NEW YORK, May 7 (Reuters) - Delays in new liquefaction capacity and robust Chinese and Indian demand could help stem a flood of liquefied natural gas to U.S. shores in 2009, analysts Bernstein said in a research note published on Thursday.
“Significant delays and operational issues with new liquefaction trains are reducing the likelihood of an LNG supply tsunami hitting the global market in the summer of 2009,” the research note read.
Bernstein said that, of the 42.5 million tonnes of new production expected in 2009, only 12.6 million tonnes will be online this summer.
Delays to the 7.8 million tonnes per year QatarGas II Train 5, Indonesia’s 7.85 million tpy Tangguh and Russia’s 4.8 million tpy Sakhalin II Train 2 will all help to push back overall capacity increases.
“By the middle of this year, we expect to see only Sakhalin Train 1 and Qatargas II train 4 up-and-running,” Bernstein said.
In 2008, the U.S. imported only about 350 bcf as strong demand and prices in Asia sucked cargoes east from the Atlantic Basin to the Pacific.
However, Asian demand has fallen this year because of the recession, leaving more LNG in the Atlantic Basin for importers in Europe and the U.S. to absorb.
Some analysts forecast 2009 U.S. LNG imports — already about 15 percent above the same period last year — to near the record highs of 770 billion cubic feet (bcf) seen in 2007, compared to around 525 bcf expected by Bernstein.
“We expect U.S. LNG imports to increase this year (around 50 percent), but by much less than is widely expected, and not enough to cause over-supply of the domestic gas market, alone,” Bernstein said.
Bernstein, whose estimate for average U.S. gas prices in 2009 is much more bullish than most predictions, sees China and India picking up some of the slack, leaving less LNG to head to the United States.
“Reduced imports into Japan and South Korea could be offset by increased imports into China and India,” the report said.
China, which imported around 3.3 million tonnes last year, now has the capacity to import 6.3 million tonnes and the first quarter showed a 74 percent increase year on year.
Spot interest in India has also picked up to around nine cargoes in March and April, compared with just two from November to February, Bernstein said. (Reporting by Edward McAllister; Editing by Marguerita Choy)