BAKU, Azerbaijan, October 31. The liquefied natural gas (LNG) landscape is set to undergo significant shifts in summer of 2024, marked by the initiation of new export projects and the expansion of existing ones, Trend reports.
These developments are poised to bolster global LNG export capacity, with notable contributions from various regions, according to the Oxford Institute of Energy Studies (OIES).
LNG supply is expected to escalate from several key projects, including Tangguh Train 3 in Indonesia, the Altamira FLNG project in Mexico, Arctic 2 Train 1 in Russia, and the Greater Tortue plant in Senegal/Mauritania. Additionally, Trinidad and Tobago is anticipated to contribute more feedgas, and a recovery in Nigeria's LNG production is on the horizon. Notably, maintenance turnarounds in Sakhalin, Russia, and Malaysia will briefly impact supply in these regions. In the latter half of the year, the Golden Pass LNG export facility in the United States is scheduled to commence operations. Overall, the projection for 2024 suggests a considerable increase in LNG export capacity, with a growth of approximately 29 billion cubic meters (Bcm). Notably, summer 2024 capacity is estimated to be nearly 14 Bcm higher than in the summer of 2023.
On the demand side of the LNG market, China's growth may experience some moderation. While domestic gas demand in China continues to rise, the increase in domestic production and the anticipated expansion of Russian flows through Power of Siberia 1, along with some recovery in Central Asian gas supplies, may limit the growth in LNG imports to China. In other parts of Asia, including Southeast Asia (ASEAN) and South Asia, growth in LNG imports is expected to continue.
The remaining increase in LNG supply may be absorbed by Central and South America, where rising demand in the Caribbean and Colombia is evident. Moreover, the current El Niño phenomenon in the Pacific raises concerns about lower rainfall in Brazil, potentially affecting hydroelectric plant output and necessitating higher LNG imports. Brazil's recent LNG import history reflects this need, with 0.6 Bcm imported from April to September 2023, compared to 1.2 Bcm in summer 2022 and a substantial 5.1 Bcm in summer 2021 when low rainfall impacted hydro output.
The combination of higher LNG imports in Central and South America, coupled with the projected 10 Bcm increase in Asian LNG imports, could absorb much of the rising supply. This scenario suggests that Europe may import a similar quantity of LNG in summer 2024 as it did in summer 2023. However, the outcome hinges on the status of European gas storage at the beginning of the summer injection period. Should Europe need to deplete its storage more rapidly during the winter, due to factors like cold weather or possible supply disruptions, the summer 2024 LNG market could potentially become highly competitive, as Europe vies for LNG with Asian and other global markets.
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