There are major uncertainties over demand in the global liquefied natural gas (LNG) market. And, according to the latest in a series of LNG-focused reports from KPMG’s Global Energy Institute (GEI), this transforming industry is navigating through uncharted waters.
Indeed, the global LNG market is going through a massive period of change. It is globalizing as the buyer and seller numbers and types expand; pricing models are changing under the stress of increased supply and lower energy prices and there are major uncertainties over demand where participants’ expectations on price and plans for new supply hinges on anticipated demand.
The KPMG GEI report, entitled ‘Uncharted waters: LNG demand in a transforming industry’, highlights and discusses the short-, medium- and long-term demand uncertainties:
Looking ahead, global LNG demand is forecast to rise from 238 million tonnes per annum (Mtpa) to between 365 and 420 Mtpa in 2020 and up to 500 Mtpa in 2025.1
Mary Hemmingsen, Global Leader LNG, KPMG in Canada, comments:
"The massive build-up of LNG supply in recent years was predicated on growing Asian demand, which was anticipated to be 70 to 80 percent of global growth. It was expected this demand could be sustained at high prices. But emerging factors cast some doubt on these short- and medium-term rosy demand forecasts. Of the estimated 2020 global demand, 365 Mtpa is firm, while 55 Mtpa is ‘floating’ – moving between different markets, depending on price."
In the long-term, the outlook for LNG demand is naturally more uncertain, but more promising. The KPMG GEI report outlines five main factors that are anticipated to shape LNG demand out to 2030 and beyond:
For more information, download the full report below.
Reach out to KPMG’s U.S. Japanese Practice
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.