LNG Market Enjoys Strong Growth in 2018
The LNG market recorded a third consecutive year of growth in 2018 but fundamental change is on the way, an April 1 report released by GIIGNL, the international association of LNG importers, said.
GIIGNL president, Jean-Marie Dauger, said: "In 2019 we are likely to reach a tipping point with many long-term supply contracts starting to expire and as new supply comes on-stream. Our industry needs to become more innovative and efficient in trading, fully embracing the opportunities offered by digital technology.”
The report says LNG imports reached 314mn mt, representing 8.3% growth compared with 2017. It was the third largest annual increase after 2010 and 2017.
Two new countries -- Bangladesh and Panama -- joined the importers’ ranks, boosting their overall number to 42. Asia firmed up its position as the leading importing region with a 76% share of global LNG imports.
“Policy choices in the Asia-Pacific region largely drove the growth, fostered by measures to improve air quality in China and by uncertainties regarding nuclear power in South Korea,” the report reads.
However, it is also noted that European imports are picking up. The reduction of price spreads led to a strong rise of import activity in northwest Europe towards the end of the year.
Meeting this new demand are 20 LNG exporters. New supply volumes were driven by new production from Australia, the US and Russia. Eight new onshore liquefaction trains were commissioned in these countries in 2018. A floating liquefaction unit also came online in Cameroon during the year.
However, the Pacific Basin remains the largest source of LNG supplies with 43.8% of the global market, followed by the Middle East. The Atlantic Basin took third spot, but is expected to make gains in 2019 as new US projects come online.
Meanwhile, spot and short-term volumes continue to raise their share of the market. Cargoes delivered under contracts of four years or less accounted for 32% of total imports or 99.3mn mt and cargoes delivered less than three months from the transaction date reached a quarter of the market compared with a fifth in 2017.