BG CEO optimistic on future LNG demand

“ BG’s own forecast is for LNG volumes to grow between 4-6% on average each year to 2025. Most of this growth will come from China, India and here in South East Asia ,” Lund told the Gastech conference currently being held in Singapore.

According to Lund, the LNG industry is about to enter a period when it will press “ the fast forward button on its evolution “.

BG’s chief highlighted two main factors that will be driving this trend: new LNG exports from the U.S., and diversification of demand.

Significant volumes of new US LNG exports are about to come on stream. In BG’s view, this will change the game, particularly with regard to flexibility and liquidity of supply.

“ The US LNG supply projects have a different business model – buying gas off the grid and passing on a cost-based offer to the market .”

“ These flexible LNG supplies are being purchased by companies with different business models and varied levels of access to end markets. The consequence is a more diverse LNG supply chain,” Lund said.

This will increase the spot cargoes available in the market, enhancing liquidity, pricing transparency and the options available for buyers, according to the CEO.

Lund noted that the industry is not just experiencing rapid growth but also a diversification of demand as more countries are starting to import LNG and multiple buyers are emerging in markets that previously lacked energy competition.

“ Floating storage and re-gas units have significantly decreased the upfront cost and timelines for countries to start importing LNG, ” he said.

BG’s chief said he is confident that we will see more new markets opening in the coming years, and not necessarily in the most likely locations.

“ Three years ago we would not have expected Lithuania, Egypt, Pakistan and Jordan to have become importers. That shows the speed at which markets can open ,” he added.

LNG World News Staff; Image: BG