HomeNewsAsian buyers to mop up LNG supply surge in next 5 years

Asian buyers to mop up LNG supply surge in next 5 years

9/6/2023

(Reuters) - Asian buyers will quickly absorb a surge in supplies of LNG coming to market over the next five years, an executive with Vitol, the world's largest independent oil trader, said on Wednesday.

Supplies in the West are set to improve over the next few years, with U.S. developers of LNG on track to approve a record volume of new projects in the first half of this year.

"That additional volume is going to be absorbed very quickly," said Pablo Galante Escobar, Vitol's head of LNG and EMEA gas and power.

"I'm not too concerned about a significant amount of LNG which is going to come to the market in the next five years," he told the Gastech industry conference.

Despite market concerns about the volume of final investment decisions on LNG projects, with more supply coming online going into 2027, Galante said he was not concerned about the issue.

"Again, with the flexibility (of trading cargoes between the East and to the West) and price adjustments, we are going to get that demand coming from different markets in the long term," he added.

Last year, Vitol sent about 9 million metric tons of LNG to Europe, three times its 2021 figure of about 3 million tons, he added.

But Galante responded cautiously when asked about demand expectations for Europe this year.

"The expectations of 2023 will very much depend on the winter, how cold the winter is," he told Reuters on the sidelines of the conference. "Europe doesn't need any LNG or any gas at this particular time."

Storage facilities in Europe, now about 93% full are very likely to reach 100% before winter, he added.

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