Global LNG Demand to Rise 6% in 2020: WoodMac
Global LNG demand will grow by 6% year on year to 371mn mt (505bn m3) in 2020, Wood Mackenzie has forecast, while warning that its numbers will need constant revision as the coronavirus (Covid-19) crisis intensifies.
"While the collapse of LNG prices towards US production break-evens was foreseeable, the narrative for the rest of 2020 could not be more unpredictable," WoodMac research director Robert Sims said in a research note on April 1. "An already oversupplied LNG market comes out of a mild winter with high inventories across Europe and Asia, only to face a global pandemic which has already destroyed gas demand across China and looks increasingly set to do the same across the Asia Pacific and Europe."
Gas demand in China, the world's biggest gas importer, is expected to rise by 4-6% this year, compared with a 10% growth in 2019. Its LNG demand is seen rising 6.6% yr/yr to 65mn mt (88.4bn m3).
The LNG market is still contending with the same factors that caused oversupply last year – namely production growth, weak Northeast Asian demand and an increasingly saturated European market.
"Prospects of any quick recovery in the latter two have been dealt a blow by the impending economic downturn many are predicting this year, leaving the only likely balancing item left – a turn down of US Gulf coast production," Sims explained. "We forecast 0.5bn ft3/d of production will be lost through Q2-Q3, but there is risk that this number may prove too conservative if demand drops further."