Muted Price Trends For Crude, LNG May Not Last; Spike To Be Smaller Than CY22 Levels: ICICI Securities

ICICI Securities Report

The data from liquefied natural gas markets suggests a huge influx of export capacity over the next five years, with the U.S. leading the way in both confirmed projects (final investment decision cleared) as well as anticipated projects (pre-FID) for liquefaction capacity over CY23-28E.

As per the recent update on the LNG market by the International Gas Union, global liquefaction capacity of 478.4 million tonne is set to expand meaningfully over the next five-six years, with a cumulative 997 mt of projects in planning plus development.

CY22 saw final approvals of 25 mt of liquefaction capacity versus 50 mt in CY21 and at this rate only ~125-150 mt of new approvals are likely in the next five years.

In crude markets as well, supply tightness remains significant, with gradual Chinese demand momentum to drive prices higher.

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