Qatar’s announcement on Tuesday that it remains committed to expanding its natural gas exports worldwide by 2024 brings into focus the question of when the ongoing supply glut in global liquified natural gas (LNG) markets could come to an end.

The gas-rich country will have a total liquefaction capacity of 110 million metric tons/year (mmty) by 2024, up from its current 77 mmty, around the same time that some analysts have projected that the current LNG supply overhang will either end or markets could even possibly experience a shortage of the fuel. Qatar is also expanding capacity via the Golden Pass LNG export project in Texas with ExxonMobil Corp.

Going forward, LNG demand will come from new and legacy buyers predominantly in the Middle East, Europe and Asia, particularly as China, per government mandate, continues to use gas to replace coal needed for power generation and industrial usage. Japan, South Korea and Taiwan will also likely see demand growth for the fuel flatten over this time period.

However, increased LNG demand from India, Pakistan, Bangladesh, Thailand, Vietnam and the Philippines will help the Asia-Pacific region maintain its global LNG demand lead well into the next decade. Currently, the Asia-Pacific region accounts for around two-thirds of global LNG demand.

Qatar is the world’s top LNG exporter, but could lose that slot sometime next year to Australia. Earlier this year, Australia’s liquefaction capacity of 80 mmty bypassed Qatar’s capacity of 77 mmty.

On the supply side, Qatar’s increased capacity will also come onstream around the same time numerous LNG projects in the United States, Russia and elsewhere become operational. Exports of LNG from the United States are expected to increase to more than 100 billion cubic meters in 2024, bypassing Qatar and Australia, the International Energy Agency said in July.

Russia, which recently deemed its LNG sector as a national priority, held 8% of the global market last year. It now aims to increase that share to 20% by 2035 to vie with other leaders as the dominant player.

However, Royal Dutch Shell plc, the world’s largest LNG buyer and seller, has warned of a possible LNG supply crunch by the mid-part of the next decade. In its LNG Outlook 2019, Shell said while a rebound in new long-term contracting last year could revive investment in liquefaction projects, it still expects supplies to tighten in the mid-2020s.

McKinsey & Co. said that 75% of future liquefaction capacity expected online by around 2022 is either already constructed or has received final investment decisions (FID). Analysts claim that market rebalancing is expected to take place around 2022.

The systemic problem for LNG markets, and consequently yet to be financed LNG project proposals, is because of ongoing downward pressure on spot prices in Asia and prices in Europe, which are at 10-year lows. Ample gas supply inventories in Japan, China and South Korea, as well as moderate temperature forecasts in Northeast Asia for the winter season, are likely to keep prices unseasonably low.

The drop in spot LNG prices this year, dipping below the $4.00/MMBtu price point in August, has caused some buyers, especially in Japan, South Korea and India, to press for price renegotiations as well as the removal of restrictive destination clauses. Long-term contract pricing mechanisms are also evolving in indexation and slope as the natural gas and oil markets diverge, putting pressure on buyers to reshape their contract portfolios.

Lower LNG prices and the call for new price indexation could also impact future LNG project proposals that need the security of higher prices locked into contracts to push ahead with FIDs. In essence, as buyers in Asia seek to take advantage of lower prices, it could backfire and hurt them in the long term by discouraging investment in LNG projects needed to maintain supply.

This possible scenario was discussed last month at an LNG conference in Tokyo. “We are going to have an issue in the coming three or four years, paying the price” for the lack of FIDs over the past two or three years, Total SA’s Laurent Vivier, president of the gas division, said at the conference.

The impact from this dynamic may be felt in 2021 when only one project is expected to start up, Wood Mackenzie said. That would increase to three in 2022 before falling back again to one start up in 2023. “The supply outlook is very much a feast-to-famine situation,” said Wood Mackenzie’s Nicholas Browne, Asia gas and LNG director.