Senior officials at Royal Dutch Shell expect that the global LNG market would be well-supplied until at least 2025. In its fourth LNG Outlook, Shell said that the market was currently under "weak conditions."
Shell's Integrated Gas and New Energies Director Maarten Wetselaar attributed the weakness to record new supply, mild winters in the last two years, and the coronavirus outbreak. These factors have put prices under pressure. The JKM Asian spot LNG price tumbled to a record low of $2.71/MMBtu last week.
According to Shell, global LNG demand grew by 12.5% to 359 million tons last year. Meanwhile, the industry added 40 million tons of additional supply last year. Shell expects another 20 million tons supply to come online this year, and further 10 million tons to go onstream next year.
Shell Energy's EVP Steve Hill said that the US would contribute to half of the growth while Asia would absorb most of the supply growth this year. However, the coronavirus outbreak might lower demand in Asia slightly, he added.
For the longer-term, the Anglo-Dutch company said that demand would reach 700 million tons/year in 2040. Asia will continue to be the largest LNG-consuming region throughout that year. More than half of the demand growth will come from South and Southeast Asia.
