El Nino Impact on LNG Demand Unlikely to Be Substantial

A forecast of a 'Super El Nino' in 2026-27 may have implications for global LNG demand, but analysts at Bernstein say it's unlikely to be significant. According to their research note, 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, given its exposure to El Nino-related weather patterns and its reliance on imported LNG. They found that Japanese winter heating degree days would fall by 19%, but estimated LNG consumption would decline only 2% to 9.1 BCFD.

This relatively small demand response is attributed to a large baseload component of LNG consumption that remains relatively insensitive to weather, according to the analysts. They also stated 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.