Shell Plc to Tellurian Inc. and Novatek PJSC looking to invest in new production in the next decade to meet demand.
“The continuous growth of the LNG market will leave a large margin for the implementation of new projects,” Cedigaz said in the report emailed Thursday.
The U.S. shale boom will make the country the biggest LNG producer by the end of the period, according to the Cedigaz report. Output will end in some nations such as Trinidad and Tobago.
“I foresee that the LNG market needs at least a hundred million tons of new liquefaction capacity above what’s under construction today in order to meet demand needs of the market by 2025,” Meg Gentle, chief executive officer at Tellurian, said by phone Thursday. “Demand is growing more than people expected.”And it's not going to be just China.
There may be a reason China is moving to EVs -- energy requirements are not going to be met by oil or natural gas.
Back to coal. And sooner than we thought.