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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.
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.