El Nino Forecast Won't Dent Global LNG Demand Analysts Say

Analysts at Bernstein have assessed the potential impact of a forecast 'Super El Nino' on global LNG demand in 2026-27. According to their research, even if the weather event becomes one of the strongest on record, the reduction in Asian LNG imports could be less than 1 billion cubic feet per day (BCFD), or about 1% of global LNG imports.

The analysts used Japan as a proxy for Asia due to its exposure to El Nino-related weather patterns and reliance on imported LNG. They found that while Japanese winter heating degree days would fall by 19%, estimated LNG consumption would decline only 2% to 9.1 BCFD. This relatively small demand response is attributed to the large baseload component of LNG consumption, which remains relatively insensitive to weather.

The analysts also noted that 'structural and market factors' such as storage levels, fuel-switching economics, LNG prices, coal markets, and supply disruptions are likely to have a greater influence on demand than El Nino-related temperature changes. As a result, they concluded that the forecast Super El Nino is unlikely to materially weaken global LNG demand.