Global LNG trade in 2016 reached a record 258 million mt, up 5% from
2015, according to the International Gas Union's 2017 World LNG Report
LNG trade expanded by an average of only 0.5% a year over the previous
four years, the IGU said.
Short- and medium-term LNG trade grew by only 0.56% in 2016 to 72.3
million mt, accounting for 28% of total trade.
The report said: "the share of LNG traded without a long-term contract as
a percentage of the global market has tapered off since 2013. Short and
medium-term trade, as a share of total traded LNG, fell by 4%."
This reflects partly the existence of long-term contracts for the new LNG
capacity that has come on stream in the last 12 months, as well as the spike
caused in short- and medium-term LNG trade in the aftermath of the 2011
Fukushima nuclear disaster in Japan and the later onset of drought conditions
in Latin America.
The increase in overall LNG trade can be attributed to a significant rise
in new supply, said the IGU, owing to the start of exports from the US Gulf of
Mexico and Australia Pacific LNG, among other projects.
The report also notes significant rises in demand, most notably from
Asian markets; China's LNG consumption rose by roughly 35% to 27 million mt in
2016, the report said.
However, it also notes that some markets, including Japan and South Korea
as the two largest, may have passed peak LNG demand as other forms of energy
come to the fore.
A resurgence in hydropower in Brazil reduced demand for LNG there by 80%,
Total liquefaction capacity was put at 339.7 million mt/year in 2016, an
addition of 35 million mt. The IGU estimates that 114.6 million mt of new
capacity was under construction as of January 2017, indicating LNG supply will
continue to rise rapidly in coming years.
However, the capacity of projects entering the construction pipeline have
slowed. Two projects entered the construction phase of development in 2016: a
brownfield expansion of Tangguh LNG (3.8 million mt/year) in Indonesia, and an
additional US project, Elba Island LNG (2.5 million mt/year).
The report estimates proposed LNG capacity at 879 million mt, down from
890 million mt in January 2016, noting that there is insufficient demand for
most of these projects to go ahead.
Global regasification capacity was put at 794.6 million mt/year as of
January 2017, up from 776.8 million mt/year in January 2016, added mainly in
In contrast, 2016 mainly saw the addition of new gasification capacity in
new markets, such as Egypt, Jordan and Pakistan.
Floating facilities account for 83 million mt/year of regasification
capacity globally, the IGU said.
--Ross McCracken, email@example.com
--Edited by Alisdair Bowles, firstname.lastname@example.org