The 2022 liquefied natural gas (LNG) market faces significant uncertainty, with forecasts showing a tight market and elevated prices for at least the next two to five years. Meanwhile, buyers face uncertainties over the role of LNG in the energy transition and how to best position themselves for the transition to lower-carbon fuels.1
About the survey
Our 2022 LNG Buyer Survey was conducted in February–March 2022, during the onset and immediate aftermath of Russia’s invasion of Ukraine. The survey included 47 players (established, emerging, and new buyers) from approximately 20 countries, representing 80 to 85 percent of the total liquefied natural gas (LNG) market (exhibit). The survey and supporting interviews addressed several top-of-mind topics, including demand drivers and characteristics, portfolio and contract preferences, LNG innovations, contract review and arbitration, and LNG supplier assessments.
Many buyers are also concerned about supply shortages and security of supply following several years of ample supply and a generally shared perception that they could rely on a functioning market. Today, however, buyers are reverting to longer-term contracts and prioritizing bilateral relationships with suppliers.
With these points in mind, McKinsey recently completed its 2022 LNG Buyer Survey to assess how buyer needs and attitudes are evolving around the world (see sidebar, “About the survey”).
Summarizing our survey results, the LNG market has shifted toward a focus on supply security and a return to long-term contracts. However, other criteria, such as flexibility, pricing innovation, and emissions management, remain important. Overall, sellers that can effectively differentiate and meet specific buyers’ needs stand the best chance of successfully riding out this volatile wave and leading into the next industry cycle.
