EMEA News
Yamal LNG: LNG Prices to Rise as Market Goes into Deficit by 2018
Russian Liquefied Natural Gas (LNG) joint venture Yamal LNG has said it expects the global LNG market to move into deficit by 2018, pushing up prices, Maritime Executive reports.
"It is expected that European LNG imports will increase to 107 million tonnes in 2025 from 38 million tonnes in 2013," said Yamal LNG, adding that it is predicting a global LNG shortage of 50 million tonnes by 2020.
The comments were delivered by Yamal LNG in a prospectus for its upcoming $4.6 billion bond issue.
Analysts for Alliance Bernstein have also predicted rising LNG demand, saying this would put upward pressure on LNG prices.
Russian President Vladimir Putin has reportedly urged Russian companies to double their current 4.5 percent share of global LNG output.
But Yamal LNG said that to avoid a deficit, capacity for an additional 90 million tonnes per year would need to be built by 2020.
It plans to produce 16.5 million tonnes per year when operational from 2017.
As the shipping industry continues to consider LNG as a marine fuel for the future, the prospect of supply constraint and higher prices may weigh further on decisions for LNG newbuilds and fleet conversions.
With bunker prices falling dramatically in recent months as oil production has outpaced demand growth, reports suggest that the shipping industry is putting off investments in LNG.
