The International Gas Union’s (IGU) 2017 ‘World LNG Report’ has highlighted the dynamic 2016 experienced by the global LNG industry.
Last year saw a significant growth in LNG supply projects, as well as increases in demand for LNG as a fuel from new and existing markets across the globe.
Global LNG trade in 2016 climbed 5% from 2015 to reach a record 258 million t. This dramatic increase is particularly noticeable when compared with the average 0.5% growth rate of the previous four years.
The IGU attributes the growth to a significant increase in new supply, due largely to the start of exports from the US Gulf of Mexico, as well as the start of commercial operations in Australia Pacific LNG, among others. These new projects come about as governments, businesses and consumers become increasingly aware of the advantages of natural gas in the global energy mix, and are encouraging trends pointing to further growth in the LNG market.
There was also significant increases in demand as LNG finds a role as a fuel of choice in new markets. The most pronounced increase in demand comes from Asian markets, with China’s LNG consumption increasing dramatically by roughly 35% to 27 million tpy. However, some markets, including Japan and South Korea, have shown signs of satiation as other forms of energy come to the fore, in part showing the flexible value of LNG as a fuel source. This was particularly prevalent in Brazil, where a resurgence in hydro power has reduced demand for LNG by 80%.
The latter half of 2016 saw Asian and spot LNG prices reach US$9.95/million Btu by February 2017, due to disruptions to supply and cold winter temperatures. This followed a dip in price in the first half of the year to US$4.05/million Btu, primarly due to supply outstripping demand, generating an average Northeast Asian spot price for 2016 of US$5.52/million Btu. The UK National Balancing Point (NBP) finished 2016 at US$5.44/million Btu.
In 2016 global liquefaction capacity reached 339.7 million tpy. This growth includes new projects such as Sabine Pass LNG, as well as Gorgon LNG and Australia Pacific LNG. Global liquefaction capacity is expected to grow significantly over the next few years, with 114.6 million tpy of capacity under construction as of January 2017.
LNG continues to play an essential role in the marine shipping sector – with 31 newbuilds delivered from shipyards to the LNG shipping fleet in 2016. This constitutes an increase of 7% compared to 2015.
David Carroll, President of the IGU, said: “The increased use of natural gas is hugely beneficial to the environment, and subsequently human health, across the globe. Our recent reports on urban air quality, as well as the use of LNG in marine shipping, are testament to this. This year’s ‘World LNG Report’ is extremely promising, and LNG maintains an essential role in expanding access to gas across the globe, acting as a key pillar in the future energy mix.”
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/06042017/igu-releases-world-lng-report/