The global market for liquefied natural gas has reached a state of “fragile equilibrium” after two years of severe turbulence, but it still faces a lack of spare supply in the short term, according to a report.
Despite lower prices, the growing global LNG market is tight due to supply constraints and increasing demand from emerging economies, the International Gas Union (IGU) said in a report on Wednesday.
Global LNG trade grew by 2.1 per cent last year, surpassing 401 million tonnes, with the market now connecting 20 exporting markets with 51 importing markets, the IGU said.
“As the world moves towards a low emissions future, nations are seeking ways to achieve their climate commitments while keeping energy affordable, available and secure,” said Li Yalan, IGU president.
“LNG is a tool that will be critical to providing greater resiliency for rapidly changing energy systems.”
Demand for the supercooled fuel reached a record high in 2022 as Europe scrambled to replace Russian pipeline gas with LNG, tightening the market and boosting prices.
However, prices have fallen since last year due to an increase in new production complexes, especially in the US; milder winters in Europe and Asia, which have reduced the demand for natural gas for heating; and high storage levels in these regions.
The US led the world in LNG exports last year, supplying 84.53 million tonnes to global markets compared to 75.63 million tonnes in 2022, the report said.
The other top exporters were Australia with 79.56 million tonnes, Qatar with 78.22 million tonnes, and Russia with 31.36 million tonnes.
China reclaimed its position from Japan as the largest LNG importer last year, purchasing 71.19 million tonnes. Japan and Korea were in second and third places despite yearly decreases, while India was fourth, driven by increased demand due to lower spot prices.
“Global LNG market continues to rapidly evolve as it responds to growing gas demand in emerging markets, increasing number and diversification of market participants,” the report said.
The LNG industry is “no longer a game only for big markets or big companies, with portfolio players playing an increasingly more important role”.
Last year, about 180 companies were involved in LNG deliveries under term contracts, while about 35 per cent of the transactions were spot-priced, IGU said.
In the Middle East, large energy companies such as Saudi Aramco, the world’s largest crude exporter, and the UAE's Adnoc have been increasing their exposure to LNG, which is seen as a low-carbon alternative to crude oil and coal.
In May, Adnoc acquired an 11.7 per cent stake in phase one of NextDecade’s Rio Grande liquefied natural gas export project in Texas, marking its first investment in the US.
The Abu Dhabi-based company also entered a 20-year LNG offtake agreement with NextDecade for 1.9 million tonnes a year on a free on-board basis at a price indexed to Henry Hub.
Earlier this month, Aramco signed an initial agreement to offtake 1.2 million tonnes a year of LNG from the Rio Grande project for 20 years.
Uncertainties remain
The IGU said that the LNG market faces several major uncertainties, including the US administration’s pause on pending and future exports, sanctions on Russian exports, and continuing security risks in the Middle East.
More than 120 million tonnes per annum of operational liquefaction capacity is more than 20 years old, with some complexes being mothballed due to insufficient upstream gas production, highlighting significant supply-side risks, the report said.
In 2024, limited LNG supply growth of 3.5 per cent, down from 8 per cent between 2016 and 2020, will probably curb demand in Europe and mature Asian markets, the International Energy Agency said in a report this year.
However, delays in new plants and feed gas issues could push supply increases to 2025, potentially causing significant price fluctuations, the agency said.
The low down
Producers: Uniglobe Entertainment & Vision Films
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Cast: Rajkummar Rao, Nargis Fakhri, Bo Derek, Candy Clark
Rating: 2/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Six things you need to know about UAE Women’s Special Olympics football team
Several girls started playing football at age four
They describe sport as their passion
The girls don’t dwell on their condition
They just say they may need to work a little harder than others
When not in training, they play football with their brothers and sisters
The girls want to inspire others to join the UAE Special Olympics teams
8 traditional Jamaican dishes to try at Kingston 21
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- Rock Steady Jerk Chicken: chicken marinated for 24 hours and slow-cooked on the grill
- Mento Oxtail: flavoured oxtail stewed for five hours with herbs
- Ackee and salt fish: the national dish of Jamaica makes for a hearty breakfast
- Jamaican porridge: another breakfast favourite, can be made with peanut, cornmeal, banana and plantain
- Jamaican beef patty: a pastry with ground beef filling
- Hellshire Pon di Beach: Fresh fish with pickles
- Out of Many: traditional sweet potato pudding
Challenge Cup result:
1. UAE 3 faults
2. Ireland 9 faults
3. Brazil 11 faults
4. Spain 15 faults
5. Great Britain 17 faults
6. New Zealand 20 faults
7. Italy 26 faults
UAE squad
Esha Oza (captain), Al Maseera Jahangir, Emily Thomas, Heena Hotchandani, Indhuja Nandakumar, Katie Thompson, Lavanya Keny, Mehak Thakur, Michelle Botha, Rinitha Rajith, Samaira Dharnidharka, Siya Gokhale, Sashikala Silva, Suraksha Kotte, Theertha Satish (wicketkeeper) Udeni Kuruppuarachchige, Vaishnave Mahesh.
UAE tour of Zimbabwe
All matches in Bulawayo
Friday, Sept 26 – First ODI
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I
Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai
Dubai World Cup nominations
UAE: Thunder Snow/Saeed bin Suroor (trainer), North America/Satish Seemar, Drafted/Doug Watson, New Trails/Ahmad bin Harmash, Capezzano, Gronkowski, Axelrod, all trained by Salem bin Ghadayer
USA: Seeking The Soul/Dallas Stewart, Imperial Hunt/Luis Carvajal Jr, Audible/Todd Pletcher, Roy H/Peter Miller, Yoshida/William Mott, Promises Fulfilled/Dale Romans, Gunnevera/Antonio Sano, XY Jet/Jorge Navarro, Pavel/Doug O’Neill, Switzerland/Steve Asmussen.
Japan: Matera Sky/Hideyuki Mori, KT Brace/Haruki Sugiyama. Bahrain: Nine Below Zero/Fawzi Nass. Ireland: Tato Key/David Marnane. Hong Kong: Fight Hero/Me Tsui. South Korea: Dolkong/Simon Foster.
Avatar: Fire and Ash
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Overall standings
1. Christopher Froome (GBR/Sky) 68hr 18min 36sec,
2. Fabio Aru (ITA/AST) at 0:18.
3. Romain Bardet (FRA/ALM) 0:23.
4. Rigoberto Uran (COL/CAN) 0:29.
5. Mikel Landa (ESP/SKY) 1:17.
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Al Ain 3 (Ahmed 02’, El Shahat 17’, Al Ahbabi 60’)
THREE POSSIBLE REPLACEMENTS
Khalfan Mubarak
The Al Jazira playmaker has for some time been tipped for stardom within UAE football, with Quique Sanchez Flores, his former manager at Al Ahli, once labelling him a “genius”. He was only 17. Now 23, Mubarak has developed into a crafty supplier of chances, evidenced by his seven assists in six league matches this season. Still to display his class at international level, though.
Rayan Yaslam
The Al Ain attacking midfielder has become a regular starter for his club in the past 15 months. Yaslam, 23, is a tidy and intelligent player, technically proficient with an eye for opening up defences. Developed while alongside Abdulrahman in the Al Ain first-team and has progressed well since manager Zoran Mamic’s arrival. However, made his UAE debut only last December.
Ismail Matar
The Al Wahda forward is revered by teammates and a key contributor to the squad. At 35, his best days are behind him, but Matar is incredibly experienced and an example to his colleagues. His ability to cope with tournament football is a concern, though, despite Matar beginning the season well. Not a like-for-like replacement, although the system could be adjusted to suit.
