Oversupply forces gas prices down

By MARK HAIHUIE
THE global market for natural liquefied gas is currently oversupplied forcing prices downwards, according to Oil Search Limited managing director Peter Botten (pictured).
He told The National that the Papua New Guinea LNG exports must be cost-competitive.
He said the global LNG market was currently oversupplied and Oil Search was adjusting to this as well as future demands.
“The LNG market around the world is changing a lot and that is primarily driven by an oversupply of LNG,” he said.
“A lot of developments have taken place over the last five to seven years. Now the LNG market around the world is
oversupplied which has pushed prices down.
“So at the moment, there is a very strong supply coming out of Australia from the projects that are being built and have been completed.
“And there are still a couple to go with Ichthys and Gorgon still to come.
“There is also a significant number of projects that are starting from the United States and the market is very competitive.
“We have to compete in that environment. We have to make Papaua New Guinea a preferred project for customers to buy our LNG.
“And I am pleased to say that the record for Papua New Guinea LNG has been outstanding
that the customers really appreciate.
“The quality of the gas, and its energy content is very well regarded. So Papaua New Guinea is well situated to be part of the future
LNG supply in Asia.
“But as with any project it needs to be done efficiently with minimal wastage and it needs to be cost-competitive.
“It needs to be at the bottom end of the cost curve to survive the lower prices. Papua New Guinea is well regarded as being able to deliver world class LNG projects and to be able to have consistent supplies.
“The exports of future LNG from the country would be of competitive advantage to other suppliers due to increased infrastructure usage by joint venture partners that would result in cost savings and the close proximity to the Asian market.”