ConocoPhillips has warned that new liquefied natural gas (LNG) plants in Australia, Europe, North America and Africa may produce output that exceeds LNG demand, according to The Australian.
Talk of the LNG sector facing a supply crunch has resulted in many upbeat predictions for the sector and new plants coming on-stream.
However, a company official warned that the tide may change for LNG, and new plants in Australia could play a key role in creating an oversupply.
“In the longer term, capacity additions looks set to catch up with, and even overtake, demand,” Conoco's head of commercial in Australia Mike Nazroo told an industry conference in Darwin on Wednesday, according to The Australian.
“Much of this supply growth is set to come from the Australian project wave, but there will be competing projects from North America, East Africa, Nigeria and Russia.”
Mr Nazroo repeated estimates by McKinsey that if half of all non-approved LNG capacity is built, a supply crunch could materialise by 2020, the newspaper added.