Gazprom Able to 'Delay' US 2nd Wave of LNG: Timera
Gazprom will have the power to influence the rollout of worldwide new liquefaction projects in the first half of the next decade, UK consultancy Timera Energy argues in a blog published September 11.
Timera notes that Gazprom today defends a higher European market share (160-170bn m3/yr) than it historically targeted (about 150bn m3/yr) but that it remains against Gazprom’s interests to push large volumes of new gas into Europe prior to a global re-balancing of the LNG market.
Such action “would only induce a ‘bloody’ short run marginal cost driven price war e.g. by attempting to shut in US export capacity at sub-$4/mn Btu European hub prices,” notes Timera.
However that surplus of ‘shut in’ gas puts Russia in a strong position to be able to moderately discount into Europe, once the current LNG oversupply is absorbed, thus delay albeit temporarily marginal new LNG supply – such as the ‘second wave’ US export projects – if it so wishes, the consultancy argues.
Timera’s blog shows graphics indicating the forecast LNG market balancing point being in 2022. However, a report last week by Cedigaz (featured in NGW’s latest magazine) has already suggested that LNG rebalancing may now not occur until 2023-24, later than many LNG producers have forecast.
Mark Smedley