LNG market to remain tight with limited new near-term supply: Cheniere

It would be difficult for more new LNG supply projects to come online before the mid-2020s, with the market set to remain tight, a senior official from US LNG pioneer Cheniere Energy said May 3.

Speaking at the Flame conference in Amsterdam, Cheniere Marketing vice president for strategy Andrew Walker also said higher global energy demand post-pandemic would also tighten markets.

"We are in an LNG market where we are going to see a period of tightness," Walker said.

Spot LNG prices remain at sustained highs after the Platts benchmark JKM spot LNG price hit a record high of $84.76/MMBtu on March 7.

The JKM was last assessed at $21.90/MMBtu on April 29, still 150% higher year on year.

Current balance

Walker said outside of projects currently under construction, there was limited scope for new liquefaction capacity to come online in the next few years.

"If we unpick the current balance, we have FIDs such as from Qatar that come to market in the 2025, 2026, 2027 timeframe," he said.

"And then we will see additional FIDs that will come within that wave if those FIDs are made shortly."

These included Cheniere's own planned 10 million mt/year expansion project at Corpus Christi in the US where FID is planned for this year. "As you go into the 2026, 2027, 2028 wave, then I think those volumes will be added," Walker said.

"It is hard to see much more LNG than is programmed into the system coming on before then," he said.

Another big unknown for global markets is whether Russian supply to Europe is curtailed.

"There is a big uncertainty in terms of Russian supply into Europe. The world looks very different depending on whether pipeline flows continue into Europe at more or less current rates, or whether we have significant supply curtailments," Walker said.