LNG supply continued to post healthy y/y gains in the last two months, benefitting from the new trains that have come online over Q1 18–Q3 18. Initial indications are that LNG exports will be up by 2.6 Mt y/y in November, still strong and indicative of the supply increments we expect to see over the coming winter. Two of the five new trains expected to begin exporting LNG this winter have started production, while two of the others look at risk of delays.
Final data for October from customs and ports put global LNG exports up by 2.8 Mt y/y at 26.5 Mt. For November, the rise in exports looks like coming in at 2.6 Mt y/y. The large y/y gains continue to reflect the incremental supply capacity that has been added, lower y/y outages and some trains operating at a higher utilisation rate. Over Q1 19, we expect similar levels of y/y increments as in Q4 18. In Q4 18, we expect first gas export from the 4.5 Mt Corpus Christi T1 (this is reported to be imminent), 4.5 Mtpa Sabine Pass T5, and the 3.6 Mtpa Prelude. There has been little recent news on the latter, so there is a high risk that its start-up could be delayed to Q1 19. The 5.5 Mtpa Yamal T3 is expected to be exporting cargoes in Q1 19 and has already announced the start of LNG production, suggesting exports could be a little earlier than January. The 4.0 Mtpa Cameron LNG T1 project is also scheduled to start in Q1 19, although we also see some delay risk to this project.
One country that has gone against the tide this year and seen gas supply disappoint has been Malaysia, from where gas exports fell by 2.3 Mt y/y over January-October. The main event has been a supply disruption at a key gas field in Sabah in May, and major repair and assessment works are still being carried out. The field is only expected to return to full capacity at some point over summer 2019. This will continue to affect Malaysia’s export performance over the current winter, although the mild November has meant that the global balances have not missed that production as much as it otherwise might have.
For all of 2018, we expect that LNG supply will grow by around 22.0 Mt y/y, with 9.4 Mt coming from Australia/Asia, 6.8 Mt from Russia’s Yamal, and 10.9 Mt from the US. For 2019, we expect LNG export growth to be up by 29.0 Mt y/y. Increasingly, incremental supply is going to be dominated by US output.