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| Will the LNG glut turn into a trickle? Back in 2023 the IEA’s annual World Energy Outlook forecast there would soon be a ‘glut’ of LNG supply, which would start in 2025 and run to 2030. The IEA estimated the new capacity would be equivalent to 45% of existing global supply, most of the increase would be seen from 2025-2027, and the increase in supply would see prices drop by almost 80% from 2022 (when prices were at record levels) to US$6.9/MMBtu (A$11.55/GJ) in 2030. The outlook has changed significantly. The IEA now expects global LNG supply to grow by less than 2% in 2025 (which compares to an average growth rate of 8% between 2016 and 2020), and says global gas demand reached an all-time high in 2024 and is expected to expand further in 2025. Industry forecasts paint a similar picture over the longer term, pointing to ongoing demand growth and the need for increases in supply beyond 2030. Woodside, for example, expects LNG demand to exceed supply from the 2030s with an additional 90 Mtpa of supply required by 2034. Shell’s latest LNG outlook says global demand for LNG will increase 60% above current levels by 2040, driven by economic growth in Asia, the impact of artificial intelligence, and the need to cut emissions in heavy industry and transportation. Shell expects demand will rise by between 223-311 Mtpa by 2040, while supply is expected to rise by 170 Mtpa by 2030, meaning more supply will be needed in the 2030s. The latest forecasts, therefore, suggest that any supply glut may be small and transitory as demand for LNG continues to grow and new supply is needed. There is, of course, uncertainty in each of these outlooks but for the time being the world’s appetite for natural gas shows no signs of abating while the addition of new net global supply is facing challenges and delays (something that is not unheard of in the gas industry). Monthly statistical summary Australia’s February 2025 shipments were 79.1 Mtpa on an annualised basis, compared to 82.0 Mtpa during 2024, 81.1 Mtpa for the 2023 calendar year, and 80.3 Mtpa for January 2025. February 2025 shipments represented 91.8% of nameplate capacity. EnergyQuest estimates that Australian LNG export revenue in February 2025 was $4.94 billion, lower than $5.70 billion in January 2025, reflecting a 19% decrease compared to February 2024, when revenue was $6.09 billion. WA projects earned export revenue of $2.75 billion, Queensland projects brought in $1.59 billion, and Northern Territory projects earned $0.60 billion. |