The shake-out from Australia’s massive malinvestment in LNG continues, with The AFR reporting research from Barclays arguing that China is facing potentially “unprecedented surpluses” of natural gas, which is likely to lead to reductions in their spot purchases, damaging exporting nations like Australia:
The country’s growth in demand for gas fell to its slowest for 12 years in 2014, and with the slowing of the economy, demand growth may slide…
That is likely to lead to a supply glut for the first time in China, with a potential 23 billion cubic metre surplus by 2017…
“With [LNG] imports set to rise nearly four-fold in a decade… Chinese state-owned enterprises may step away from spot LNG (and also re-sell cargoes) and become selective on long-term contracts.”
Of course, this analysis comes on top of Goldman Sachs’ forecast today that Australian LNG earnings could be $500 billion lower than expected over the next decade.
Sucks to be an Australian LNG producer right now.
