Global LNG Outlook | Russell T. Rudy Energy LLC
“World Oil” cites recent analysis by consulting group, Wood Mackenzie, which notes that both Asia in general, and China in particular, saw Liquefied Natural Gas (LNG) demand fall by 2% in 2015. Concurrently, capacity increased with significant start-ups in the U. S. and Australia. In fact, production increased to 250 million tonnes, up 4 million from 2014.
The slow-down in Asian demand in 2015 was somewhat offset by increased demand from Jordan, Egypt and Pakistan which totaled 5.8 million tonnes. LNG production increases in Australian coal seam gas projects accounted for most of the global increase. BG, Santos, and ConocoPhillips all had major startups totaling 26.5 million tonnes per annum. At this rate Australia will be the world’s largest LNG producer by 2019.
Asian LNG prices, which are tied to crude, fell to the point that Atlantic producers are now turning to more lucrative European markets. Falling crude prices have compromised the economics for a number of LNG start-ups in the planning stages, but U. S. projects in the final stages of completion are still in progress. Chenerie Energy will proceed with two LNG processing trains at Corpus Christi and a fifth one at Sabine Pass.
Shell’s acquisition of British Gas was a major development in 2015. This combination will make Shell the world’s largest LNG marketer with a 15% share.
However, Wood Mackenzie observed that the start-up of the Sabine Pass facility will be a key milestone in 2016. This increase in output might be somewhat offset if the threat of a prolonged outage due to civil unrest in Yemen materializes. Much of the anticipated additional global LNG capacity will not come on stream until after 2016.
Wood Mackenzie analyst, Chong Zhi Xin, concludes, “Several key dynamics will affect price and flows, and we will be watching these closely over the course of the year: coal to gas competition in both Europe and Asia; Chinese energy policy; access to regas capacity in Europe, and contract flexibility will all become important as the year unfolds.”
To read the article in its entirety, please go to http://www.worldoil.com/news/2016/01/13/us-australian-lng-start-ups-in-2016-but-real-lng-growth-yet-to-come .
