KUALA LUMPUR (Sept 12): The global supply-demand dynamics for liquefied natural gas (LNG) is expected to remain tight until 2028, amid a delay in LNG projects and declining natural gas production, said oil and gas specialist Lambert Energy Advisory (LEA).

Onursal Soyer, deputy CEO of the London-based firm, cited delays in the US amid construction delays and regulatory changes, as well as investment or construction delays in markets like Papua and Mozambique.

“Despite the strength of LNG demand, LNG capacity additions are limited to just a few countries,” Soyer said in his keynote address at oil and gas upstream player Hibiscus Petroleum Bhd’s (KL:HIBSCS) 2024 Investor Day.

These include the US, which is facing regulatory headwinds, and Qatar. The two countries are operating at 91% and 104% of their nameplate capacity as at 2022, LEA data showed.

The research house sees Asian gas prices to be appropriate at US$8 to US$12 per mmbtu (metric million British thermal unit), as this could “stimulate a healthy demand for gas, and strong economics for project developers”.

As a comparison, the price of US$8 to US$12 per mmbtu is equivalent to oil price at US$48 to US$72 per barrel, Soyer said.

“LEA does not believe that the soft market conditions can exist long in the LNG market, as there are so many large buyers of LNG that would contract (purchase) heavily in softer price environments quickly soaking up spare capacity,” he added.

Demand for natural gas, which makes up 19% of Southeast Asia’s primary energy consumption, has grown by 18% in the 10 years between 2014 and 2023 to 4,000 bcm (billions of cubic metres) per annum, LEA data showed.

LNG demand soared 65% in the same period to 550 bcm per annum, the data showed.

Malaysia is one of the largest LNG producers globally, with key long-term buyers in Asia including Japan, South Korea and China, whose gas consumption is on par with Europe.