There will be a worldwide supply-demand gap for liquefied natural gas by the end of the decade totaling more than 100 million metric tonnes per annum — 50% of current U.S. LNG capacity, analytics/consulting firm Wood Mackenzie reports.
This supply gap is the “big prize” for the next phase of LNG export facilities in the U.S. – but competition worldwide to fill the gap will be intense, led by Qatar.
During a late September webinar entitled “North American LNG Winter Outlook 2020,” five of Wood Mac’s natural gas and LNG analyst-experts gave their take on U.S. operations, the global update and outlook, the U.S. winter outlook, and taking a look at the next wave of LNG projects.
“We see the global LNG demand growing at 4% per year this decade,” according to Alex Munton, Principal Analyst, North American LNG at Wood Mackenzie. “There will be a supply-demand gap by mid-decade, which grows to 100 MMTPA by the end of the decade.”
While the future looks bright, U.S. gas supply for LNG currently is in decline, said Ben Chu, Wood Mac’s head of Trading Analytics and Proprietary Data, Natural Gas. “Operators would rather raise free cash flow than raise production.”
Feed gas flowing to U.S. LNG export facilities fell to just 2 Bcf/d from 5 Bcf/d with the advent of Hurricane Laura in August, Ryan Bartley, LNG Analysts, Natural Gas. The good news is by mid-September, so-called nominations of gas to export facilities rebounded to 7 Bcf/d.
And by November, “U.S. LNG exports are expected to be fully recovered,” Chu added.
This winter, American LNG export facilities are projected to ship 8.5 Bcf/d of LNG,” said Amir Rejvani, LNG and Proprietary Analyst, Natural Gas.
The next upswing for LNG facility development in the U.S. will begin in 2023, with production from said complexes to begin in 2028-29, according to Munton.
Asked about U.S. production for the coming winter and summer of 2021, Chu said Wood Mackenzie is forecasting 89 Bcf/d during the coming winter, dropping slightly to 88 Bcf/d next summer. Dry gas production in the States peaked last November at 95 Bcf/d, according to Chu.