LNG Demand to Rise 25-50% By 2030 - Morgan Stanley

October 25, 2021

World Energy Reports LLC.

Demand for liquefied natural gas (LNG) is expected to rise by 25 to 50% by 2030, making it the fastest growing hydrocarbon over the next decade, analysts from Morgan Stanley Research said in a note on Monday.

Morgan Stanley has raised its long-term LNG price outlook to $10 per million British thermal units (mmBtu), expecting spot prices of the super-chilled fuel to average 40% higher over the next decade, versus the past five years.

Asian spot LNG prices hit a record above $56 mmBtu earlier this month as surging demand ahead of the northern hemisphere winter spurred by an economic rebound from the pandemic outstripped supply.

Morgan Stanley said at least 73 million tonnes per annum (mtpa) of new projects are needed to meet LNG demand by 2030. This will require an additional $65 billion of new projects, on top of the $200 billion of projects already under construction which were sanctioned since 2019.

"Contrary to investor expectations, the world is going to need more LNG in the initial phase of the energy transition," the analysts said.

"Competing technologies for natural gas are not being developed fast enough, and there are significant benefits in reducing coal consumption while greener fuels are commercialized."

Projects with lower emission intensity will be more sought after and are more likely to progress, they said.

While higher gas prices are likely to underpin further investment in LNG, supply will be slower to respond than in previous cycles, the analysts said.

"This will be driven by uncertainty over medium-term demand along with more capital discipline from the industry, including diversification into greener energies," they said.

"We think investor sentiment towards LNG-focused companies is likely to increase given better prices and returns expectations."

LNG demand will outpace growth in other hydrocarbons over the next 10 to 15 years, they said, adding that oil demand is expected to grow in line with recent averages while coal demand is expected to be flat.

Asia, where coal makes up a high proportion of the energy mix, will be the key driver for LNG demand growth led by China and India as well as Taiwan, Thailand, Bangladesh, Indonesia and Malaysia, they added.

(Reporting by Jessica Jaganathan; Editing by Emelia Sithole-Matarise)

Floating Production Week delivers unrivaled overview, insight and analysis to the Offshore Floating Production Systems and Technology market

Floating Production Systems Report And Online Database

  • Annual five year outlook and forecast – At the start of each year we prepare a detailed assessment of future deepwater development and forecast the pace of orders for floating production systems over the next five years. Our 2021 annual report looks at market conditions likely to prevail through 2025 and provides our assessment of which of the 200+ floater projects in the planning queue will reach the final investment decision by end-2025
  • Monthly reports - Our monthly reports provide a detailed snapshot of the business sector as of the middle of each month. More than 100 pages of data and industry analysis each month. Excel spreadsheets with each report enable subscribers to tailor the data presentation to their needs. In our May report we revisit the annual forecast and make revisions as needed.
  • Online database - The online database is updated every day – with information direct from primary sources. In the database are details for 200+planned projects, 390+ installations in service, 40+ floaters on order and 40+ floaters available. The database is fully searchable. Customized charts and spreadsheets can be directly produced from the database. Data are easily exported to excel spreadsheet.
  • Customer support - We are available to assist with technical questions about information in the database and reports -- and assist with any questions about using the database search tools.

Here's what you get!

Request a Demo