A 50% surge in global liquefied natural gas production capacity over the next three years, at a time of shaky demand, may make for a buyers’ market in LNG for a few years but the supply crunch will return later, a BG Group executive said.
“We are about to see a supply surge … It is really unprecedented,” Reuters quoted Elizabeth Spomer, BG North America’s senior vice president, as saying at the CWC World LNG Summit in Barcelona.
“One of the repercussions of this financial crisis will be what happens to the pace of new projects going forward.”
Spomer said new projects due to come on stream over the next three years would make much more LNG available to the market but warned of a supply crunch from 2012-2015 as developers slow plans for new production facilities.
BG estimates that about 14 million tonnes of the super-chilled gas will be sent from the Atlantic basin to Asia in 2008, double the amount sent to Asian buyers in 2007.
But Asian demand has begun to wane and how much LNG consumers around the world will need is unclear, making it difficult to commit to new projects.
“Markets don’t know how much gas they need,” Spomer said.
“With that kind of uncertainty it’s very difficult to do business.”
Wednesday, 10 December, 2008, 09:39 GMT | last updated: Wednesday, 10 December, 2008, 09:39 GMT