A flood of liquefied natural gas (LNG) export projects due online worldwide in mid-decade will vie against lower-cost renewable energy and a revived nuclear power sector, which could rock gas prices and hurt some proposed projects, analysts say.
Proposed and approved new LNG plants would boost LNG supply by 67% increase to 636 million tonnes per annum (mtpa) by 2030 from 2021 levels, potentially saturating the gas market.
"There's over a trillion dollars of natural gas infrastructure being built in the world today. There's a set secular shift and natural gas that is here to stay," said Jack Fusco, CEO of LNG exporter Cheniere Energy at a conference in Houston last week.
In Qatar, a massive LNG expansion project will add 49 mtpa by 2027. U.S. projects could add 125 mtpa (16.4 billion cubic feet per day) of capacity by late 2027, according to data compiled by BTU Analytics, a FactSet company.
In a taste of the potential volatility those projects might face, LNG prices last year soared on European demand, then slid as storage filled and customers pushed back against the high prices and switched to other energy sources.
That shift is only going to accelerate. In 2021 alone, wind and solar's share of global power generation jumped to more than 10% from just 1% a year earlier, climate think tank Ember estimates.
At the same time, nuclear is rebounding: Japan aims to boost nuclear's share of its power to at least 20% by 2030 from less than 7% last year. France is proposing to build six nuclear reactors by 2035.
Analysts see LNG prices remaining strong until around 2027, but after that they may fall as the demand outlook is hazy.
All of this is bad news for Russia whose export market has already been hurt by sanctions following its aggression against Ukraine.
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