In the LNG industry, it is fair to say that the major exporting nations dominate the headlines.
Indeed, over the last few months, much has been made of Australia's battle with Qatar for the number one spot in terms of LNG exports worldwide. But while the heavyweights slug it out, island nations and other developing countries are slowly building their economies, demanding increasing volumes of LNG.
Register for free »
Get started now for absolutely FREE, no credit card required.
As Bernadette Cullinane and Nye Hill of Deloitte state in their article on page 12, "Increased supply competition, the emergence of a liquid, globally traded spot market, the shift towards short-term, flexible contracts, the advent of low capital-intensity gas import technology and low carbon energy policies, have all helped to unlock a new customer dynamic for LNG."
It is not surprising then, that emerging markets, such as countries in Africa, Southeast Asia and Central America, are slowly making their way onto the front pages.
For instance, just last month, Chart Industries signed a memorandum of understanding (MoU) with Energy Capital Vietnam (ECV) to promote the distribution of LNG within Vietnam, with Chart supplying the downstream equipment for ECV's terminal projects. According to the statement released by Chart, Vietnam's total LNG demand is estimated to reach 10 million tpy by 2030, and much of this is expected to be met by US exports.1
It is clear, therefore, that the development of these emerging markets is not happening in an isolated bubble. Rather, increasing demand is helping to build the LNG market worldwide, with US exporters -- among others -- happy to be of service. The increasingly low cost of import technologies, such as floating storage and regasification units (FSRUs), is also helping emerging markets to import LNG. As Cullinane and Hill state in their article: "Half of the feasibility stage FSRUs are in Asia -- a clear indicator of where customer demand is concentrated."
Clearly, with shorter construction times and lower CAPEX, FSRUs are playing a pivotal role in the development of emerging markets. With a number of key gas fields starting to deplete, such facilities will only grow in importance for emerging markets.
For instance, Excelerate Energy recently announced that it has received notice to proceed (NTP) from the Philippine Department of Energy (DOE) to develop a floating LNG import terminal in the Bay of Batangas per the DOE's guidelines for 'Rules and Regulation Governing the Philippine Natural Gas Industry'.
The Luzon LNG project will reportedly provide natural gas, sourced from LNG, to existing and new gas-fired power plants in the region that provide electricity to Luzon, including the area of Metro Manila. Excelerate claims that this gas supply will augment the existing gas production from the domestic Malampaya fields, as reserves from these fields start to deplete.2
Whilst the US, Qatar and Australia will continue to be the focus of the industry, the combined impact of these growing, emerging markets should not be underestimated. It will certainly be interesting to see the effect that these markets will have on the global LNG industry.
We hope you enjoy this latest issue of LNG Industry magazine. Please feel free to pick up a copy at the 20th CWC World LNG Summit & Awards Evening.
- 'Chart Industries, Inc. and Energy Capital Vietnam (ECV) to jointly promote LNG distribution within Vietnam', (24 October 2019), https://www.globenewswire.com/news-release/2019/10/24/1934715/0/en/Chart-Industries-Inc-and-Energy-Capital-Vietnam-ECV-to-jointly-promote-LNG-distribution-within-Vietnam.html
- 'Excelerate Energy Receives Notice to Proceed from the Philippines for Floating LNG Terminal', (26 September 2019), https://www.prnewswire.com/news-releases/excelerate-energy-receives-notice-to-proceed-from-the-philippines-for-floating-lng-terminal-300926019.html