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Cedigaz releases first estimates on the global LNG trade in 2015

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LNG Industry,

Cedigaz has released a statement claiming that, according to its first estimates, LNG imports grew by 2.1% in 2015 to 241.2 million t. The company cites a number of reasons, including the following: the reversal of growth trends in Europe and Asia; Middle East North Africa (MENA) countries’ emerging role as importers; and the growth of intra-basin and intraregional trade because of the convergence of global prices.

Specifically, the Cedigaz estimates that Asian LNG net import decreased by 2.8% to 172.8 million t. Weather related factors, gas-fuel competitiveness and economic growth slowdown are all thought to be the major contributors to this decline. South Korea and Japan were the cause of the majority of the decline, with South Korea’s imports falling to 33.4 million t and Japan’s to 85 million t. Chinese demand also fell by 0.9% to 19.7 million t. Nevertheless, imports did increase in Thailand, Taiwan and Pakistan.

In Europe, meanwhile, Cedigaz estimates that LNG imports increased by 10.2% in 2015 to 37 million t. This follows three years of decline. Cedigaz claims that imports increased everywhere in Europe, apart from France (where net imports decreased to 4.3 million t) and Greece (where imports remained level at approximately 0.4 million t). For instance, LNG imports increased in the Iberian peninsula, Spain, because a hot summer led to increased usage of air conditioning, and, therefore, increased demand from the power sector. In addition to this, droughts reduced the availability of hydropower. Northwest Europe also saw an increase in LNG net imports, as large portfolio owners, such as Qatar, diverted their LNG in order to limit Asian oversupply. The South Hook terminal in the UK received an increase in net imports by approximately 20%, leading to a growth in net imports to 9.4 million t. Net LNG imports grew in Belgium to 2 million t and in the Netherlands to 0.7 million t.

Cedigaz states that, in 2014, the five MENA countries that import LNG, imported 4.1 million t. In 2015, the same countries imported almost 10 million t. Egpyt and Jordan played a role in this as new importers, importing 2.7 million t and 1.7 million t, respectively using floating storage and regasification units (FSRUs). Dubai and Kuwait also played a role, with their imports increased by 61% and 20%, respectively.

Regarding North America, Cedigaz notes that LNG imports decreased by 5.1% to 9.2 million t. It states that the decrease was largely a result of Mexico, where a 44.7% increase in pipeline imports from the US to 31.6 billion m3 led to a 20.8% decrease imports. LNG net imports increased in the US by 48.5% to 1.7 million t, due to increased demanded in Georgia and Massachusetts. Cedigaz also claims that LNG net imports increased in Latin America to 12.1 million t by 12.4% because of an increase in Brazilian imports in early 2015. The increase in imports offset the decrease in hydropower output. In Brazil, net LNG imports increased to 5.7 million t by 42.2%, whilst, in Argentina, an increase in domestic production actually led to a 10.3% decrease in LNG imports to 3.7 million t.

In the Far East, as there was a decline in demand in a context of growing supply, spot prices collapsed and converged worldwide (apart from in North America, where prices remained lower). As a result of this, flexible LNG suppliers attempted to limit the costs of shipping by transporting cargoes to closer markets. Therefore, a trend emerged towards intra-basin trade flows of LNG. LNG imports from Nigeria saw a decrease of 15% in Asian Oceania, while imports increased from Europe and Latin America by 1.2 million t and 0.6 million t, respectively. Furthermore, exports to Asian countries and Qatar declined by 7.5% to 4.1 million t, whilst exports to Europe increased by 17.3% to 3 million t. In addition to this, exports to MENA countries increased by more than double to 4.5 million t, and exports to Europe and Asia Oceania from Trinidad and Tobago decreased by 47.2% and 60.3%, respectively. Exports to neighbouring North American nations, meanwhile, increased by 23.8% to 0.8 million t.

Edited from press release by David Rowlands

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