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Wood Mackenzie reviews the LNG industry in 2014

Published by , Senior Editor
LNG Industry,


In its review of the LNG industry in 2014, Wood Mackenzie highlights that the industry is not short of surprises.

In the report, entitled ‘LNG: 2014 in Review’, Giles Farrer, Wood Mackenzie's Principal Analyst – Global LNG, said: "Production was up 5 million tpy to 246 million tpy and overall trade was boosted by higher levels of re-exports. But the big surprise was that Asian LNG demand was much lower than expected. Demand in emerging markets, like China, failed to grow to the extent anticipated and demand in the established South Korean market fell considerably."

Lower demand from Asia contributed to the fall in LNG spot prices last year, which fell from a peak of over US$20/million Btu in February to under US$10/mmbtu at the end of November.

The long awaited wave of new Pacific supply started to arrive in 2014, as PNG LNG began production in May, reaching full capacity from both trains in five months. However, as Wood Mackenzie’s report suggests, this was in marked contrast to Angola LNG, which was shut in May 2014 for extensive repairs, less than a year after starting up. Sonatrach also started production at the Arzew GL3Z train in October and BG shipped the first cargo from its Australian Queensland Curtis LNG (QCLNG) project at the start of this year.

Farrer said: "The big Final Investment Decision (FID) announcements all came in the second half of the year and were US focused." Cameron, Freeport (Trains 1 and 2) and Cove Point were all sanctioned after receiving their FERC authorisations. Cheniere also announced a string of new sales contracts from Corpus Christi - finishing the year with 8.5 million tpy contracted. In addition, the US changed its non FTA approval process in August, benefiting those projects that are more advanced with respect to their FERC filing.

Andrew Buckland, Principal Analyst - LNG Shipping for Wood Mackenzie, said: "A record number of new ship orders were placed in 2014 driven by the prospect of huge volumes of US exports. 67 orders were placed, despite falling charter rates, with DSME receiving the bulk of the business.

"Floating LNG activity has also grown, Petronas took FID on its second FLNG vessel in Malaysia in January and Golar signed a Heads of Agreement (HOA) on Christmas Eve with Perenco for a near shore project in Cameroon. Finally, use of Floating Storage and Regasification Units (FSRUs) boomed with new facilities installed in Brazil, Indonesia and Lithuania and vessels committed to projects in Pakistan, Egypt, Uruguay and Colombia."


Adapted from press release by

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/08012015/wood-mackenzie-reviews-lng-in-2014-020/

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