The LNG sector: outlook

LNG sales are expected to reach 240.8Mt in 2012, approximately 1Mt less than 2011.
In 2012, LNG sales are expected to reach 240.8Mt, approximately 1MT less than 2011. Nine  countries have produced less LNG than in 2011(including Malaysia,Indonesia and  Yemen; each producing at  least 1.5MT less).

However, nine countries produced more (including Australia and Qatar each producing more  than 1.5MT than in 2011). The Woodside Pluto project was the only new LNG supply to come on  stream with an annual capacity of 4.3Mtpa.

Industry outlook  from 2013 to 2025

Gas is the foundation fuel for the global economy growing at 2%pa with the role of LNG
increasing in global gas and expected to rise from 9% in 2012 to 14% in 2025.

The LNG market is expected to be tight until 2017 – i.e. until all the 94Mtpa of capacity under construction is on stream.

The demand growth in the LNG business is shifting much more to Asia. As a result, supplies from the
Atlantic Basin as well as the Middle East and Asia will all be needed.

North American exports, while amassing huge potential, are unlikely to be a complete solution – the market will decide on the eventual level based around contractual liabilities, creditworthiness and project finance ability  – this means early FIDs (Final Investment Decisions) have a real competitive  edge.

Several new conventional projects will be needed, but their costs need to be controlled since the growing demand is predominantly in price sensitive markets.

The future of LNG

As is typical in the LNG business, LNG developers today are designing projects for a start date of five years ahead or more.  Today, a staggering 488Mtpa of new supply projects are announced as being under development with allocated resources and budgets.
They are competing to serve a growing demand of some 175Mtpa by 2025.

Out of the estimated 175Mtpa of new demand growth, 155Mtpa is expected to be in Asia. China is set to become the second largest importer of LNG by 2025 at 70Mtpa. LNG is now about 48% of the power generation mix in Japan.

Source: World LNG Summit 2012