LNG: Churning it out

Producers face a further period of low prices as more production comes online

The liquefied natural gas market of 2018 will bear many similarities to the present one. The market in 2017 remained in a period of LNG oversupply that began in 2016. Although the year opened with strong demand, due to low winter temperatures and nuclear outages, forc­ing Asian spot prices to near $10 per million British thermal units, we saw prices return to pre-winter levels in all major regions in March. As warmer weather returned and the seasonal demand fell, it became evident that the favour­able market for LNG suppliers of the early 2000s had led supply to catch up and overtake demand. Even though the winter temperatures have brought back high demand, the supply glut is expected to ret