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Frost & Sullivan: global LNG developments

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Hydrocarbon Engineering,

Frost & Sullivan has released its ‘Global Liquefied Natural Gas (LNG) Developments 2015’ report, which highlights the market trends that have triggered global LNG industry growth. The base year used for analysis is 2014; forecasts run 2015 to 2025.

Global natural gas demand is likely to increase at a growth rate of 2%, driven by the Asia Pacific region, with countries such as Japan, China, and India absorbing high volumes of LNG. With the glut of natural gas supply in Australia and recent developments in US shale gas production, LNG trade will expand tremendously. Going forward, Frost & Sullivan forecasts this market to become a buyers’ market, where LNG prices will be linked to both crude oil and Henry Hub gas prices.

Report highlights

  • The oil and gas industry is a volatile one, where new technologies and developments play a big role in shaping the dynamic landscape. The LNG market has progressed a great deal as a result of these developments.
  • Compared to pipeline, LNG provides flexibility to regions that lack domestic gas resources, and thus bridges the gap between the gas rich and gas deficit regions.
  • On the demand side, most of the LNG consumption originates from the Asia Pacific regions. Japan consumes a large portion of the world’s total LNG supply, followed by China and India.
  • On the supply side, Qatar has, so far, controlled the world’s LNG supply market. However, technological advancements in terms of hydraulic fracturing have resulted in significant gas production from the shale gas reserves in the US. This is a game changer for the US, which will no longer be gas deficit and dependent on LNG imports.
  • On the other hand, Australia’s new liquefaction capacity is likely to come online by 2016, which will act as an enabler in meeting the growing LNG demand. The availability of excess LNG will make the market a buyers’ place, where consumers will have the advantage to procure LNG at negotiable prices In addition, LNG consumers are likely to move away from crude oil linked LNG contracts.

Adapted from press release by Rosalie Starling

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