Global LNG market faces supply deficit, higher prices from decade-long impact of Mozambique delays

The global liquefied natural gas (LNG) market, which was set to be constantly loose in the second part of this decade, is instead set to get tighter and could even see annual supply deficits as a result of likely delays in the development of LNG projects in Mozambique due to the country’s worsening security situation, a Rystad Energy report reveals.

Mozambique was once poised to catapult into the upper ranks of global LNG producers by the middle of this decade, but Total’s recent force majeure declaration signals indefinite delays on its onshore Mozambique LNG complex. The violent insurgencies also threaten ExxonMobil’s yet-to-be sanctioned Rovuma LNG. Together the two projects represent 28 million tonnes per annum (tpa) of LNG capacity.

The market could see up to 9 million tpa of supply removed between 2026 and 2030, disrupting global balances. Rystad Energy had previously forecasted a largely balanced market in 2026, but now there could be more competition for available volumes that year, leading to an upside risk in prices and higher price volatility.

Similarly, the loose market conditions of 2027-2028 that Rystad Energy had originally forecasted could become more balanced if Rovuma LNG’s 15.2 million tpa of potential capacity is unavailable. Finally, across 2029 and 2030, the market could tighten again and face supply deficits amid an expected surge in global LNG demand, as Rovuma LNG may only reach plateau production after 2030.

“The ongoing insurgency in the Cabo Delgado region, while initially seeming manageable, appears to have dented Mozambique’s LNG dreams. We now expect Total’s Mozambique LNG to start production only in 2026, with construction unlikely to resume without demonstrably stronger security arrangements at the Afungi site. Rovuma LNG may be delayed enough to mean it is brought online only around 2029,” says Kaushal Ramesh, LNG analyst in Rystad Energy.

In its updated forecast, which accounts for delays in the two projects in Mozambique, Rystad Energy now expects an oversupply of 4 mtpa in 2026, down from its previous forecast for 6.4 mtpa. The impact of the delays will grow in 2027, causing the expected oversupply to shrink to 11 mtpa from previously forecast 15.9 mtpa. The largest downgrade is for 2028, with oversupply being limited to just 1 mtpa, down from 9.3 mtpa in the previous forecast.

If the expected delays materialise, 2029 will see an LNG supply deficit of 5.6 mpta instead of a previously expected surplus of 2 mtpa. The effect will persist but will start smoothening out from 2030, with an expected supply deficit of 1.7 mtpa instead of a surplus of 1 mtpa.

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