Eni's LNG market for 2026 is 'finely balancing' due to Asian demand and a thin supply
An Eni executive stated that the global LNG market will remain 'finely balanced' this year due to thin supply buffers and low European inventories, as well as a resurgent Asian demand. This leaves little room for weather-related shocks.
Eni's Cristian Signoretto is the director of global gas and LNG portfolio. He said that Europe has very little storage, so we must replenish it this summer.
He added that he expected Asia, China to recover a little from last year's low consumption, as prices would be lower than they were last year.
Signoretto explained that if there is a sudden cold snap in the last months of winter, or if a heatwave occurs in Asia or Europe in the summertime, it could be difficult to get gas to European storages.
We still view 2026 as a very finely balanced year.
He added that from 2027 to?2028, however, the additional LNG supply would help further soften prices. However, project delays are still a possibility.
Signoretto stated that new demand will come from Southeast Asia and the Middle East if the price of LNG falls below $10 per million British Thermal Units (mmBtu).
PORTFOLIO AIM
Eni said that it plans to have 20,000,000 metric tons of LNG per year (mtpa), contracted in its portfolio, by the years 2029- 2030.
Signoretto stated that Eni still needs to purchase about 7 mtpa LNG in order to achieve this target.
He said that the company would try to include LNG produced at its sites in Mozambique and Indonesia. Its production will make up 605 to 70 percent of the portfolio.
"And for the rest, we're comfortable having third-party LNG as part of our portfolio."
EUROPE
In Europe, Donald Trump's transactional diplomatic approach and his pursuit for "energy dominance", have raised concerns over the region's heavy dependence on U.S. LNG. This has replaced most of Russia's previous volumes.
Signoretto stated that policy makers need to intervene to bring about a change. Market fundamentals are driving U.S. cargoes towards Europe due to shorter shipping distances.
He said, "This is the reality of the market. There's a significant source of LNG the other side the Atlantic." It's the most efficient way to transport LNG. This is why American LNG is being shipped in large quantities to Europe.
Kpler data indicates that the European Union will import almost 60 million tonnes of LNG from America in 2025. This is nearly four times more than what was imported in 2021. (Reporting and writing by Emily Chow in Doha, Marwa Rashad and Clarence Fernandez; editing by Florence Tan and Clarence Fernandez).
(source: Reuters)
