Qatargas Chief Executive Officer, Khalid Bin Khalifa Al Thani presented Qatargas’ views on the global LNG market fundamentals at the Monthly Gas Lecture organized last week by the Gas Exporting Countries Forum at the GECF Secretariat headquarters in Doha.
The Qatargas CEO began his speech explaining Qatargas’ view on the global LNG market. Qatar delivers LNG to 26 out of a total of 29 LNG importing countries, accounting for 33% of the world’s LNG supply. The bulk of these supplies are to Asia, which holds 75% of total LNG demand.
The number of LNG importing countries in Latin America has doubled, from only three in 2007 to six in 2013 and is expected to reach nine by 2016.
“Even though the gas demand forecast in Latin America is relatively high, long-term volumes of LNG will have to compete with domestic and piped gas. Additionally, these markets will most likely be supplied by North American LNG volumes from upcoming new regional projects,” he said.
The LNG demand in Europe has been reduced by the Great Recession, Asia’s strong pull on flexible cargoes, cheap US coal imports and government subsidized renewable energy sources. However, Sheikh Khalid expressed his optimism regarding the resurgence of Europe’s LNG demand as its economy strengthens.
“Europe’s long-term LNG demand will rebound as its economy improves; indigenous gas declines; supply source diversity becomes critical and gas is required to support intermittent renewable energy needed to meet environmental targets. We believe deliveries will approach 100 million tons per annum (MTPA) by 2025,” he said.
The LNG demand in the Asia Pacific region, the world’s biggest LNG market, has almost doubled since 2005 and is expected to reach 320 MTPA by 2025. Although China and India will experience strong LNG demand, the major area of LNG growth will come from South East Asia, a region which had not imported LNG until just three years ago.
Global LNG demand is expected to double in ten years’ time, with 400 MTPA of proposed additional volumes to come online by 2025. However, a significant portion of these new projects will be delayed or cancelled due to the various challenges involved in bringing new supply on-stream. Even if an optimistic view is taken on the number of LNG projects that will go to completion, the LNG market will continue to be tight in the short and medium term as demand growth outpaces supply.
[mappress] Press Release, May 29, 2014