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Daily Prices

8/22/24

NGI Special Edition:
Ports Unknown

How Will The Next LNG Supply Cycle Impact Global Natural Gas Prices?

This report explores where the global natural gas market is heading, how significantly new LNG will impact natural gas prices, and where those supplies will be needed most later this decade and beyond.

Gain Perspective On The Following:

  • How long will the LNG surplus projected for later this decade last?
  • Will lower prices broaden LNG’s appeal and help spur more demand?
  • What does the LNG supply being built in North America and the Middle East mean for long-term contracts?
  • Will regulatory hurdles and labor market constraints delay U.S. projects?
  • What markets will absorb all the LNG supply being developed?
  • Is European LNG demand likely to continue falling, or will some return if prices go lower?
  • Is import infrastructure being built fast enough in Europe and Asia to match supplies?
  • A closer look at progress on LNG projects in Mexico and Canada

Bonus Content:

  • Breakdown of physical market natural gas price activity throughout the U.S. and Canada
  • North American LNG netback prices and U.S. LNG Arbitrage Curves to Europe and Asia
  • Global LNG and natural gas futures prices, along with key shipping metrics such as vessel rates and freight costs
  • North American LNG export tracker with daily feed gas flows to operating liquefaction terminals
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Editor's Note

The global natural gas market is on the cusp​ of another major chapter in the LNG supply​ cycle, one that promises to far surpass​ each of the previous two waves dating back​ to 2009. As it so often does, the market​ dynamic is poised to shift dramatically,​ which will impact LNG and natural gas​ prices internationally.

Recent years have been characterized by scarcity and deep concerns over energy security that emerged after Russia invaded Ukraine and cut off gas exports to Europe. However, as more liquefaction projects across the world near completion, supply is once again catching up to demand. There is no doubt that a glut will emerge later this decade; what is uncertain is just how long that glut could last.


“The market has to balance at some point because you can’t just store vast amounts of LNG indefinitely.”

Jamison Cocklin, "Lower Prices Seen Broadening LNG's Appeal Later This Decade"
“Price mechanism plays a big role in all of this. It’s kind of the relief valve at both ends…When you’ve got an excess of supply, the price mechanism operates to incentivize more demand. That’s the nature of the market..”

Jamison Cocklin, "‘Gargantuan’ LNG Supply Wave Poised to Flood Market, but How Long Will The Glut Last?"
“...with liquefied natural gas exporters still looking to ink deals for the massive capacity additions they’re developing through the end of the decade, the terms of contracts this year could portend a continued market shift to affordability over security”

Jacob Dick, "‘Next Wave of LNG Supply Squeezing Long-Term Contract Prices"
“LNG from the Middle East, which will come from low-cost producers, is well suited to the high volume demand growth of price sensitive buyers in South and Southeast Asia, and we have already seen aggressive marketing by Qatar and the UAE to these countries – particularly to India.”

Therese Robinson, "Middle East LNG Suppliers Battling for More Asian Market Share as Global Project Queue Grows"
“Going from importing LNG to providing useful energy to some industrial or residential consumers is a heavy lift. These things don’t happen overnight. They take years to develop.”

Jamison Cocklin, "Growing FSRU Demand Expected to Help Balance LNG Surplus Later This Decade"
“Europe is on a trajectory to cut natural gas demand as industrial consumption falls and more renewables are expected to come online, leaving suppliers to focus on fulfilling nascent demand in Asia in the coming decades..”

Therese Robinson, "‘LNG Sellers Counting on Asian Buyers to Soak Up Excess Supplies This Decade and Beyond"

War, geopolitical tensions, regulatory and economic hurdles, along with the complexity of the energy transition, are just a few of the factors likely to influence the trajectory of a supply surplus and its impact on the markets. To be sure, gluts do not last forever, and how the market finds balance will help to shape its future.

This report explores those pathways. NGI’s team of Thought Leaders set out to determine what direction the global natural gas market is heading, how significantly all of the new LNG will impact natural gas prices and where those supplies would be needed most later this decade and beyond.

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