LNG supply continued to post healthy y/y gains, benefiting from the new trains that have come online during Q1 18 to Q3 18. Initial indications are for exports in October to be around 28 Mt, up by a staggering 4.5 Mt y/y due to a combination of new trains and fewer train outages. It was a busy month for news on liquefaction supply as a new train became operational in Australia, and one in the US moved closer to first export. Also, a number of projects either announced an FID (LNG Canada) or made progress towards that milestone.
October has been a busy month for new project developments. The 4.2 Mtpa Ichthys project finally loaded its first cargo, and signs suggest that first gas exports from the 4.5 Mtpa Corpus Christi project are not far away. That bodes well for some incremental supply this winter, and it does come against a period of solid y/y supply increments in the global LNG market.
Indicative data for September from customs departments and ports put global LNG exports up by 2.0 Mt y/y at 25.0 Mt. For October, the rise in exports looks even higher in our balances, up by 4.5 Mt y/y and 3.3 Mt m/m. The gains in October reflect some trains ramping up or achieving first LNG exports, lower y/y outages and some trains operating at a higher utilisation rate. The strength of October has led us to alter our supply forecasts for the coming months, moving winter supply up by some 6 Mt (although 2 Mt of that was just the October numbers). The biggest single changes are on Australian supply, which now looks to be coming in around the 6 Mtpm level for the coming winter. We had pushed the Ichthys start date all the way back to December given the continual delays, so its first exports starting in October also led to a modest revision. In addition, we have seen stronger supply from the Gladstone project than we had expected, all of which combines to create a much stronger all-round export push from Australia.
For November, we expect exports will be up by 3.0 Mt y/y, with Asia Pacific, Europe and the US all likely to be adding volumes. For all of 2018, this means that LNG supply looks like it will grow by around 25.0 Mt y/y, with 8.8 Mt coming from Australia-Asia, 7.8 Mt from Russia’s Yamal, and 10.4 Mt from the US—helping to offset some losses elsewhere. With plenty of new trains set to come online in 2019 (although some of these look to slip to later in H2 19), our forecast for 2019 is for supply to be up by 27.6 Mt y/y.