LNG prices will not decline, market experts have forecast, noting the global market remains tight, new production-related investments will not be completed before 2025, while a cold winter could quickly deplete European gas reserves.
This projection was highlighted by executives representing some of the world’s biggest LNG companies at the 23rd World LNG Summit & Awards, hosted in Athens. Participating officials generally agreed that gas prices will remain relatively high this year due to a number of factors, including geopolitical instability, inflationary pressure and, most importantly, the absence of additional international production capacity.
“Natural gas reserves in Europe are high, accounting for 30 percent of demand in winter. However, if this winter season is cold, these reserves will diminish quite fast,” Anatol Feygin, executive vice president and chief commercial officer of Cheniere Energy, told the event, adding that no significant number of new LNG plants will come on stream in 2024.
Europe is not expected to encounter supply issues this winter as European countries can afford high prices and, as a result, will be able to attract significant volumes for yet another winter, unlike less affluent countries in other parts of the world.
Feygin, along with other LNG industry officials, agreed that LNG prices cannot de-escalate to pre-energy crisis levels if Russian pipeline gas remains sidelined from many markets.