John Snyder discusses the statistics highlighting the phenomenal growth of the LNG market over the last two decades
This week, I came across a treasure trove of fascinating statistics on the LNG market, and one that jumped out at me shows, in volumetric terms, the phenomenal growth of the market over the last two decades.
In 2018, the LNG market continued to grow at a rate of 8.3% year-on-year, with the global LNG trade hitting 313.8 tonnes last year – tripling the volume of trade undertaken in 2000.
Here is a summary of what I took away from my review of the Annual Report 2019 by the International Group of LNG Importers (GIIGNL).
Growing supply side
Among the significant milestones documented is the growing liquefaction capacity from Australia, Russia and the US. Eight new onshore liquefaction trains were commissioned in 2018, seven of them in the three countries. Australia added capacity with Wheatstone Train 1 and Ichthys Train 1 & 2, the United States with Sabine Pass Train 5, Cove Point and Corpus Christi Train 1 and Russia commissioned Yamal Train 2 & 3. Cameroon also became a first-time exporter of LNG, opening the Hilli Episeyo FLNG.
LNG importers
As the report points out, the number of LNG importing countries continues to grow, with last year’s new entrants, Bangladesh and Panama, raising the number to 42. Just 10 years ago, the number was 18.
Asia continued to drive global demand for LNG, accounting for 76% of imports. Governmental policies regarding air quality in China continued to propel the country’s LNG imports. Asian LNG imports grew by 13% to 238.6M tonnes. Japan remained the leading importing country, with 82.5M tonnes or a 26.3% market share, followed by China (54M tonnes). As was the case in 2017, global LNG import growth in 2018 was led by China and South Korea, the world’s second and third largest LNG importers, which together received 21M tonnes more LNG than in 2017.
China’s blue skies policy of substituting coal-fired power plants for gas-fired ones to reduce air pollution in major cities and to complement domestic gas production, meant that it consolidated its position as second largest LNG importer globally and increased LNG demand by 15M tonnes or 38.4% compared with 2017. From 2016 to 2018, Chinese LNG imports have doubled. South Korea also recorded a sharp increase in LNG imports (16.2%) as a result of nuclear power plants being off-line for maintenance and restrictions on using older coal-fired plants to improve air quality.
Europe’s LNG imports climb
In Europe, net LNG imports were up by 2.9M tonnes (6.4%) reaching 48.9M tonnes. Imports into Belgium (1.0M tonnes) and the Netherlands (1.3M tonnes) rose strongly due to the decline in domestic production in the Netherlands and to the narrowing price differentials between northwest Europe and Asia. On the contrary, LNG volumes imported into Spain decreased (1.4M tonnes) partly due to stronger pipeline imports. With 8.3M tonnes of imports in 2018, Turkey is now Europe’s second largest LNG importer behind Spain (10.8M tonnes).
LNG carrier fleet reviewed
The shipping section of the GIIGNL annual report documents that there is an LNG tanker fleet of 563 vessels, including 33 FSRUs and 44 vessels of less than 50,000 m3. Total cargo capacity at the end of 2018 stood at 83.1M m3, with aggregate operational capacity at 79.6M m3.
Average spot charter rates for a 160,000 m3 LNG carrier, nearly doubled year-on-year, surging to US$88,692/day, compared to an average US$46,058/day in 2017.
Shipbuilders were rather busy, too, delivering 57 vessels while signing contracts for 77 units, including two FSRUs and 10 vessels of less than 50,000 m3, compared with 19 new orders placed in 2017. The LNG carrier orderbook consisted of 138 units at the end of 2018 or about 25% of the LNG carrier fleet, with 46 of these vessels scheduled for delivery in 2019.
You could also gather from the report that 70% of the fleet uses membrane cargo containment systems and 219 vessels or roughly 39% of the LNGC fleet falls into the 90,000-150,000 m3 capacity range.
2018 LNG importers, by region
Country LNG (M tonnes) Global share
Japan 82.46 26.3%
China 54.00 17.2%
South Korea 43.95 14.0%
India 22.42 7.1%
Taiwan 16.81 5.4%
Pakistan 6.86 2.2%
Thailand 4.44 1.4%
Indonesia 3.00 1.0%
Singapore 2.56 0.8%
Malaysia 1.40 0.4%
Bangladesh 0.67 0.2%
ASIA 238.56 76.0%
Mexico 4.98 1.6%
Chile 3.06 1.0%
Argentina 2.59 0.8%
Brazil 1.86 0.6%
US 1.65 0.5%
Puerto Rico 1.13 0.4%
Dom Rep 0.91 0.3%
Canada 0.41 0.1%
Columbia 0.25 0.1%
Jamaica 0.20 0.1%
Panama 0.16 0.0%
AMERICAS 17.22 5.5%
Spain 10.75 3.4%
Turkey 8.30 2.6%
France 7.84 2.5%
Italy 6.08 1.9%
UK 4.95 1.6%
Portugal 2.85 0.9%
Netherlands 2.02 0.6%
Poland 1.99 0.6%
Belgium 1.90 0.6%
Greece 0.92 0.3%
Lithuania 0.60 0.2%
Malta 0.28 0.1%
Sweden 0.25 0.1%
Norway 0.12 0.0%
Finland 0.07 0.0%
EUROPE 48.91 15.6%
Kuwait 3.39 1.1%
Jordan 2.49 0.8%
Egypt 1.93 0.6%
UAE 0.77 0.2%
Israel 0.55 0.2%
MIDDLE EAST
& AFRICA 9.12 2.9%
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