By Bloomberg New Energy Finance (BNEF)

 

BNEF sees LNG demand grow to 280MMtpa[1] this year and to 479MMtpa by 2030. However, new export projects across the U.S. and Australia could lead to supply overcapacity until 2024. 

 

London, New York and Singapore, 13 September 2017 – Imports of liquefied natural gas (LNG) will set a new record this year on the back of a robust 8.8% growth – the fast

Figure 1: Global LNG demand forecast Source: Bloomberg New Energy Finance, Poten & Partners, Customs. Note: Re-exporting countries are excluded. Emerging markets include Pakistan, Bangladesh and other countries in South Asia, Latin America and Africa.

est since 2011, according to new research published today. This surge is driven by the uncertainty of nuclear power generation in Northeast Asia, energy market reforms and concerns on air pollution in China, and higher capacity in major exporting regions. This is despite disruptions like Qatar’s rift with Saudi Arabia, demands for export curbs in Eastern Australia and falling demand in Latin America.

 

 

Global LNG Outlook 2017, the latest forecast from Bloomberg New Energy Finance’s global gas team, shows that consumption will continue to rise despite an overall fall in the cumulative demand of the world’s largest importing region of Japan, South Korea and Taiwan (JKT).

 

Ashish Sethia, global head of LNG analysis said: “Asia will continue to be the center of gravity for the world’s LNG demand, importing over 70% of the fuel until 2030. However, from 2025, China, India & ASEAN (Southeast Asia) together will import more LNG than Japan, Korea and Taiwan combined.”

 

The report highlights that LNG will continue to reach new markets as prices remain low, while floating storage and regasification technology makes it easier for new countries to set-up low cost import infrastructure.

 

“By 2022, 20% of global LNG import capacity will be from floating storage and regasification terminals, which are faster to deploy. This will help unlock demand in many new markets,” commented Maggie Kuang, head of Asia Pacific LNG analysis and lead author of the report.

 

European LNG imports are expected to expand in the long-term and cross 100MMtpa by 2030.

“European LNG imports will double by the late 2020s, as declines in indigenous production open up opportunities for Russian pipeline exports and LNG,” stated John Twomey, head of European gas analysis.

 

The sustained growth in demand is not expected to result in surging prices as the forecast for LNG supply is higher until 2024 – driven by significant build-out of export capacity in the U.S. and Australia.

 

Anastacia Dialynas, lead LNG analyst, Americas said: “Over 20% or 146MMtpa of proposed LNG export capacity across North America has got all the necessary government approvals. The Trump administration is supporting the LNG export industry further. However, projects face hurdles that are more economic than regulatory: finding buyers and committing to a final investment decision.”

 

Only 5.7MMtpa of LNG term contracts were signed in the first half of 2017, the lowest figure for any half-year since 2010. The lack of interest in buyers to commit to long-term contracts is also making it difficult to build and finance export projects.

 

Moreover, new U.S. LNG exporters will not only compete with established players like international oil companies but with traditional buyers as well. These traditional buyers are emerging as portfolio players, as a growing number of their purchase contracts allow them to divert and resell LNG cargoes.

 

An executive summary of BNEF’s Global LNG Outlook 2017 can be downloaded via our website.

 

ABOUT BLOOMBERG NEW ENERGY FINANCE

Bloomberg New Energy Finance (BNEF) is an industry research firm focused on helping energy professionals generate opportunities. With a team of 200 experts spread across six continents, BNEF provides independent analysis and insight, enabling decision-makers to navigate change in an evolving energy economy.

 

Leveraging the most sophisticated new energy data sets in the world, BNEF synthesizes proprietary data into astute narratives that frame the financial, economic and policy implications of emerging energy technologies.

 

Bloomberg New Energy Finance is powered by Bloomberg’s global network of 19,000 employees in 192 locations, reporting 5,000 news stories a day. Visit https://about.bnef.com/ or request more information.

 

ABOUT BLOOMBERG

Bloomberg, the global business and financial information and news leader, gives influential decision makers a critical edge by connecting them to a dynamic network of information, people and ideas. The company’s strength – delivering data, news and analytics through innovative technology, quickly and accurately – is at the core of the Bloomberg Terminal. Bloomberg’s enterprise solutions build on the company’s core strength: leveraging technology to allow customers to access, integrate, distribute and manage data and information across organizations more efficiently and effectively. For more information, visit www.bloomberg.com or request a demo.

 

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[1] MMtpa: Million metric tonnes per annum

 

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