By ERIC YEP
Global liquefied natural gas (LNG) trade might contract for the second year in a row in 2013 mainly due to insufficient supply levels, analysts said.
LNG supply is lagging behind demand due to the lack of new projects for exporting gas, and falling supply from key exporters such as Indonesia, the Middle East and Africa.
"Last year was the first year in which global LNG consumption declined [in] over two decades" and this year "it looks as if history will repeat itself," analysts at Bernstein Research said in a note Thursday.
They said global LNG volumes declined by 3.8% for the first six months of this year, and growth in the second half of the year is expected to be moderate.
Last week, Japan's Institute for Energy Economics also estimated global LNG demand in 2013 to drop to 233 million tons, from 236.31 million tons in 2012.
It attributed the decline to falling European demand, in addition to tighter gas supply, and said LNG demand will recover in 2014 to around 250 million tons on Asian consumption.
Bernstein said LNG exports from Africa in the first five months of 2013 fell 14.0% from last year to 14.3 million tons, while the Middle East, which sent 84% of its LNG exports to Asia, saw exports drop by 1.7% to 40.6 million tons in the same period.
The only region with significant supply growth was Australia, where new projects continue to expand global LNG supply.
On the demand side, Asian countries continue to be the largest market for imported gas, driving absolute global LNG demand growth, and offsetting the decline in European markets.
Dow Jones Newswires