MOSCOW (MRC) -- Chevron Corp said it expected supply shortage in the global liquefied natural gas (LNG) market by around 2025, echoing comments made last month by top LNG trader Royal Dutch Shell, reported Reuters.
Demand for natural gas, which burns cleaner than coal and oil, has surged as countries such as China look to curb environmental pollution.
Chevron, owner of the giant Gorgon and Wheatstone LNG projects in Australia, said it expects global demand to be nearly 600 MMtpy by 2035, while supply could be just about half of that.
"China’s demand is increasing significantly - they’ve had a very active program to move off of coal in heating industrial applications, and that’s pulled on LNG," Pierre Breber, EVP -downstream at Chevron, said during the company’s analyst day, when asked about spot LNG prices.
China imported record levels of LNG in January, as the world’s second-largest economy shored up supplies ahead of the Lunar New Year celebrations
Shell in February estimated that more than USD200 billion of investments in LNG is needed to meet the boom in demand by 2030.
The global LNG market is set to continue its rapid expansion into 2020 as facilities approved for construction in the first half of the decade come on line.
However, a decline in spending in the sector since 2014 will create a supply gap from the mid-2020s unless new investments emerge, Shell said in its 2018 LNG Outlook.
As MRC wrote before, in July 2016, a USD36.8bn expansion of the Tengiz oilfield in Kazakhstan, the largest investment by private sector oil companies this decade, was given the go-ahead by Chevron of the US, bucking the trend of delays and cancellations resulting from the slump in crude prices since mid-2014. The investment will add 260,000 barrels a day of crude to production at Tengiz. That would increase the output at TCO, the Chevron-led consortium that runs the field, by 44 per cent from its average of 595,000 b/d last year. The expansion is scheduled to deliver oil from 2022.
Chevron is the second-largest US oil group by production and market capitalisation, after ExxonMobil. Chevron Phillips Chemical (part of Chevron), headquartered in The Woodlands, Texas (north of Houston), US,l is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, piping, and proprietary plastics. Chevron and Phillips 66 each own 50% of Chevron Phillips Chemical.
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