ASSESSMENTS

The LNG Trade: A Surge of Supply with Few Buyers

Mar 30, 2009 | 16:56 GMT

NATALIA KOLESNIKOVA/AFP/Getty Images

Summary

The global recession has seen a dramatic reduction in demand for energy as industries and consumers tighten their belts. The timing has been notably bad for producers and exporters of liquefied natural gas (LNG), which tends to be more expensive than piped natural gas and therefore more likely to be cut as an import. LNG players worldwide invested heavily in recent years in new infrastructure, which is just now coming on line. The result is expected to be a surge of LNG on international markets in 2009, with few industries or consumers willing or able to buy.

Bad timing in infrastructure investment could create more global supply than demand for liquefied natural gas and push spot prices downward. (With STRATFOR map)...

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