The European gas market has played a role in US gas market volatility over the past two years. But the next LNG wave helping to lower European and Asian prices around mid-decade should also result in a moderating effect on Henry Hub. Japanese energy security remains front-of-mind, but LNG procurement challenges may be more manageable with lower demand. Momentum for a floating liquefaction solution in Israeli waters once again spotlights Egyptian upstream risks.

Gas and LNG Service’s LNG Project Database, February 2023 Update – now featuring 2022-23 year-to-date long-term LNG supply agreements.

European gas fundamentals are center stage in our 2023 outlook for the global gas and LNG trade, with storage being elemental to pricing dynamics. Yet, a Chinese LNG demand recovery remains a key risk to the delicate balance that has emerged. Our expectations for LNG FIDs this year have brightened considerably, based in part on foundation agreements concluded in 2022. Market upheaval emerging in 2021, worsening in 2022 and expected to linger for some time have not upended our long-term LNG demand assumptions.

Gas and LNG Service’s LNG Project Database, December 2022 Update

European gas prices still reflect comfortable storage, for now. All eyes are on erosion of the cushion to ensure that a worst-case scenario for the region—and the global gas market more broadly—does not materialize. Yet, the recently agreed price cap compromise will likely result in limited impact on Asia. This year’s LNG contracting activity reaffirmed long-term energy security beyond the short-term scramble. US activity reveals new players and strategies, while reinforcing the region’s growing importance to both supply and pricing.

Forecast data for LNG Market Evolution Quarterly, Q4'22

On the eve of 2023, we are reevaluating the impact of underperforming LNG ventures following a year of upheaval in the LNG trade and ahead of the next supply wave expected around mid-decade. We are also assessing the EU gas price cap compromise to understand the consequences for LNG flows beyond Europe. Finally, a look at Mideast Gulf gas plans suggests possibly greater long-term benefit for Europe.

Energy Intelligence’s update of our proprietary, long-term LNG supply/demand forecast to 2040 sees demand drivers intact beyond short-term energy crisis upheaval. One possible alternative trajectory considers more durable LNG demand headwinds as the price environment elevates concerns about LNG viability. But a much brighter LNG supply outlook helps ease prices and apprehension. The more optimistic supply forecast is not without risks, but even some project sanction delays will not meaningfully alter the long-term outlook.

Energy Intelligence’s update of our proprietary, long-term LNG supply/demand forecast to 2040 sees demand drivers intact beyond short-term energy crisis upheaval. One possible alternative trajectory considers more durable LNG demand headwinds as the price environment elevates concerns about LNG viability. But a much brighter LNG supply outlook helps ease prices and apprehension. The more optimistic supply forecast is not without risks, but even some project sanction delays will not meaningfully alter the long-term outlook.

Data and Graphs for LNG Supply/Demand Outlook to 2040