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Falling oil and gas prices in the past year have triggered a general sense of pessimism in the LNG industry, particularly given the spectre of future additional supplies from new projects in Australia and the US, and slower demand growth. While this trend may be a relief for buyers, it is forcing sellers and project developers to adjust to changing dynamics, including the prospect that some proposed schemes may be delayed or not go ahead at all.
Delegates at the LNG Global Congress in London this week agreed, however, that it’s not all doom and gloom, as spot demand from emerging buyers, including in the Middle East, becomes something to keep an eye on. “The quick response [from Mideast countries to meet demand] surprised us more than we thought,” Carmen Lopez-Contreras, senior analyst at Repsol said. Volumes stay small compared with the global balance, but the niche markets in the Middle East and are absorbing the amount of incremental LNG going to Europe, which usually acts as a balancing market. Middle East imports – led by Kuwait and Dubai (and Israel to some extent) – grew from 1mn tons in 2011 to 1.7mn tons in 2014.
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