Skip to main content

A maturing market

Published by
LNG Industry,

The oil and gas industry is volatile and new technology and market developments play a big role in shaping this industry. The LNG industry is an example, where market developments have boosted the growth of LNG. Strong economic growth in the Asia-Pacific region has stimulated high gas demand. This, coupled with domestic reserves available, generates the need for international gas trade. The key regions contributing to this demand are Japan, China and India.

The Fukushima disaster in 2011 led to a shutdown of 50 nuclear power plants in Japan. Nuclear energy accounted for 30% of the country’s total electricity production, and the shutdown of nuclear plants triggered steep gas requirements for power generation. In 2014, approximately 70% of gas was consumed by the power sector.

In China and India, along with the economic growth, the switch to cleaner fuels is one of the drivers for high gas demand. Europe’s reliance on LNG has increased in the past two years as it diversifies its gas supply source, other than Russia’s piped gas imports. There has been a steady increase in the percentage of LNG trade as the global gas consumption increases.

Qatar has controlled the world’s LNG supply market, but supply options from the US and Australia have started to change this trend. Technological advancements, such as hydraulic fracturing, have resulted in significant gas production from the shale gas reserves in the US. This is a game changer as the US will be able to fulfill its own gas requirements, and also become a net gas exporter. Furthermore, Australia has seven new LNG projects under construction that are expected to start operations between 2016 and 2018. With a surge in LNG exports, Australia is likely to overtake Qatar as the world’s largest LNG supplier by 2018.

All of these factors have changed the dynamics of the global LNG trade in the 2009 – 2013 timeframe. However, the oil price crash in the last quarter of 2014 has created uncertainty for the future LNG market.

Asia-Pacific LNG demand

In the Asia-Pacific region, the adoption of cleaner and cheaper fuels has stimulated gas demand. In particular, the burgeoning economies of China and India have boosted gas consumption in both countries. In order to curtail its carbon gas emissions, the Chinese government has encouraged the use of cleaner fuels. In India, the growth of the power and fertiliser sectors is driving the demand for gas. In addition, a decline in domestic gas production in both of these countries has led…..

This article was originally published in the November/December ossie of LNG Industry. To read the full version of the article, sign in or register for a free trial subscription.

Written by Rasholeen Nakra, Frost & Sullivan, Canada. Edited by

Read the article online at:


Embed article link: (copy the HTML code below):