After a tumultuous 2020, the price recovery has accelerated, pointing towards stronger for longer LNG prices. This is a consequence of both supply and demand factors: LNG supply growth will be slower and Asian LNG demand has increased. This reduces the availability of LNG to Europe and means we are forecasting a structurally tighter market through to 2025 than previously anticipated. The impact of the coronavirus pandemic was well documented in our previous (H1/H2 2020) outlooks. However, additional project delays and recent FIDs mean that more than 57 mmtpa of under construction LNG capacity expected online between 2026-28, making market space for new LNG supply extremely limited. But with less LNG supply capacity expected online before 2026, an opportunity has presented itself for developers of pre-FID US LNG. However, it remains difficult to pick winners from the “shovel-ready” greenfield projects and the brownfield expansions.[by Wood Mackenzie]
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