Against all odds, global LNG supply grew by 2% year-on-year in June, despite the continued disruption of flows via the Strait of Hormuz. This highlights the resilience of the global gas market and the effect of the unfolding LNG wave.
LNG exports from the Middle East were down by 70% yoy in June, although exports both from Qatar and the Emirates have been improving. More than 10 brave LNG carriers exited the Strait of Hormuz to supply vital LNG cargoes to Asian markets. This is a clear improvement compared to the first three months of the Hormuz closure.
Non-Gulf LNG supply grew by a staggering 25% compared to last year, largely driven by North America, with the region’s exports expanding by 45% yoy on the back of Plaquemines LNG, Golden Pass, Corpus Christi Stage 3 and LNG Canada.
In addition, we have seen strong LNG supply growth from certain legacy producers amid improving feedgas availability, including in Australia, Malaysia, Russia and Nigeria.
Improving LNG availability is also putting downward pressure on gas prices, with both TTF and JKM down by around 6% compared to May – albeit remaining well above their last year’s levels.
As we enter the deep cooling season in Asia and more storage injections is needed in Europe, competition for flexible LNG cargoes is likely to increase in the second half of the summer. So no place for complacency.
What is your view? How will the summer market play out? How do you see the global LNG balance evolving?
Source: Greg Molnár, LinkedIn
