After spot liquefied natural gas prices plummeted by two-thirds since May 2014 amid a global glut, European traders are trying to assess how much of the fuel will arrive in the region.These five questions dominated discussions at the LNG summit Monday in Amsterdam at Flame, Europe’s biggest annual gas conference.
When will the glut end?
Over the next five years, Australia and the U.S., the biggest new producers of LNG, will add more than 120 million metric tons of annual capacity, said Andrew Walker, vice president for strategy at Cheniere Energy Inc.’s marketing unit. That’s more than a third of current total capacity.Cheniere in February started the first exports of U.S. shale gas in liquefied form, while Australia is on track to overtake Qatar as the biggest LNG supplier by 2018.“The global market is going to an oversupply situation,” Luis Sanchez, head of LNG trading at Uniper Global Commodities, said at the conference. “U.S. LNG volumes are coming, new Australian LNG volumes are coming.”The market may become balanced by early to mid-2020s, according to Ajay Shah, a vice president at Royal Dutch Shell Plc, which supplies about 15 percent of global LNG. Centrica Plc also sees gas markets heading to equilibrium in the next decade, with “price formation reverting to fundamentals,” said Nazim Osmancik, the utility’s director of fundamentals.