The natural gas market will remain very tight for at least the next 30 months, claimed an energy consultancy and brokerage.
Poten and Partners’ Kristen Holmquist explained that additional supplies that could ease today’s high prices were not expected to enter the market until 2023.
Demand is still high even in price sensitive regions, such as the Indian sub-continent. Operational issues were also affecting supplies this year with Norway not expected to export any LNG for the whole of 2021.
She said that this winter’s demand was expected to be higher than seen in the 2019/2020 winter season. Low storage inventories, affecting supplies to South Korea, Japan and Europe, were forecast to continue, especially in Europe.
However, European stocks will benefit from more pipeline gas from Norway and Russia, but this won’t alleviate the overall low storage inventory situation, Holmquist said.
Stocks buildup
Some Chinese buyers were building up stocks ahead of this winter to counter being caught out by higher spot prices, she said.
Should demand rise, the global market will tighten still further, leading to even higher prices. As a result, some players were already beginning to be priced out of the market.
She warned that if the northern hemisphere suffers a cold winter in 2021/2022, then the market will become extremely constrained.
One of the questions going forward was - how much will US exporters be able to send out in a strong market? She thought that there was still some leeway for the US to ramp up LNG exports.
****Hurricane ‘Ida’ looks to have missed the US Gulf’s key LNG export terminals, according to initial reports from the area.
Its track took it to the East of the main LNG export sites.
Sempra confirmed in a statement that ‘Ida’ did make landfall in southeast Louisiana but did not affect operations at Cameron LNG.
