LNG supply could fall short of demand by about 150 million tonnes per year by the end of this decade without additional projects coming online.

It’s an issue that needs to be addressed now, says Mark Gyetvay, chief financial officer at Russian producer Novatek.

Novatek expects worldwide LNG demand to continue to grow even as countries decarbonise their energy systems. The idea that gas is “falling out of the equation is grossly overstated”, Gyetvay said.

He expects increased coal-to-gas switching in the power sector, hydrogen production and gas being used in tandem with intermittent renewables for power generation to boost gas demand in the coming years.

But new financial investment decisions (FID) on new projects will need to be made to meet the rising demand.

While spot northeast Asian LNG prices spiked earlier this month, firms are unlikely to make FIDs based on “inflated prices”, Gyvetvay said.

In Australia, three export projects are expected to reach FID this year: Santo’s (ASX:STO) Darwin LNG Barossa project, Mitsui’s Waitsia, and Woodside’s (ASX:WPL) Scarborough projects.

Overseas, Qatar has committed to the North Field expansion that will add 32Mt of LNG production per annum, the first phase of expansion at the giant project while a second phase could come online in 2027.

Around 9 other LNG export projects are targeting FID in 2021. All nine projects look unlikely to pull the trigger in the current environment, according to CommSec.

Santo and Woodside share price charts