The LNG report recently published by the International Gas Union (IGU) – the first of the organisation’s French Triennium – contains many useful insights into the current state of the industry. As IGU President Jérôme Ferrier says in his introduction, “the LNG market is a major subject for discussion amongst IGU experts”, as it is for all of us in the natural gas industry.
The part of the report that really caught my eye was the final chapter in which the experts pose, and provide answers to, a series of key questions about where the industry is headed. So here is a summary of what the experts have to say – along with a few comments of my own, and some links to articles Gastech News has recently published that shed light on the topics the experts have raised.
Will LNG supply grow in 2013? Unusually, in 2012 LNG trade fell, bucking a trend of what has been strong growth for a period of three decades or more. There is a consensus within the industry that this was the result of constrained supply rather than a lack of demand. Only one new liquefaction project, Pluto LNG in Australia, came on stream. Some liquefaction projects faced supply issues, notably in Algeria, Egypt and Indonesia. Some faced security issues, for instance in Yemen and Nigeria. And some plants produced less than usual because of accidents, for example a summer fire at Malaysia LNG.
LNG TRADE VOLUMES, 1990-2012 – Trade volumes have grown robustly for most of the last two decades, with 2012 recording an unusual fall. The number of players, both exports and importers, has also grown strongly. The dip in the number of exporters in 2012 is down to Libyan exports ceasing because of damage to facilities during the civil war. (Sources: IEA, PFC Energy.)
“As demand continues to hold strong,” says the IGU report, “particularly in Asia, the ability of certain producers to grow exports will determine just how tight the market will remain, especially since the only net supply growth in 2013 is expected to come from Angola LNG and probably new trains in Algeria. “These various ‘upstream’ uncertainties are difficult to predict and the industry may witness increasing spot and short-term transactions to compensate for the lack of visibility.”
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Article written by: Alex Forbes
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