Respected industry consultancy Wood Mackenzie says LNG supply constraints in the Asia-Pacific region could stretch beyond 2020, in what would be a major boon for proponents of more than $200 billion of projects being built around Australia.
Wood Mackenzie's head of Asia-Pacific gas and power analysis, Gavin Thompson, said yesterday uncertainty about the state of Japan's nuclear power industry as well as the scope of efforts by Japan and Korea to open up their power markets "could result in all players delaying firm LNG procurement decisions". And the policy uncertainty could cause a supply-side response as new LNG projects are delayed.
Mr Thompson forecast Japan and Korea's requirement for incremental LNG, on top of already contracted volumes, at more than 30 million tonnes a year in 2020.
"But (we) can only identify a small portion of incremental LNG presently being procured," he said. "The appetite for firm LNG procurement is lower compared to the demand outlook. This likely shortfall will need to be met by the spot market."