‘LNG glut’ a sham: Shell CEO

Royal Dutch Shell CEO Ben van Beurden.

Royal Dutch Shell CEO Ben van Beurden.

Royal Dutch Shell CEO Ben van Beurden says there is little evidence of LNG oversupply and has promised to continue developing new projects.

According to the Australian, Mr van Buerden said the oversupply tipped by many analysts as new projects in Australia and the US come online hasn’t been spotted yet.

“The LNG glut, it’s conspicuously absent, isn’t it? Much to the surprise of those who thought it was inevitable,” said Mr van Buerden.

“Supply additions are so much more visible than incipient demand, which is invisible.

“We have a pretty good insight on this but it is somehow less transparent for market commentators to see coming.”

In recent years, industry commentators have predicted an oversupply of LNG that could continue into the early 2020s, with some predicting it would last until 2027 if new projects were built.

However, the Shell boss pointed to the Asian market, particularly China – which is increasing imports of natural gas to improve its air quality – leading to three year high spot prices of more than US$10 million (AU$12.62 million) per British thermal units.

“There is not going to be a glut,” said Mr van Beurden.

“China is very strong when it comes to gas demand growth, even stronger when it comes to gas import growth and even stronger again when it comes to LNG demand.

“I remain very optimistic about the fundamentals of LNG and therefore we will continue to see this as a very good opportunity to focus our efforts on and also to continue to invest in new supply projects.”

Enter your details to subscribe to the free fortnightly Gas Today e-newsletter

Thank you for signing up for the Gas Today Online Update.