LNG import growth driven by Asia
Published by Callum O'Reilly,
Tanks and Terminals,
GIIGNL, the international association of LNG importers, has released its Annual Report on the state of the LNG industry.
In 2018, global LNG imports reached 313.8 million t, an increase of 23.9 million t or 8.3% compared with the previous year, the third largest annual increase behind 2010 and 2017.
Two new countries - Bangladesh and Panama - joined the importers’ ranks last year, bringing the total number of importing countries 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 in LNG imports, fostered by measures to improve air quality in China and by uncertainties regarding nuclear power in South Korea. In Europe, cross-basin arbitrage opportunities continued to determine the level of LNG inflows as the reduction of price spreads led to a strong rise of import activity in Northwest Europe towards the end of the year.
New LNG supply volumes were mostly driven by new production from Australia, the US and Russia (Yamal). Eight new onshore liquefaction trains were commissioned in these countries in 2018 and a floating liquefaction unit came online in Cameroon. The Pacific Basin remains the largest source of LNG supplies with 43.8% of the global market, followed by the Middle East and the Atlantic Basin. In 2019, the share of Atlantic Basin LNG supply in global trade is expected to continue to increase, as new liquefaction capacity is scheduled to come online in the US.
Spot and short-term volumes accounted for 99.3 million t in 2018. The share of spot and short-term volumes jumped to 32% compared with 27% in 2017. This expansion was supported by the ramp-up of flexible volumes from the US and Russia, and by the rise of LNG volumes handled by aggregators and traders who are able to optimise their portfolios allowing them to market volumes, in some cases purchased on a long-term basis, on a short-term or spot basis.
Jean-Marie Dauger, President of GIIGNL, said: “For LNG importers, long-term partnerships, destination and volume flexibility as well as the ability to optimise or arbitrage between Asian and European markets remain key […] In China, in India and South East Asia, in particular, LNG’s environmental benefits and its versatility make it particularly attractive as a destination fuel for thermal power generation and cogeneration, in the industrial and commercial sectors as well as in a growing variety of fields like marine and road transportation.
“Looking ahead, our industry is on the verge of profound change in terms of market structure. 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.”
Read the article online at: https://www.tanksterminals.com/terminals/01042019/lng-import-growth-driven-by-asia/
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