The world could soon face a severe LNG supply crunch, as demand rebounds following the economic crisis and if more production plants are not built soon.
New plants under construction, together with lower demand growth, should ensure there will be plenty of fuel for a while - giving some respite from the high prices of the tight market in recent years, delegates told the CWC World LNG Summit in Barcelona.
A lack of investment in any new capital-intensive facilities amid uncertainty over demand and financing problems, could threaten an even tighter market for the super-cooled gas later, according to reports.
“The lack of final investment decisions on new supply projects since most of these new projects were conceptualised is probably setting the industry up for a very tough supply crunch in the middle of the next decade,” Elizabeth Spomer of BG Group is quoted as having said.
Most speakers at the annual conference apparently agreed there would most likely be a lull in demand for the fuel, used to fire an increasing number of the world’s power stations and as a raw material for some industries because of the economic downturn.