The liquefied natural gas (LNG) market has massive potential, leading energy executives said Monday, but warned the commodity is still too expensive for many consumers around the world.
Oil giants and energy companies are increasingly interested in LNG — a form of natural gas chilled to liquid form — as governments around the world mandate using cleaner fuel than coal.
It comes at a time when the race is on for LNG producers to build export terminals amid soaring demand for the commodity.
Speaking at an industry event at the ADIPEC oil summit in Abu Dhabi, Claudio Descalzi, CEO of Italian oil and gas giant Eni, said: "LNG has huge potential."
"But one of the problems with it, one of its fragile points, is the price. It is very expensive."
The global LNG market is currently going through of a flurry of fundamental changes, as demand continues to grow and market liquidity increases.
But, the demand for LNG is evident — it is reportedly expected to nearly double to 550 million tonnes a year by 2030.
One of the key reasons for LNG's fast-growing demand, according to BP CEO Bob Dudley, is the U.S. sourcing an "abundance" of gas supplies in recent years.
Dudley also said he agreed with Eni's Descalzi regarding the cost of LNG too, saying it remained an issue for consumers worldwide.
"It has really become famous for how expensive it is" Dudley said Monday, adding companies had typically spent a lot of money on LNG investment projects without getting a great deal in return.
"One of the issues shaping the industry is some countries are going to have to choose between low price coal and low carbon LNG. That problem has not been solved," Dudley said.
Late last week, Michele Della Vigna, Head of EMEA Natural Resources Research at Goldman Sachs, told CNBC that "Big Oil" companies were starting to understand that if they wanted to be widely owned by investors, they needed to show that they were serious about minimizing the amount of carbon in the atmosphere.
In doing so, Della Vigna said European oil companies were generally handling the transition from "Big Oil" to "Big Energy" better than their U.S. rivals.
Petronas CEO Wan Zulkiflee said Monday that while clearly growth in the LNG market was an exciting prospect, highlighting the Malaysian oil company's long investment history in the commodity, he did not necessarily agree that it would prove to be the key driver of a so-called "energy transition."