A wave of new LNG supply will change who wins in gas

This year's headlines on liquefied natural gas (LNG) have focused on scarcity, such as the Strait of Hormuz, force majeure events, and rerouted cargoes affecting buyers in South Asia. However, this perspective overlooks a crucial shift in the market. New liquefaction capacity in the US Gulf Coast and Qatar's North Field expansion will come online by the second half of the decade, leading to an abundance of supply.

Rather than questioning whether there will be gas, the real question is how each producer, buyer, trader, and terminal owner can compete when there is enough gas. The industry has achieved remarkable connectivity, allowing a cargo loaded at Ras Laffan or in Louisiana to reach any buyer worldwide. However, this interdependence raises the stakes, as an abundant supply demands more sophisticated players, competition between alternative chains, and a more complex market system.

While many players are now diversifying their roles, the market still relies on accurate allocation, not just assurance. Speed and rigour are crucial, as slow execution can hand opportunities to competitors. The most successful organizations will be those that can make quick decisions while understanding their commitments physically, commercially, and financially.

The current models may still work, but they may not be the most competitive. The key is for organizations to understand their dependencies and have the capability to make their chosen model work. For the Gulf countries, whose reliability has been their most valuable export, maintaining trust across the entire value chain will be crucial to their success in the evolving LNG market. Boards should ask themselves what changes they are making now to avoid potential disruptions.