The LNG market will face a ten-year supply shortage

According to a report from Oil & Gas Journal on May 7, Rystad Energy stated that the global liquefied natural gas (LNG) market will continue to expand after 2025, but due to possible delays in the development of the Mozambique LNG project, the market will become more tense , There may even be a shortage of supply.

Mozambique was once expected to be among the top global LNG producers around 2025, but Total's recently announced force majeure marked the possibility of indefinite postponement of its onshore LNG complex in Mozambique, plus the affected Rovuma LNG project The annual LNG production capacity of these two projects is 28 million tons.

Between 2026 and 2030, the market may reduce the supply of up to 9 million tons per year, thereby disrupting the global balance of supply and demand.

Similarly, if Rovuma's LNG potential of 15.

In the latest forecast, due to the delay of two projects in Mozambique, a 4 million tons/year oversupply is expected in 2026, which is lower than the previous forecast of 6.

If the expected delay in supply capacity expansion becomes a reality, there will be a shortfall in LNG supply of 5.

The delays in the construction of Mozambique LNG and Rovuma LNG projects have alarmed both buyers and sellers of LNG.

Rystad Energy predicts that, driven by new regasification capacity and more natural gas production capacity, demand will continue to grow.

　　Rystad previously predicted that with the construction of a large number of liquefaction projects, a new wave of supply will enter the market around 2025, which will form a price downward cycle, and Asian spot prices will drop to close to the short-term margin of US LNG 5.

　　Therefore, the Asian spot price in 2025 may remain above US$8/Mbtu.

　　Wang Jiajing excerpted and translated from Oil & Gas Journal

　　The original text is as follows:

　　LNG market faces supply deficit from decade-long impact of Mozambique delays

　　The global liquefied natural gas (LNG) market, which was set to be constantly loose in the second part of this decade, is instead set to get tighter and could even see annual supply deficits because of likely delays in development of Mozambique LNG projects due to the country's worsening security situation, Rystad Energy said.

　　Mozambique was once poised to rise to the upper ranks of global LNG producers by the middle the decade, but Total's recent force majeure declaration signals indefinite delays on its onshore Mozambique LNG complex (OGJ Online, Apr.

　　The market could see up to 9 mtpa of supply removed between 2026 and 2030, disrupting global balances.

　　Similarly, the loose market conditions of 2027-2028 that had been originally forecasted could become more balanced if Rovuma LNG's 15.

　　In an updated forecast, which accounts for delays in the two projects in Mozambique, an oversupply of 4 mtpa is expected in 2026, down from a previous forecast of 6.

　　If the expected delays materialize, 2029 will see an LNG supply deficit of 5.

　　Delays for Mozambique LNG and Rovuma LNG are sobering for LNG buyers and sellers alike.
Mozambique has a large, low-cost resource base—making its LNG projects highly competitive—and the country is conveniently located to serve upcoming demand in Asia.
Rystad estimates DES Asia break-evens of Mozambique's LNG projects to be $5-7/MMbtu.

　　Rystad Energy forecasts a tightening LNG market between now and 2024 as demand continues to grow, driven by new regasification capacity and more gas-power generation, resulting in Asian spot prices reaching $8.
5/MMbtu.

　　With a strong pipeline of liquefaction projects under construction, Rystad previously expected that a new wave of supplies coming into the market around 2025 would create a downward cycle in prices, with the Asian spot price dropping to a level closer to the short-run marginal cost of US LNG of $5.
7/MMbtu in 2027.
However, the potential delay of the Mozambican projects means that there is now an increasing risk of prolonged period of tightness midway through this decade, and that lower prices could be seen 1-2 years later than previously expected.

　　As a result, Asian spot prices could remain above $8/MMbtu in 2025.
The downside risk in prices between 2026 and 2029 is also reduced by a better-balanced market – while prices are expected to decline, there is higher likelihood for them to remain above $6/MMbtu in 2027.