[GGP] LNG Plant Cost Reduction 2014 – 18

In his  recent  papers  for  OIES  on  the  future  of  gas  in  Europe  and  the  global  energy  economy, Jonathan Stern identified affordability as a key factor in determining whether gas would play a major role in Non-OECD countries. As the majority of traded gas will be LNG, the key question is therefore whether  the  cost  of  developing  new  liquefaction  projects  can  be  low  enough  to  allow  the  gas  to  be competitive  when  it reaches the end consumer.

This paper  by Brian  Songhurst  aims to address this issue. His  2014  paper on  the  same  topic  identified  the  key  causes  behind  the  dramatic  increase  in costs seen in the period 2010-2014, and he now updates his analysis to look at the changes that have occurred in the period  2014-2018. The conclusions that he provides are  vital to an understanding of whether project developers will be confident enough to proceed with new schemes that, according to Stern, must be able to deliver gas to market at a price less than $8/mmbtu. While Songhurst suggests that there are certainly reasons for optimism, it is clearly a topic that merits continued research as the LNG industry moves into a critical phase of new FIDs for the 2020s.

DOWNLOAD the full paper LNG Plant Cost Reduction 2014 – 18 by Brian Songhurst, Research Associate, OIES

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