Douglas-Westwood: global LNG capex to hit USD 259 billion in next five years

The global capital expenditure (Capex) in the LNG industry will total nearly USD 259 billion from 2015 to 2019, according to a report by Douglas-Westwood.

This includes spending on baseload onshore and offshore liquefaction, LNG carriers, and LNG regasification at onshore and offshore fixed terminals, Douglas-Westwood said in its ‘World
LNG Market Forecast 2015–2019’.

Australasia and North America will be the main center of liquefaction development while Asia will lead in installed capacity of import terminals. North America is projected
to become a net exporter, transforming from the second largest import region over the past 5 years, to zero over the forecast period, according to the report.

Key exporting regions of Africa, Australasia, and the Middle East will account for 60% of the total forecast liquefaction capacity. A combined 479.4 MTPA is expected to be introduced globally over the forecast period.

From 2015 to 2019, Douglas-Westwood expects 178 MTPA of liquefaction capacity to come on stream with 15 expansion projects and 19 new developments. Associated costs for these terminals are expected to total USD 170 billion.

Capex for the forecast period represents an increase of more than 90% from the previous 5 years. This is largely driven by new projects in North America and Australasia and totals 71% of liquefaction capacity additions in the forecast period.

Investments in import facilities are expected to total nearly USD 66 billion, or a compound annual growth rate of 7%. The forecast Capex is expected to increase by 112% compared with the past 5 years, the report says.

The LNG carrier market is expected to show heavy spend throughout the forecast period, increasing by almost one-third. General confidence in the LNG market and the growth in the number of LNG terminals point toward a strong LNG shipbuilding market, according to the report.

With the anticipated demand, yard capacity at the major shipbuilders such as Daewoo, Samsung, and Mitsubishi may be constrained. Increasing participation of Chinese shipyards is expected in
the LNG shipbuilding sector should the demand for LNG carriers continue to grow, Douglas-Westwood added.

LNG World News Staff; Image: Chevron Australia