LNG prices likely to remain ‘elevated’ in 2023

As energy consuming nations in Europe scramble to replace Russian gas previously pumped by pipeline, the US has provided a vital source of LNG shipped by sea. Although spot prices have eased recently, Oslo analyst Rystad Energy, has predicted that they are likely to remain elevated this year compared with historical levels.

LNG exports from the US are increasing rapidly as gas production ramps up. The country is expected to overtake Australia this year as the world’s largest exporter of gas.

However, further delay in the resumption of exports from the fire-enforced closure of Freeport LNG in Louisiana is now likely, according to Rystad. Personnel training and regulatory approvals now indicate a late-February restart, the analyst said, at least a month later than expected.

In a global context, the LNG market balance is still precarious, Rystad said. Russian pipeline volumes are likely to fall further this year and will be balanced only partially by incremental LNG production in the Atlantic. Meanwhile, the impact of China’s reopening adds more uncertainty to the energy equation.