Asia LNG Demand

How the international market for liquefied natural gas (LNG) expands and evolves is of critical importance to U.S. and Canadian natural gas producers and midstream companies alike. The success of North American-sourced gas in penetrating LNG demand centers--Asia and Europe in particular—will help determine not only how much gas needs to be produced, but how much incremental pipeline and liquefaction/LNG export capacity needs to be developed, and how much upward pressure there will be on U.S. and Canadian natural gas prices. There is a lot of uncertainty about how things will shake out. Today, we conclude our series with an assessment of what we know, what we aren’t sure about, and what we think we’re likely to see happen.

Asian consumers of liquefied natural gas (LNG) hope to use the current supply glut—and the start-up of U.S. LNG export facilities--to their long-term advantage. Their very understandable goal is to up-end the old market structure, which for years has had them paying far more for LNG than their Western European counterparts. How will the coming revolution affect U.S. natural gas producers and the next round of U.S. LNG export projects? Today, we continue our review of the fast-changing global market for LNG with a look at a new set of Asian LNG buyers and at the region’s fast-changing supply/demand dynamics.