Despite slowing growth momentum in China, demand for natural gas is expected to remain robust in Asia and will be enough to absorb the additional supply coming in from North America, several industry players told CNBC on the sidelines of the World Gas Conference in Kuala Lumpur.
Barclays Capital noted last month that the spread between North American natural gas prices and Asian LNG (liquefied natural gas) prices hit all-time highs of more than $13 per million British thermal units to Japan. The widening spread makes it profitable to ship North American cargoes to faster-growing emerging economies here.Still, many believe too much material is heading in this direction and that the market risks becoming saturated around the next decade. “I think it's pretty realistic because we will see oversupply from 2017, 2018 with the volumes coming from the U.S.,” Fereidun Fesharaki, Chairman and CEO of consultancy FACTS Global Energy said.
However, Santos CEO David Knox and his industry peers believe demand will remain strong enough to absorb the additional volume. “I don't believe there will be an oversupply. I do believe there will be some volumes coming from North America this way but it will be a relatively small amount.”Page 1 of 2 | Next Page