LNG demand to rise 25-50% by 2030, fastest growing hydrocarbon: Morgan Stanley

LNG demand to rise 25-50% by 2030, fastest growing hydrocarbon: Morgan Stanley
Liquefied natural gas (LNG) tanks stand at a terminal in Takaishi City, Osaka, Japan. Getty Images
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Updated 25 October 2021

LNG demand to rise 25-50% by 2030, fastest growing hydrocarbon: Morgan Stanley

LNG demand to rise 25-50% by 2030, fastest growing hydrocarbon: Morgan Stanley
  • While higher gas prices are likely to underpin further investment in LNG, supply will be slower to respond than in previous cycles

Demand for liquefied natural gas (LNG) is expected to rise by 25 to 50 percent by 2030, making it the fastest growing hydrocarbon over the next decade, analysts from Morgan Stanley Research said in a note on Monday.


Morgan Stanley has raised its long-term LNG price outlook to $10 per million British thermal units (mmBtu), expecting spot prices of the super-chilled fuel to average 40% higher over the next decade, versus the past five years.


Asian spot LNG prices hit a record above $56 mmBtu earlier this month as surging demand ahead of the northern hemisphere winter spurred by an economic rebound from the pandemic outstripped supply.


Morgan Stanley said at least 73 million tonnes per annum (mtpa) of new projects are needed to meet LNG demand by 2030. This will require an additional $65 billion of new projects, on top of the $200 billion of projects already under construction which were sanctioned since 2019.


"Contrary to investor expectations, the world is going to need more LNG in the initial phase of the energy transition," the analysts said.


"Competing technologies for natural gas are not being developed fast enough, and there are significant benefits in reducing coal consumption while greener fuels are commercialised."


Projects with lower emission intensity will be more sought after and are more likely to progress, they said.


While higher gas prices are likely to underpin further investment in LNG, supply will be slower to respond than in previous cycles, the analysts said.


"This will be driven by uncertainty over medium-term demand along with more capital discipline from the industry, including diversification into greener energies," they said.


"We think investor sentiment towards LNG-focused companies is likely to increase given better prices and returns expectations."


LNG demand will outpace growth in other hydrocarbons over the next 10 to 15 years, they said, adding that oil demand is expected to grow in line with recent averages while coal demand is expected to be flat.


Asia, where coal makes up a high proportion of the energy mix, will be the key driver for LNG demand growth led by China and India as well as Taiwan, Thailand, Bangladesh, Indonesia and Malaysia, they added.


How Omicron is affecting Middle East markets

Updated 4 sec ago

How Omicron is affecting Middle East markets

How Omicron is affecting Middle East markets
  • Oil prices stumbled in their biggest decline since April 2020

DUBAI: The new COVID-19 variant, Omicron, has prompted global economic concerns, as fears of its spread begin to affect stock markets and oil prices. 

Saudi Arabia’s main market, the Tadawul All Share Index, opened 5.3 percent lower on Sunday, trading near 10,700 points. 

The Dubai Financial Market was down 8.49 percent.

Oil prices stumbled in their biggest decline since April 2020, with Brent prices dropping 11.55 percent to $72.72 per barrel when markets closed on Friday, while WTI slid 13.06 percent down to $68.15 per barrel.

The variant was first discovered in South Africa and had also since been detected in Belgium, Botswana, Israel, the UK, Australia and Hong Kong.

Within the Middle East Israel is the only country to have reported a case of the new variant so far, but some governments in the region have issued travel curbs to prevent the virus from spreading. 

On Sunday, Saudi Arabia expanded the list of African countries where it barred travel because of Omicron, adding Malawi, Zambia, Madagascar, Angola, Seychelles, Mauritius and the Comoros Islands.

The Kingdom earlier halted flights to and from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Eswatini.

Other Middle East countries, including the UAE, Bahrain, Morocco, and Jordan have issued similar measures. 


Saudi stock market drops 5.3 as Omicron sparks global concern

Saudi stock market drops 5.3 as Omicron sparks global concern
Updated 26 min 42 sec ago

Saudi stock market drops 5.3 as Omicron sparks global concern

Saudi stock market drops 5.3 as Omicron sparks global concern

Saudi Arabia’s main market, the Tadawul All Share Index, opened 5.3 percent lower on Sunday, trading near 10,700 points.


Aramco prepares work on its largest non-associated gas field

Aramco prepares work on its largest non-associated gas field
Updated 28 November 2021

Aramco prepares work on its largest non-associated gas field

Aramco prepares work on its largest non-associated gas field
  • The Saudi-listed firm claims it to be the “largest non-associated gas field” in the Kingdom

DUBAI: Saudi Arabia’s oil giant Aramco is marking the start of its development of the Jafurah unconventional gas field on Nov. 29. 

The Saudi-listed firm claims it to be the “largest non-associated gas field” in the Kingdom. 

The move is part of the Kingdom’s push to commercialize its unconventional resources and expand Aramco’s integrated gas portfolio. 


London-based Knight Frank expands Dubai team as real estate continues boom

London-based Knight Frank expands Dubai team as real estate continues boom
Updated 28 November 2021

London-based Knight Frank expands Dubai team as real estate continues boom

London-based Knight Frank expands Dubai team as real estate continues boom
  • The firm hired Andrew Cummings, who has been involved in major sales transactions in Dubai, including two 100-million-dirham properties

DUBAI: London-based real estate firm Knight Frank has hired a veteran broker in Dubai as it expands its operations in the emirate, particularly targeting the luxury market. 

The firm hired Andrew Cummings, who has been involved in major sales transactions in Dubai, including two 100-million-dirham properties, which at the time were the second and third highest sales in the emirate’s residential market history. 

It comes as Dubai experiences a surge in sales transactions, particularly in the luxury residential market, in recent months.

“With Dubai’s property market roaring back to life and seeing record growth in 2021, now is absolutely the time to capitalize on this momentum,” Cummings said in a statement. 


Saudi firm bags $14m contract to supply steel pipes to Uruguay 

Saudi firm bags $14m contract to supply steel pipes to Uruguay 
Updated 28 November 2021

Saudi firm bags $14m contract to supply steel pipes to Uruguay 

Saudi firm bags $14m contract to supply steel pipes to Uruguay 
  • The supply contract will run for three months, the company said in a bourse filing

DUBAI: The Saudi Steel Pipe Company has won orders worth SR52.4 million ($13.96 million) to supply steel pipes for oil and gas to Uruguay-based Tenaris Global Services.

The supply contract will run for three months, the company said in a bourse filing. 

The impact of the deal will reflect in the company’s first-quarter earnings next year.