World LNG supply is set to expand by 80% by the end of this decade as investments switch from oil to gas, according to investment banker Goldman Sachs.
The investment bank’s research arm said US LNG will dominate future supply and lower prices in Europe and Asia.
It said this will bring to an end the energy crises seen following Russia’s invasion of Ukraine in 2022.
“We’re projecting an 80% increase in global LNG supply by 2030, which will be driven by new projects in North America and Qatar.”
The research team said growing global demand is prompting more local supply from the US.
It expects this growth to mushroom in the next two to three years, forecasting a 54% increase in shale gas production by 2029.
This will bring cost advantages, the company said, with costs expected to flatten further.
“This has become an extraordinary driver of exporting LNG and making the US the world’s largest exporter of energy and by far the biggest source of LNG to Europe.”
With US LNG export capacity set to double in the next three to four years, Goldman Sachs Research said it is “questionable” how many more projects will go ahead, especially if energy prices start to come down.
“We expect prices to face downward pressure because, just based on what’s already under construction, the US will double energy capacity, which is extraordinary.”
Goldman Sachs Research said the oil and gas industry is undergoing “a major transformation” as it braces for the eventual long-term decline in oil demand and a rising global need for natural gas.
It said that while growth in oil investment shows signs of peaking in non-Opec countries, investment in LNG is expected to increase more than 50% by 2029.
The research arm said the industry had 73 major projects under development globally in 2023, up over 30% from the start of this decade but 32% down on the level seen 10 years ago.
It concluded: “..the global gas market will grow 50% during the next five years.”
