Update on LNG Industry Development
The LNG industry development is moving along rapidly with new gas discoveries, fresh projects and heightened interest from buyers. The coming years are expected to be even more active and profitable for exporters.
For example, the United States will be able to export more than double the amount of LNG by the end of next year, according to the Energy Information Administration, making it the third largest LNG exporter and possibly even the largest in the world before 2025. However, even such projections don’t eliminate the lurking challenges in the market.
“At the moment, what we’re seeing, particularly over in the U.S., is a lot of projects waiting for FID”, said KBR’s Senior Technical Advisor Dylan Perry. Right now there are 13 pending liquefied natural gas export projects in the U.S. waiting for confirmation from federal regulators. Although, they have recently laid out a timeline for permitting decisions, promising to streamline environmental reviews for complex projects. This means that the projects could get the go ahead as soon as the end of 2019, speeding up the final investment decisions.
Another challenge for LNG industry development, according to Mr Perry lies with pricing. “It’s not just competing against LNG. There are other opportunities for companies providing energy from other sources. So, you’ve got to be competitive across the board”, he explained to Wisdom Events at the Gas & LNG Middle East Summit in Oman.
It’s not only the U.S that is experiencing a successful turn of events when it comes to LNG. For the first time, Australia became the world’s biggest LNG exporter. It exceeded Qatar’s monthly production in November 2018 by shipping 6.8 million tons compared to Qatar’s 6.2 million tons of LNG. The achievement came due to the multiple Australian LNG terminals being completed in the past few years, allowing more flexibility and bigger export capacity.
New project development also comes with changing operating strategies around the world. “What we’re seeing now is the producers trying to grow the market and get more customers, diversify their customer base”, commented KBR’s Dylan Perry. “In terms of the supply chain, instead of just big cargoes, it’s splitting up into lots of different, smaller ways”, he explained.
Indeed, the small-scale LNG market, especially in Europe, is projected to reach the highest demand levels in the coming years. The report from Energias Market Research states that the European small-scale LNG demand will grow from 1,902.60 million Euros in 2020 to 5,818.75 million Euros by 2030.
Mr Perry attributes it to the growing popularity of bunkering fuel and heavy haulage transportation in Europe and other places. Looking to the future of the LNG industry, he predicts that “we’ll see a lot more diversity”, using the example of plans to ship LNG in ISO containers.
As the market, whether it be small or large-scale, goes from strength to strength around the world, there will be a lot more progress made with LNG industry development, bringing more challenges. How to overcome them and take advantage of the LNG boom? Get the answers from industry thought-leaders at the 2nd Gas & LNG Middle East Summit in Oman on 2-3 December.
Meanwhile, watch the full interview with Dylan Perry, Senior Technical Advisor at KBR, below: