There was a certain air of triumphalism surrounding Anglo-Dutch major Shell’s statement in February that the world’s growing supply of LNG would be “comfortably” absorbed by rising demand in 2018, and that the much anticipated glut would never materialize.
This glut has been much predicted, predicated on the apparent surplus of new LNG capacity coming on stream versus predictions of demand rising, but at a slower rate than supply.
If Shell’s position holds, it is an important development because it could launch a new round of multi-billion dollar investments in LNG capacity, targeting an increasingly tight market between 2022-25.
This would have profound effects on the fortunes of many countries, not least those on LNG standby such as Mozambique and Tanzania, not to mention Qatar’s expansion plans for the giant North Field, Russia’s Arctic LNG 2, and the raft of developers waiting to export the growing volumes of “free” associated gas emanating from the latest shale boom in Texas’s Permian basin.
Article by Ross McCracken (Platts)
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