Petroleum Economist: LNG to test market and infrastructure limits

8 January 2020

by Jason Feer

The global LNG market will face significant change as a supply glut, infrastructure constraints and a rapidly restructuring market test market participants

The LNG market has already had a taste of the challenges to come as the past year saw an unprecedented surge in supply that swamped European and Asian markets, overwhelmed global storage capacity and tested the ability of market participants to manage a growing array of risks.

Although it was expected, a surge of US LNG supply has struggled to find markets as slowing demand growth in China, a warm 2018-19 winter that left global storage higher than normal and a well-supplied European gas market have made it difficult for sellers to place cargoes. While Europe has taken large volumes of cheap LNG, Russian and Norwegian pipeline gas supply—combined with full European natural gas storage—has led to soft prices and backed-up supply on the water as ships queue up for limited slots at congested European LNG import terminals. 

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