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The oil cartel’s Joint Technical Committee held published its World Energy Outlook 2020 and its
a virtual monthly meeting on October 15. They Global Gas Security Review last week, with LNG
considered this renewed surplus as a worst-case featuring significantly in both.
scenario, Reuters reported citing a confidential The IEA noted that LNG remains central
document. They had ruled this out as a possibil- to ensuring the security of global gas supplies,
ity in their September meeting. adding that the super-chilled fuel played a major
The committee’s base-case scenario still antic- role in the market’s adjustment after COVID-19
ipates a supply deficit in 2021 of around 1.9mn made gas demand crash.
barrels per day, although this was less than the Monthly global exports of LNG fell by 17%
2.7mn bpd deficit forecast a month earlier. But between January and July 2020, the agency said,
their worst-case scenario foresees a swing to a discussing the role the industry is playing in bal-
200,000 bpd surplus. This could mean that oil ancing gas markets. LNG contracting activity Further
storage levels remain above the five-year average collapsed from a high of 95bn cubic metres in
next year, rather falling under it after the first 2018 to about 35 bcm in the first nine months challenges lie
quarter, as OPEC+’s base-case scenario predicts. of 2020. ahead for the LNG
Unprecedented cuts by the alliance of oil pro- “Since the IEA started tracking flexibility in
ducers have been critical in rebalancing global LNG markets in the first edition of the Global industry, with one
supply with demand since the coronavirus pan- Gas Security Review five years ago, we have seen
demic struck. They had hoped to taper the cuts a notable improvement across a range of LNG third of active
by 2mn bpd at the start of 2021, but a looming market flexibility metrics. This is improving
surplus could threaten these plans. security of supply and was critical in enabling the contracts due to
Meanwhile, BP has confirmed that the market to adjust to the historic demand shock expire over the
Trans-Adriatic Pipeline (TAP) is still on track to witnessed in the first half of 2020,” the IEA’s exec-
deliver the first gas from Azerbaijan to Europe by utive director, Fatih Birol, said in a statement. next five years
the end of this year, as the UK oil major looks to In the World Energy Outlook, meanwhile,
quell concerns of a delay amid continued fight- the agency noted that a record year of approvals
ing in the Nagorno-Karabakh region. for new liquefaction projects in 2019 had now
In a statement on October 13, BP said the been followed by a year with no new projects
commissioning of TAP and an interconnecting green-lit – and none likely by the end of 2020.
pipeline would be completed in November. This Further challenges lie ahead for the LNG
“will allow the Shah Deniz consortium to finalise industry, the IEA warned, with one third of
the final steps required to start the 25-year-long active contracts due to expire over the next five
supplies of natural gas from Azerbaijan to cus- years. Over the same period, global liquefaction
tomers in Italy, Greece and Bulgaria as planned capacity is projected to increase by 20% from
by the end of 2020.” projects that are currently under development,
according to the agency.
If you’d like to read more about the key events shaping “These two factors will strongly impact the
the former Soviet Union’s oil and gas sector then structure of LNG supply, and create new oppor-
please click here for NewsBase’s FSU Monitor . tunities for buyers and challenges for marketers
in a context of demand uncertainty,” the IEA
GLNG: IEA highlights LNG’s role said.
The International Energy Agency (IEA) last
week highlighted the role of LNG in adjusting to If you’d like to read more about the key events shaping
a drop in global gas demand in the wake of the the global LNG sector then please click here for
coronavirus (COVID-19) pandemic. The agency NewsBase’s GLNG Monitor.

Week 42 22•October•2020 www. NEWSBASE .com P11