The continent will account for two-thirds of the overall demand in the coming years.
The increasing gas demand from Asia is feared to push the global liquefied natural gas (LNG) market into a deficit in 2022-2025 as the region struggles to meet its booming energy requirements, according to an analysis by Fitch Ratings.
The demand is driven by various markets looking for ways to reduce air pollution and find a replacement for nuclear energy, making natural gas being the fossil fuel of choice. Japan, for one, is the largest LNG importer in the region although China is fast catching up as it becomes a major LNG market.
New projects scheduled for operation from 2016-2019 is not likely to result in any material surplus in the LNG market in the medium term.
It usually takes an LNG project four to five years to become operational following final investment decisions (FID), effectively hitting supply.
“Due to limited new FIDs very few new projects will come on stream in the early 2020s. FIDs in the next one to two years are likely to be limited to projects with lower capital and operating costs given constraints on the funding side,” Marinchenko added.
Gas pricing in major importer markets is also expected to increase. This will benefit LNG projects relying on spot and hub pricing and entities with LNG trading portfolios.
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