The LNG supply landscape is becoming increasingly complex. There are moratoria on new LNG projects in key producing countries such as Egypt and Qatar, and continuing problems with LNG supplies from Indonesia, said Wood Mackenzie's head of global LNG, Frank Harris
The demand for LNG has almost doubled in the last decade, increasing from 73 million tonnes per annum in 1996 to 141.5 MTPA in 2005 and growth shows no sign of slowing, said Harris.
Indeed, Wood Mackenzie forecasts that demand will more than treble between 2006 and 2020, increasing from 157 MTPA in 2006 to 488 MTPA in 2020, driven in particular by the rapid expansion of demand for LNG in the US and the continued development of importers such as India and China.
"While LNG demand remains robust, there are growing signs that LNG supply capacity is struggling to keep pace, at least in the short-term," said Harris.
"As the lead time for the construction of a new LNG supply project is currently approximately 48 months, it means that assuming final investment decisions for planned projects are taken imminently and that there are no delays in construction, the capacity should be ready just about in time to meet demand in 2011.
"However, any delays to the development of projects in the probable category could mean that some demand goes unmet and demand will be constrained by supply," Harris said.
On environmental issues, Harris said several high-profile projects (notably Gorgon and Sakhalin) have faced significant pressure from environmental authorities which have extended development and construction timescales and delayed the expected start-up of production.
It is likely that other projects in these locations, for example the proposed Ichthys and Browse projects offshore Western Australia, will face similar challenges, he added.
"However, hopefully the industry will learn from experience and either deal with these challenges more effectively in future or take a more realistic view of development timetables, meaning that supply is not delayed unexpectedly," he added.
Harris also touched on the issue of politics and LNG of which "Iran is perhaps currently the best example."
Wood Mackenzies current forecast of Iranian LNG exports in 2020 is 40 MTPA, "but it could just as likely be zero if there is a major escalation of the current nuclear stand-off with the West."
Politics can also impact the development of LNG supply because local political pressures can lead to the decision to divert gas resources to local rather than export markets, Harris added in his presentation.
Politics can also impact production from existing LNG plants, he said.
"In Indonesia longer-term output from the Bontang plant is extremely uncertain because Government policy is encouraging the diversion of gas to local markets rather than to LNG exports. This is having a major impact on the roll-over of existing contracts with Japanese buyers," Harris said.
"With more realistic development timelines there should be a lower likelihood of delays to supply constraining demand," he added. "There will, however, always be random events and factors that cause delays, such as political changes and these will remain outwith the industrys control," he said.
Meanwhile, it was also decided in Barcelona that the next conference in the series, LNG 16, would take place in Algiers, Algeria , on April 18-21, 2010.