Supplies of liquefied natural gas from proposed plants in Australia, Papua New Guinea and Indonesia may exceed demand in the Asian region by at least 57 percent, data from Wood Mackenzie Consultants Ltd. show.
The combined capacity of some LNG projects in Papua New Guinea, Australia and Indonesia is more than 44 million metric tons while the Asia-Pacific market, led by China, requires 28 million tons a year in 2015, Noel Tomnay, Wood Mackenzie’s head of global gas and power research, said in a report yesterday. The projects are seeking approvals in 18 months, he said.
“The Pacific offers a last bright spot for sellers as Wood Mackenzie forecasts China demand growth to retain a tight market in the 2013 to 2015 period which is currently propping up long- term contracts,” Tomnay said in the e-mailed report. “But the balance is a delicate one which may shift in just the next 18 months.”
Exxon Mobil Corp., Chevron Corp., Royal Dutch Shell Plc, Total SA and Mitsubishi Corp. are among those developing LNG ventures in Australia, Indonesia and Papua New Guinea. China is building more than 10 LNG terminals on its eastern coast to meet a target of doubling the use of the cleaner-burning fuel.
LNG sellers’ market influence will wane in the next few years, Wood Mackenzie said. Natural gas prices are set to decline because of recession and lower demand that contributes to a supply glut.