US to dominate LNG market through next decade
The ongoing development of shale gas resources in the US has spurred infrastructure construction for both natural gas processing capacity and LNG export terminals. New gas processing projects include the construction of multiple cryogenic and gas processing plants, NGL fractionators and multibillion-dollar pipeline infrastructure.
This abundance of natural gas has fueled an unprecedented surge in the construction of new LNG export capacity. In total, the US has announced more than 36 LNG export terminal projects. These projects represent more than 330 MMtpy of LNG export capacity at an investment of more than $200 B by 2030. Nearly 80% of the nation’s LNG export capacity projects are located along the US Gulf Coast.
Due to the global oversupply of LNG, it is highly unlikely that the majority of these projects will be completed. Regardless, the US is expected to become one of the largest LNG-exporting nations by 2020. By the early 2020s, the country will challenge Australia and Qatar to become the largest LNG exporter in the world. The US is scheduled to start operations on approximately 71 MMtpy of LNG export capacity by 2020 (Table 1). These projects constitute total CAPEX of approximately $50 B.
A second wave of US LNG export capacity could contribute an additional capacity of 30 MMtpy. These projects include LNG trains at Sabine Pass, Corpus Christi, Cameron and Freeport. Multiple LNG export projects are also expected to be built. It is imperative that these projects secure LNG offtake agreements to reach final investment decisions.
Nearly all of the US LNG projects under construction have secured customers for their LNG capacity. US LNG export volumes will vary in response to global demand and the difference between domestic and global natural gas prices. At present, LNG is traded under oil price-linked contracts. However, as the LNG market expands, contracts are expected to change, weakening their ties to oil prices.
As global LNG trade is forecast to increase substantially over the next 15 yr, so is the amount of LNG export capacity. The projects that secure offtake contracts quickly will be in better shape to obtain financing and build their facilities. Regardless, the US is quickly becoming one of the leading nations in the LNG industry. GP
Indonesia, home to 260 MM people on 14,000 islands across a vast archipelago, is estimated to become the seventh-largest economy in the world by 2030, with such growth expected to boost the nation’s energy consumption by 80% from present levels.<sup>1</sup>
At October’s HPI Forecast Breakfast for our sister publication, <i>Hydrocarbon Processing</i>, I shared <i>Gas Processing</i>’s forecast on change in the LNG industry.
In one of the toughest markets in the history of gas compression, we are challenged to deliver more with less.
The New LNG Imperative
The shale gas boom established the US as the world’s leading natural gas producer and is responsible for billions of dollars of investments in the US gas processing industry. Since 2012, the US has witnessed unprecedented growth in new gas processing capacity and infrastructure. This rise is due to greater production of domestic shale gas, which is providing cheap, available feedstock to fuel the domestic gas processing, LNG and petrochemical industries. New gas processing projects include the construction of billions of cubic feet per day of new cryogenic and gas processing capacity, NGL fractionators, multi-billion-dollar pipeline infrastructure projects, and the development of millions of tons per year of new LNG export terminal construction. Attend this webcast to hear from Lee Nichols, Editor/Associate Publisher, Hydrocarbon Processing, Scott Allgood, Director-Data Services, Energy Web Atlas and Peregrine Bush, Senior Cartographic Editor, Petroleum Economist as they discuss the future of LNG and the application of Energy Web Atlas, a web-based GIS platform which allows users to track real-time information for every LNG project.
November 29, 2017 10am CST
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