OUR global LNG market it is estimated that it will take many years to adjust to the shocks of the past year. As fuel prices remain high, the hunt for long-term contracts by companies and governments is expected to continue. These are the results of the Energy Week conference in India.

Since Russia has cut supplies to Europe, Europe has imported an unprecedented amount of LNG and prices remain high. In fact, according to Thomas Morris, vice president and head of LNG at France’s TotalEnergies, “although Europe now feels much more confident that it will survive the winter of 2023 without an energy shortage, the situation will be difficult and there will be strong demand later both from Europe as well as from China. He predicts a further decline in supplies from Russia: “LNG stocks will be insufficient this year, which probably means that prices will remain slightly higher in the coming years, despite the fact that they have been de-escalated recently.” According to his estimates, only from 2026-2027 the situation will improve, since then a new wave of energy from the US and Qatar will reach Europe. In the meantime, demand from China, the world’s second-largest LNG importer, is expected to recover after the lifting of all restrictive measures against the pandemic. According to Akshay Kumar Singh, chief executive of Indian energy company Petronet LNG, “The industry has realized that it needs long-term contracts, and actually a good mix of short-term and long-term contracts.” For example, Petronet, which is India’s largest gas importer, is looking to renew its long-term deal with Qatar to secure additional deliveries of at least one million tons of gas per year in the contract. The company intends to trade this volume of gas with the Australian company Gorgon LNG, with which it already has a contract. At the same time, the Indian company GAIL is preparing to sign a gas supply agreement with Novatek, Russia’s largest LNG company.

It is assumed that in the period from 2026 to 2027 the situation in the liquefied natural gas market will improve.

At the same time, Bangladesh, which is trying to close 10 to 12 LNG cargoes by June, is also trying to secure some long-term LNG contracts with Brunei to secure needed supplies for years, according to the country’s energy adviser to the prime minister. minister. Meanwhile, Chinese state-owned companies have struck deals with Oman and Qatar in recent months. Sinopec, for example, completed and signed a 27-year agreement with QatarEnergy, which includes the largest LNG sale and the largest associated agreement to date. However, the interest in long-term contracts comes not only from potential buyers, but also from sellers. According to Andrew Barry, head of LNG market development at ExxonMobil, long-term contracts have made it easier for energy companies to stay afloat during periods of weak demand and low investor confidence in the industry caused by short-term market volatility.