Tight supply on the global market for liquefied natural gas is likely to continue until 2010 or beyond, executives from Royal Dutch Shell PLC (RDSB.LN) and Total SA (TOT) indicated at an Energy Institute seminar recently.

Several high-profile LNG production projects have run into delays this year, and only around a third of more than 50 million metric tonnes a year of new production capacity scheduled to start in 2008 is likely to be ready on time – with some sources of the thought that it’s unlikely the surplus would materialize in 2010.

“In the next two to three winters there is going to be a great shortage of LNG,” said Roland Kupers, Vice-President of Global LNG at Shell Gas and Power.

“Sellers will not be marketing their gas (in Europe) as a matter of course. Europe must remain an attractive market by offering efficiency, transparency and stability to suppliers,” he said.

Thinking along similar lines, Donna De Wick, LNG Trading Executive at Total Exploration and Production, said there was a chance of a supply surplus coming in 2010, but “to get there requires all projects to start on time and perform as imagined.”

Despite being a sellers’ market, both said there is no evidence that suppliers are moving away from the model of long-term contracts linked to the price of oil.

Kupers noted, “It's still an industry driven by long-term relationships and commitments. LNG plants are always some of the biggest investments that companies and nation states ever make.”