In this list
Electric Power | Natural Gas | Shipping

Global gas supply in 5-10 years may not be tight given shorter construction cycles: executives

Commodities | Agriculture | Biofuels | Energy | Electric Power | Natural Gas | Natural Gas (North American) | Oil | Refined Products | Metals | Steel | Raw Materials

Market Movers Americas, Aug. 2-6: Western US power prices, Henry Hub could retreat on cooler weather

Energy | Electric Power

Platts Forward Curves – Gas and Power

Energy Transition | LNG | Natural Gas

7th Asia LNG and Hydrogen Gas Markets Conference

Energy | Coal | Emissions | Electric Power | Energy Transition | Natural Gas

Japan's METI aims to start demonstrative carbon credit market in FY 2022-23

Energy | Electric Power | Energy Transition | Renewables | LNG

Setting the stage for hydrogen economy to grow

Global gas supply in 5-10 years may not be tight given shorter construction cycles: executives

Highlights

Construction cycle for LNG projects shortens to three to four years

Technology innovation speeds up construction

Novatek raises run rate at Yamal LNG

Global natural gas supply in the next five to ten years may not be as tight as market expected with shorter project construction cycles, which can have a significant impact on supply and demand fundamentals, participants at the 7th China LNG & Gas International Summit 2021 held over June 23-24 said.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"The total construction cycle of an LNG project used to be five to six years, now it only takes around three to four years for many US projects," Wu Yifeng, general manager of the Natural Gas Department of state-owned PetroChina said, adding that the development and construction cycles for gas fields, infrastructure facilities and LNG carriers have all shortened.

"Korean shipyards used to take 30 months to build a ship, now they only need 20 months, and a similar situation is also happening in Chinese shipyards," Wu said, adding that more gas supply may be brought to the market earlier than expected given the shorter construction cycle.

This was also the view shared by ENN at the conference. "High gas price will inevitably curb the use of gas, even the transformation of energy structure, so as to achieve a balance between supply and demand," Yu Jianchao, Co-CEO with ENN Natural Gas said, adding that the price of natural gas is not expected to rise much in the long run as supply will be sufficient and demand growth from many countries, such as in Europe, the US, Japan and South Korea is limited.

Related: Asian LNG buyers keen on shorter tenures in term contracts: executives

Russia's Novatek plans to bring forward the start date of the third Arctic LNG 2 train project to 2025, earlier than its previous guidance of 2026, S&P Global Platts had reported previously.

Each of the three Arctic LNG 2 trains are expected to have a production capacity of 6.6 million mt/year and are scheduled to be launched in 2023, 2024, and 2025, respectively. China's CNPC and CNOOC each have a 10% stake in the project.

Apart from speeding up the commissioning of the Arctic LNG 2 project, Novatek has also raised the run rate at its existing Yamal LNG project in a bid to bring more LNG to meet market demand, according to Mark Gyetvay, CFO and deputy chairman of Novatek's management board.

"The Yamal LNG project currently is operating at the nameplate capacity of more than 110%, producing an additional 2 million mt/year of LNG, up from the original design capacity of 16.5 million mt/year," Gyetvay said at the conference.

Novatek intends to produce 70 million mt/year of LNG by 2030, of which 80%-85% of the LNG supply will be sold to Asia, with China as its main sales destination, Gyetvay noted.

In addition, Venture Global LNG's construction at the Calcasieu Pass project has also been accelerated due to the innovation of construction technology, Tom Earl, the company's chief commercial officer said.

Global LNG supply was expected to tighten gradually in the next five years due to the delay of final investment decisions on some LNG projects last year.

Besides shorter construction cycles, the uncertainty in demand may also affect the supply-demand fundamentals in the next five to ten years, Wu noted.

"We were unable to predict the COVID-19 pandemic, the release of US liquidity, and the strong growth of China's energy demand due to the return of manufacturing after the pandemic. All these had significant impact on the demand and price of natural gas in the past year," he said.

China's natural gas demand is forecast to grow strongly in the next one or two decades driven by the country's decarbonization targets, bullish economic growth and the liberation of the natural gas market, among others, the conference participants said.

"The country's gas demand is expected to reach 52.6 Bcm by 2030, with an annual growth of around 6%. Its gas demand is estimated to peak at around 65 Bcm by 2035, then slowly move down 43 Bcm by 2060, which will be equal to the level we had forecast for 2025," according to Tang Shanhua, vice president of business operations at state-owned PipeChina.

However, Wu was of the view that demand growth, driven by carbon emission targets, may not be as strong as market expected because natural gas is not a good choice for achieving the carbon neutral target.

"It's still controversial to use natural gas for decarbonization, after all, natural gas still has 50% carbon emission," he said.