The industry needs to run a tight ship if it wants to meet the growing demand for LNG, the pace of the regulatory changes, and the increasing complexity of the supply chains. That’s one of the many conclusions after Gastech 2022, the landmark event for the global natural gas, LNG, hydrogen, low-carbon solutions, and climate technologies industries. More than 150 high-level ministers, CEOs, and energy leaders gathered to discuss and present the industry’s future.
A stress test for the market
Senior figures agreed that the market is going through a stress test and some of the most significant changes witnessed in decades. With an already quite limited LNG fleet and overstretched supply chains, the industry will be asked to do more with less.
The first factor that impacts this new reality is the skyrocketing demand for new LNG tankers, with Qatar leading the buying race. The demand is so huge that shipbuilders are fully booked until the second half of the decade, adding to the tight market at a time of looming demand.
The expansion of the LNG infrastructure and the construction of new terminals are bringing new challenges and new players to the market, fostering competition and shrinking the margins.
The supply chains are becoming increasingly complex, and energy transition is now equal to digital adoption.
Digitalization and more collaboration
The LNG market has evolved a lot in the past 2 years. Still, it lacks specialized systems for LNG trading, storage management, standardized supply chain management, and visibility platforms.Many companies want to avoid vendor lock-in and are seeking for custom software solutions to ensure business continuity.
Many new entrants start with digital-first strategies, where new facilities construction and development of a robust digital foundation go hand in hand from the very beginning. Legacy players feel the pressure and are in a hurry to rethink their digital processes to make their supply chains more agile and cost-efficient.
The whole industry is looking into technology to build more resilient supply chains, manage risk-taking, and encourage collaboration among all the players involved in the chain to create value.
LNG paves the way for other renewables
As many experts agreed that the current infrastructure capacity is insufficient to keep up with the rising global demand, and it will take a while for the new projects to fill the gap, the expanding LNG infrastructure will reduce the cost of gas in the long run, providing a more resilient base electricity source, which will, on the other hand pave the way for the faster adoption of renewable and low carbon sources like hydrogen and green gas.
One of the many potential routes will be adding hydrogen to the existing gas infrastructure by retrofitting and repurposing the midstream infrastructure. This again reaffirms the need for flexible software solutions that can easily integrate new commodities into the energy mix.
The Scalefocus team participated in many discussions on how good decision-making about energy investments and trading depends on good data quality. We shared our insights on how developing superior software solutions in trading, supply-chain, investor relations & asset management is even more valuable now when conditions can rapidly change.
Scalefocus accumulates a more thorough understanding of the whole energy landscape. We continue to upgrade our ecosystem of solution partners and provide our service to more and more clients interested in crafting better management tools.
Stay tuned for the next insights we share and our new collaborations.