With numerous U.S. liquefied natural gas (LNG) export projects creeping toward first cargo and a posse of would-be exporters on the Canadian west coast, global buyers might be looking to North America as their future cheap gas breadbasket. They probably shouldn’t, said analysts at BernsteinResearch in a note last week.

The note by Senior Analyst Neil Beveridge looks at the global market this year and beyond and predicts a “restart of the LNG growth cycle.” He wrote that 2013 was the second year of contraction for the global LNG market. It wasn’t driven by demand shrinkage but rather a supply shortage. “Given the tight nature of the market, spot LNG prices reached record highs this winter in Asia at over US$19/Mscf as Asian customers competed against European buyers for the few spare LNG cargoes.”

Longer term, though, there is new supply coming from the United States, Canada and East Africa; should buyers in Asia, Europe and elsewhere be excited?

“While buyers believe they are holding the upper hand in a market, which appears increasingly gas long, we believe that they continue to overestimate the speed at which new projects will come to market,” Beveridge wrote.

Six U.S. export projects have conditional approval from the U.S. Department of Energy to export to non-free trade agreement countries and one has final approval. But only one has received facilities approval From the Federal Energy Regulatory Commission (Cheniere Energy’s Sabine Pass project in Louisiana), Beveridge noted, adding that progress on projects in Canada and Mozambique has been slower than expected. Additionally, the recent decision by Indonesia — one of the world’s largest LNG producers — to import LNG from the United States (see Daily GPI, Dec. 6, 2013) “highlights some of the major shifts” in LNG markets, Beveridge wrote.

While the supply side is expected by Beveridge to be crimped, the demand side for LNG is poised to blossom, in part on the back of geopolitical events.

“The recent tensions between Russia and the West over Crimea (see Daily GPI, March 24) will only galvanize European leaders’ determination to diversify gas supply towards LNG over the long run,” Beveridge wrote. “South America was the fastest-growing region for LNG demand last year (up 18%), which would have been hard to predict. In the Middle East, the UAE (also an LNG exporter) has announced plans to create a new LNG import hub at Fujairah as tensions with Qatar increase. We do not believe this demand potential is being fully factored in by the market.”

So the Bernstein outlook is for firm LNG prices with a continuing link to oil prices with global demand for LNG doubling over the next 10 years from 230 million tonnes per annum (mtpa) today to more than 460 mtpa by 2025.