LNG gluts and cycles

Structural oversupply is about to hit the market and some projects will have to curtail output to cope. But buyers and developers must take a longer-term view

What a ride. Since liquefied natural gas (LNG) hit giddy highs a few years back, prices have collapsed from the high teens to levels around $5 to $6 per million British thermal units. This has been driven by low oil prices, rather than an oversupply of LNG. But now comes an era of structural LNG oversupply, which will see spot prices remain depressed through to early next decade, even if oil prices rise. Established LNG producers and buyers, as well as new industry entrants, are having to adapt to the largest, steepest, most prolonged drop in prices the LNG industry has ever faced. Plenty of LNG capacity, now under construction, is about to come online without demand to meet it. Global LNG s