In both the 2017 and 2018 British Petroleum (BP) Energy Outlook’s the reports suggested that the global LNG trade through maritime routes would grow rapidly, eventually composing half of all trade over the next 20 years. The BP reports and many others show just how strong and dynamic the new natural gas and LNG market is. Trade of LNG grows seven times faster than pipeline trade, and from 2018 all global consumptions could be up to 40%. Deliveries of LNG by sea, which until recently were only an additional import solution in relation to land gas pipelines, will account for up to 50% of all gas trade in the world, according to the 2018 BP report.
Confirmation of this theory can be found in the activities of the largest oil and gas companies, such as Saudi Aramco, Sinopec, ExxonMobil or Royal Dutch Shell, who promote natural gas as a clean fuel for the future and work to replace coal in the growing energy demand in the world.
The above market perspective makes natural gas a very attractive asset, which can be noticed in the activities of such a giant as Saudi Aramco, who is looking for possible acquisitions in this business in virtually every corner of the world.
Saudi Aramco recently signed numerous energy development deals with foreign firms in its drive to meet one of the early target goals spelt out in the Saudi government’s National Transformation Programme (NTP). Company Officials signed almost $4.5 billion worth of agreements with international contractors for projects largely targeting the expansion of the kingdom’s natural gas production. These activities coincided with the public offer on Initial Public Offering (IPO).
In response to the offer, the Russian Direct Investment Fund (RDIF) has pledged to set up a “significant” pool of investors for the potential $100 billion (IPO) by Saudi Arabian. There has been a discussion about this transaction by Novatek and Saudi Aramco over the Arctic LNG-2 project, which aims to start producing liquefied natural gas from 2022-2023, and that an agreement could be signed this year. Money from IPO could help in obtaining Saudi Aramco’s access to the Arctic project and significantly increase the company's share in the LNG market in the world.
Developing sources and increasing demand have caught the attention of shipyards and companies associated with shipping. In recent years shipyards have experienced a recession-related to a drop in oil prices in recent years, and thus a reduction in orders from both mining companies and oil transporters by sea. The development of the LNG market has increased trade including exports and the increase in demand has caused the shipyards to begin working at full capacity with its order portfolio being booked for the next few years. The future is not only LNG carriers and LNG-fueled vessels, but FSRUs (Floating Storage Regasification Units) and FLNG (Floating liquefied natural gas). All types of facilities developed to tap underwater LNG reserves and which will force the market to build more and more technologically advanced units.
If you would like to hear more about the latest natural gas and LNG developments and where the industry is heading from key major gas players, register now to attend the 2018 Gastech Exhibition and Conference in Barcelona.
Image courtesy of GAZ-SYSTEM
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