(World Oil)– A looming surge in liquefied natural gas supply through the end of the decade is poised to create demand that won’t go away, said an ADNOC Gas executive.
Prices of the super-chilled fuel are widely expected to drop as a number of LNG projects go online in the coming years, including Abu Dhabi National Oil Co.’s plant at Ruwais that will more than double the company’s export capacity.
“Historically, lower prices helps create new demand,” ADNOC Gas Chief Executive Officer Fatema Al Nuaimi said in an interview. “When the price sensitive markets tap into the LNG market, they don’t go back because they invest in receiving terminals and the system. You create a demand.”
LNG suppliers are investing billions in new export terminals in a bet that consumption will rapidly grow across the emerging world, a view shared by the International Energy Agency. The Paris-based organization foresees record demand for gas next year, especially in price-sensitive Asian markets, as well as in Africa and the Middle East.
However, it isn’t guaranteed that price-conscious emerging countries will underpin future consumption. Pakistan, once seen as a fast-growing buyer, is shifting its energy strategy away from LNG due in part to years of the fuel not being competitive and a buildout of solar.
