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The International Gas Union's (IGU) recent report on world LNG markets found that the trade increased by only 1.4 mt to 356.1 mt compared to 2019 supported by increased exports from the US and Australia, together adding 13.4 mt of exports. Asia Pacific and Asia again imported the most volumes in 2020, together accounting for more than 70% of global LNG imports. Asia also accounted for the largest growth in imports in 2020--adding 9.5 mt of net LNG imports vs. 2019. While 20 mtpa in liquefaction capacity was brought on stream in 2020, all in the US, startup of several liquefaction trains in Russia, Indonesia, the US, and Malaysia were delayed as a result of the pandemic, according to the report. The only project that was sanctioned in 2020 was the 3.25-mtpa Energia Costa Azul facility in Mexico, and in early 2021 Qatar took final investment decision (FID) on four expansion trains totaling 32 mtpa.
Shell expects global liquefied natural gas (LNG) demand to reach 700 million tonnes by 2040, with Asia responsible for three-fourths of the forecast demand growth according to the major's latest annual LNG Outlook. For instance, China's heavy-duty transport sector consumed nearly 13 million tonnes of LNG in 2020, almost doubling from 2018, to serve the fast-growing fleet of well over 500,000 LNG-fueled trucks and buses. LNG-fueled shipping is also growing, with the number of vessels expected to more than double and global LNG bunkering vessels set to reach 45 by 2023. The study found global LNG trade increased to 360 million tonnes in 2020, despite volatility caused by the COVID-19 pandemic which resulted in lockdowns around the world. Demand in 2019 stood at 358 million tonnes.
Alan Armstrong is the president and chief executive of Williams. Now more than a century old, Williams focuses on energy infrastructure, most notably natural gas and natural gas liquids gathering, processing, transportation, and storage services. Armstrong became the president and CEO of Williams in 2011. Under his leadership, the company expanded its reach, currently touching about 30 % of all US natural gas volumes. Before being named CEO, Armstrong led the company's North American midstream and olefins businesses as senior vice president–midstream.
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The North American natural gas market is characterized by net north-to-south flows: Net Canadian exports supply about 16 percent of U.S. natural gas consumption and U.S. exports to Mexico meet about 18 percent of Mexican natural gas requirements. The first decade of natural gas futures trading on the New York Mercantile Exchange (1990-2000) was characterized by ample supply, as reflected in futures prices that more often closed below $2.00/MMBtu than above $3.00/MMBtu. This relative calm was shattered in the winter of 2000-2001, when natural gas futures prices spiked to $10.00/MMBtu, though they returned to historical levels as abruptly than they'd skyrocketed. However, historically high prices since the second price run-up (peaking in March 2003) have left many wondering if North American natural gas markets have undergone a paradigm shift, with the twelve-month futures strip now averaging $5.50-$6.50/MMBtu.
With landed LNG costs in North America estimated at $2.50-$3.50/MMBtu, many see LNG as the cure-all for the North American natural gas market. LNG imports, which currently comprise under 2 percent of North American natural gas consumption, could make up for increasing decline rates, higher drilling costs, and increasingly remote production areas. About three dozen new LNG import terminals have been proposed in North America, though estimates of how many will actually get built range from 5 to 12. A dozen new terminals could increase North American LNG imports to as much as 15 percent of total consumption, resulting in significant competition for global LNG supplies. The potential impacts of such aggressive growth in LNG imports into North America (if such growth is even feasible) on both global LNG markets and the North American natural gas market will be presented in the context of existing market, regulatory, and geopolitical constraints.
The purpose of this paper is twofold. First, it will assess the potential for aggressive growth in LNG imports into the North America natural gas market, as currently forecast by many parties. Second, it will also assess the impacts of such growth both on global LNG markets and on the North American natural gas market within the context of existing market, regulatory, and geopolitical constraints.
Characteristics of the North American Natural Gas Market
The North American natural gas market is characterized by net north-to-south flows, as shown in Graph 1 (below): Net Canadian imports supply about 15 percent of total U.S. natural gas consumption and the U.S. exports about 2 percent of its total natural gas production to Mexico, meeting about 18 percent of total Mexican natural gas requirements in 2004.
(Figure in full paper)
LNG imports into the U.S. through the four terminals existing in 2004 supplied almost 3 percent of total U.S. natural gas consumption. LNG imports into the U.S. began through those same four terminals in the 1970s during regulatory-induced natural gas “shortages.
Abstract A naturally occurring fossil fuel of light hydrocarbons, natural gas has become an important industrial input, propelling economic growth and development in both industrialized and developing countries. The global demand for natural gas has been accompanied by a booming business in the marketing of Liquefied Natural Gas (LNG), particularly in the last decade. Driven by the need to commercialize the nation's huge gas reserves, as well as the imperative to reduce its dependence on crude oil, the Federal Government decided in 1995 to revive the Nigeria LNG project, as a vehicle to facilitate the nation's entry into the global LNG market Nigeria LNG accomplished its first shipment of LNG cargoes to the world market in October 1999, ushering in a new era in the country's long-standing drive to diversify its export revenue. However, the actualization of LNG projects in Nigeria is not without challenges. Constraints include funding difficulties, particularly on the part of the Federal Government. Among other challenges, there is need for an enabling environment necessary to inspire investors' confidence, a precondition for the attraction of crucial foreign investment into the industry. Therefore this paper provides a strategic policy framework promoting liberalization of the nation's gas industry. It also prescribes economic and administrative incentives needed to propel Nigeria's nascent LNG Industry towards a dynamic performance and to becoming a regional force in the global LNG market 1.0 Natural Gas Profile: A Global Overview The world is endowed with enormous, although finite natural gas resources. Estimates of its size continue to grow in recent times, spurred by innovations in exploration and extraction techniques (UNCTAD, 2004). Indications are, however, that natural gas resources are widely and bountifully distributed around the world, with a significant proportion of the resource yet to be discovered. The Middle East is the region with the lion share of the world's natural gas reserves, with 40% of global endowment. This position is followed by the Russian Federation, with 27% of the total. The former Soviet Union along with Eastern Europe is credited with the World's second largest natural gas reserves, with 38% of the World's total.
With natural gas reserves located at some distance from natural gas markets, the global LNG industry has seen rapid changes in the last decade. Natural gas imports in the US are shifting from pipeline imports to LNG imports in order to meet increasing demand. This shift in import strategy will require the construction of new LNG import terminals and regasification facilities. This paper also discusses the Energy Bridge, concept combining an LNG regassification vessel with a submerged offloading buoy. This concept combines proven technologies to provide a reliable alternative to onshore LNG receiving terminals. Gulf Gateway, located in West Cameron Block 603, is the first Energy Bridge licensed under the Deepwater Port Act. It is presently under construction and due to commence operations in January 2005 in West Cameron Block 603. Details on this facility are provided.