|Theme||Visible||Selectable||Appearance||Zoom Range (now: 0)|
Before the global economic downturn crashed the energy industry, the liquefied natural gas (LNG) market was prospering across the entire value chain, according to a recent report issued by the International Gas Union (IGU). Last year record low gas prices driven by increasing natural gas production, new export terminals, and weak Asian demand, resulted in the LNG industry's sixth consecutive year of growth. That is, until the bottom fell out on global LNG benchmark prices due to oversupply brought on by COVID-19, starting in March 2020. And while the report depicted a flourishing industry poised for continued growth, it must be read from the perspective of today's dismal downturn, just a few months after the rosy picture was painted. So what's a producer to do? Research group Rystad Energy said that with relatively little arbitrage between feed-gas prices and their target customers' benchmarks, it appears the most economic option for them will be to ramp down production. "Shutting a terminal would be considered the absolute last resort for a cash-strapped LNG producer, and is a move that would only be undertaken if prices were not expected to become profitable for a long period," Rystad said in its analysis.
Abstract LNG shipments are nothing new in the face of technology. The first tanker shipment of LNG took place from Lake Charles, LA bound for Canvey Island in the UK in 1958 aboard the experimental vessel, the Methane Pioneer. So, why do people focus on this subject so much since mid 2000's? One of the key factors is technology, that reduced costs of LNG trades. More and more countries see that as a chance to diversify their imports. In 2023 Poland wants to cover over 35% of annual consumption with 7,5 bln cubic meters in LNG shipments. With this strategy there is a big chance for Poland to stop being dependent to Russia in 2023. Main forces that drive the interest for LNG shipments are: The growing concern for traditional supplies in the face of growing consumption, The effects of technology on cost reduction making previously uneconomic trades attractive, Environmental concerns, in some countries gas will replace coal in energy mix, Increasing liquidity in the global gas market, LNG trade gives new opportunities for both seller and buyer. It enables importing markets to shift trading directions thus gain energy independence as well as avoid supply shortages. Liberalization of market - influencing changes in contracts align with spot transactions drain the prices, making LNG even more attractive. On the other hand, the sellers experience completely new trading opportunities. Companies are able to engage in markets that were previously unavailable and escape adverse stockpile abundance. Aim of the research is to identify major trends in LNG industry. Forecast main course and future role of LNG and natural gas in the energy mix. Model global supply and demand 2020 - 2030. Analysis also covers incoming investments and check their potential. Research based on the available resources from GLE investment database and similar resources from other regions. Data broaden by other documents from energy companies and local statistic ministries. Model with trusted available data adjusted by current news and energy trends in Europe and in global gas industry. LNG market is expected to grow at around 1.3% annually. Global demand could increase from its current level of about 406 million tons per annum to 430 MTPA in 2025. For now natural gas is supported by policies to reduce air pollution and greenhouse gas emission and it will partly replace coal in energy mix in European countries. Today's challenge is to create liberal gas market and LNG is the answer on how to connect american, arab and european gas markets.
Abstract Since 1995, the global LNG industry has mounted a recovery of vitality and energy few in the 1980s thought likely. Improvements in technology that lowered its incremental production, transportation, and regasification costs combined with resurgence in worldwide natural gas demand and price to force LNG into the energy limelight as never before. This paper presents an overview of global LNG capacities—production, shipping, and regasification—as of Jan. 1, 2008. It will also review world LNG markets, look at individual regions and projects, and conclude with a view of near and mid-term industry issues. 1. Introduction The nature of natural gas as a fuel restricted it to regional use throughout most of the last half of the 20th Century. Limited means of moving gas conspired with small and scattered world markets to keep the fuel cheap and often, where produced, flared as a nuisance. Even with advent of larger and longer regional, and sometimes interregional pipelines, natural gas use remained geographically constrained. Mostly in Asia and mainly due to steady growth of Japanese and Korean demand did LNG grow over the last 30 years of the 20th Century. By the end of the 20th Century, however, it had become clear to the global natural gas industry that the technical means for moving natural gas in its cryogenic state—liquefied, that is—held the potential for circumventing regional and global geographic barriers. Demand in the 1990s, pushed by public recognition of gas as a more environmentally benign fuel than oil or coal, helped force up the incremental value of natural gas (per million cubic feet/day, MMcfd; or million cubic meters). These two forces—demand and price—then combined to revive the LNG industry outside Asia from the stagnation it had largely fallen into in the late 1980s after a brief surge in the 1970s. By the late 1990s, moving supplies of natural gas as LNG from such formerly stranded areas as off Western Australia, Qatar, and West Africa to markets many miles distant over oceans and seas became not only possible but also economical. By the first decade of the 21st Century, nations with large reserves of natural gas were pushing to develop liquefaction projects, setting off waves of shipbuilding and of plans for regasification projects in market areas. This paper presents an overview of global LNG capacities—production, transportation, and regasification—as of Jan. 1, 2008. It will also review world LNG markets, look at individual regions and projects, and conclude with a view of industry issues. 2. Markets The promise of global LNG is the promise of minimal or no market-specific or geographic barriers to trade, a vision that is unlikely ever to be realized. From the beginning, long-term contracts of generally 20 years dominated and continue to characterize most commercial arrangements. But pricing references differ for Asia-Pacific, Europe, and North America. Each of these regional markets has its own pricing mechanism that reflects and reinforces geographic barriers among them. These commercial differences combined with regional concentrations of end users and with the nature of natural gas will likely prevent the kind of global fungibility found in crude oil and its products.
LNG has emerged as an important element to the international trade in natural gas. It is currently the only commercially available technology for transporting natural gas over open waters. Although the industry requires expensive transfer and storage facilities, LNG has found ready markets in Europe, Japan, and the U.S., and is projected to grow over the next ten years as new projects and markets are developed.
This paper will examine the underpinnings of the evolutionary changes that the global LNG market has been experiencing over the past few years. It is clear that the fundamentals of the industry have shifted from their previous position and this paper will trace the developments that are taking place as the industry strives to find a new position in the global energy matrix.
The paper will also pay special attention to the shifting bases that demarcate the very exciting Atlantic Basin LNG market. This particular segment of the LNG business has emerged as a driver for much of the market changes being currently experienced and forecast activity in this geographical location is significant enough to the global business to demand special emphasis.
Natural gas is the world's fastest growing fuel. It is available in commercial quantities in many countries of the world. Proven reserves of gas are sufficient to cope with anticipated increases in demand for at least from the present period till 2030. It also accounts for almost a quarter of the world's commercial energy needs.
The worldwide community consumes about 90 trillion cubic feet (Tcf) of natural gas each year. Fortunately, natural gas is a resource found in significant volumes throughout the globe. According to the BP statistics, in 2003 the world's proven natural gas reserves were estimated at about 6,200 trillion cubic feet (Tcf), roughly 67 times the volume of gas consumed in that year and clear evidence that despite the world's appetite for natural gas, exploration and development efforts have more than met demand. Countries having large natural gas reserves and relatively low domestic gas consumption generally seek to monetize their gas resource via conversion to more easily transported products such as petrochemicals, or develop gas export schemes. Regarding the latter, if there are no high value gas markets within a reasonable pipeline distance, then liquefaction of natural gas becomes one option for achieving this goal.
Natural gas is set to have a far reaching influence on the world economy because it has become obvious that gas is the fuel of the 21st century, just as coal powered the 19th and oil fuelled the growth of the 20th century.
Asia has been the cornerstone demand center that spawned the large-scale development of liquefied natural gas (LNG). Natural gas supply in Asia has been limited by the distance of these gas-utilizing markets from major sources of gas. Long-distance pipelines to Asia were not practical or economical and this led to the emergence of LNG as the obvious, though expensive, option.
An anticipated acceleration in LNG's commoditization, driven by factors such as increased natural gas demand and newfound confidence in its potential as a marine fuel and as the cleanest of the fossil fuels, having lower emissions than either coal or oil fired power generation is expected to hand it a much larger role in global energy markets. The deployment floating liquefied natural gas (FLNG) facilities, becomes increasingly important as an option to achieve this task rather than an onshore facility. Jettyless LNG transfer concept could cut total project cost by 50%.
Recent policies in Europe have encouraged the use of renewables, with gas being the obvious complementary source of energy for power generation when these intermittent sources need backup power. A supply chain is the network of LNG from the upstream to the downstream called a distribution channel have three main flows which are the product, information and the finances flow. FLNG is an emerging technology for such fast and cost effective development of technology to unlock smaller, remote or environmentally sensitive fields. LNG Monetization will be thoroughly examined. FLNG however present some novel challenges less on the technical side and more to do with the supply chain, project management, stakeholder engagement, financing, regulation and tax. Understanding regulatory, legal, financing tax issues and engaging with the relevant stakeholders well ahead of investment decisions are keys. Flexibility is also being introduced in LNG Import Terminals, which have the potential to serve as a LNG Hub where LNG is received in bulk volumes from an LNG carrier and is then distributed out through gas pipeline. This solution is applicable when the visiting LNG carrier is connected to the onshore storage without a jetty. This solution enables small-scale LNG transfers to the LNG storage on shore or to the landlocked Floating Storage and Regasification Units. The international natural gas sector was geographically divided into distinct regional markets. The US and Europe supplied mainly by pipelines and Asia supplied by LNG. For all regions, there is a striking difference between the geopolitical context of international pipeline gas business and LNG which will be detailed in this work. The FSRU is lower in cost and can be reused while the land based terminals cannot be relocated. Geopolitics is a central concern for the oil and gas sector and can be viewed as a source of both risk and opportunity as identified by EY. Collaboration in adding values to the LNG business measured by total revenue will be examined in the work.