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  • Roger S. Conrad

The State of LNG

By Elliott H. Gue on Jan. 20, 2020

Editors’ note: At a time when the US shale oil and gas industry is getting used to living on less, one corner of the energy sector is still red hot: Liquefied natural gas exports.

Even as we’re seeing production growth tapering off in some areas of North America, LNG volumes are on track to keep rising. That’s creating new business for midstream companies and tankers. Ultimately, it will also take some pressure off natural gas producers, though we continue to be unenthusiastic about this group. Here’s our take on the state of LNG.—EG, RC

Q: What are the main factors driving LNG volume growth and why do you believe they have staying power?

Probably the most important driver is that natural gas is cheap and in increasing surplus in a growing number of countries. Traditionally, the Middle East has been the primary producer and exporter of LNG, with Qatar the leader.

Official data are currently not available for 2019. But according to Bloomberg vessel tracking estimates, Qatar was number one in the world again last year, exporting 79 million metric tons of LNG. And the country reportedly has plans to increase its production capability to well over 100 million MT over the next few years.

To date, North America hasn’t been a major factor in global LNG traffic. Rather, the surging domestic natural gas supplies unlocked by the advent of hydraulic fracturing has been absorbed by the US market, which has rapidly shifted from a deficit situation in gas to a massive surplus.

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    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor