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The LNG Market Weakens: But for Whom?

Keith Kohl

Written By Keith Kohl

Posted November 17, 2015

Liquefied natural gas is quickly gaining popularity.

Between 2014 and 2018, Australia alone is set to quadruple its LNG export capacity. On the flipside, however, the US is expected to export its first shipment in early 2016, and by 2020, and is slated to become the third largest LNG export country, with Qatar and Australia leading.

LNG graph

You see, prices have been falling pretty rapidly due to the extreme volatility we’ve seen in the crude markets over the last year and a half.

Yet, that’s not the only reason…

Interestingly, demand for LNG is not as high as people thought it would be.

Let’s take Japan, for example. The country was a major buyer of LNG, yet now the Japanese are actually importing less LNG thanks to a decision to restart its nuclear power plants.

Moreover, China has even re-sold some of the shipments it’s received recently.

Now, there’s still increasing demand in smaller countries like Pakistan, Egypt, and Bangladesh, but we’d be foolish to think that that growth will offset falling demands in northern Asia.

The International Energy Agency recently reported that there will be far too much LNG supply going forward, and that glut will result in delaying, or even canceling, new LNG projects.

There is a good takeaway here, however…

Natural gas would become even cheaper, which will boost consumption in areas like the electric power sector, further pushing coal demand lower — and ultimately leading to a full transition to natural gas.

To continue reading…

Click here to read the OilPrice article.

Until next time,

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Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

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