Global LNG investments are increasing, but more will be needed, according to the International Energy Agency's (IEA) latest "Gas 2019" report. The report showed that investment in LNG export projects rebounded in 2018 after several years of decline.
The IEA said that more investment in liquefaction will be necessary, as spare capacity margins will otherwise shrink after 2020 and could lead to a tighter market. "Final investment decisions are due to be announced for a large number of projects in 2019 that could together increase export capacity by almost 150 bcm per year. This includes a second wave of the U.S. projects, Qatar’s expansion and projects in Russia and Mozambique," the IEA stressed.
It noted that recent investment decisions highlighted an evolution in LNG financing models. Several projects - LNG Canada, Tortue LNG and Golden Pass LNG - went ahead without the support of long-term contracts.
The IEA said that global oil majors and utilities are using their own balance sheets to finance the investments and add the volumes to their supply portfolios, creating an alternative to traditional development approach of using project finance. "More ships are needed for LNG, and more LNG for ships. The recent volatility in rates for charter vessels prompted orders for new LNG carriers. However, additional orders will be needed to keep the LNG shipping market balanced beyond 2022," it underlined.
The agency said that LNG is expected to emerge as a fast-growing fuel for marine traffic, supported by stricter maritime rules on sulphur content starting in January 2020 and infrastructure developments in major ports around the world. But LNG for shipping will remain a niche market in the medium term.
In the global energy market, trade in the form of LNG rose by 72.6% over the last decade to 431 bcm. In 2018, 805 bcm of natural gas traded through pipelines. The share of pipelines in the global natural gas trade in the global market was 65%, while the share of LNG was 35% in 2018. In the LNG trade of 431 bcm in total, Qatar made the most exports with 104.8 bcm. The highest amount of LNG imports came from Japan with 113 bcm.
(Anadolu Agency)
