Thursday, March 9, 2017

LNG: Think Egypt, India, China, Jordan -- March 9, 2017

RBN Energy: why more liquefaction capacity may be needed in less than three years.

Jordan: a new entrant -- imported as much LNG as France in 2015
Pakistan: a new entrant -- imported twice as much LNG as France in 2015
Egypt: a new entrant -- imported more LNG than India in 2015

The article starts with suggestion that current situation suggests liquefaction build-out has gotten a bit ahead of itself.

Includes a graph of global LNG imports for 2015; previously posted on the blog. New on the graph, however, is noting clearly the countries identified as "new entrants" to the LNG import global family: Egypt, Pakistan, Jordan, Poland
  • Egypt: imported more LNG than India in 2015; second only to China in LNG imports
  • Pakistan: fourth in LNG imports; behind China, Egypt, and India; imports more than twice as much as France, #6 on the list
  • Jordan: #5 on the list, ahead of France; importing about the same amount as France
  • Poland: #11 -- between (and about the same as) Indonesia and Taiwan
Other data points:
  • incremental increase in supply from:
    • Australia: 15 MTPA; now totals 44 MTPA
    • US: 3 MTPA, all of it from Cheniere Energy's first two Sabine Pass liquefaction trains in southwestern Louisiana, both of which started LNG production last year
  • anticipated growth
    • in 2015: 7%
    • going forward: perhaps not as fast growth, but by most estimates at least 4% annual growth and maybe as much as 5%
  • loser: coal
  • US plants coming on line this year:
    • Sabine Pass trains 3 and 4, each with a capacity of 4.5 MTPA
    • Dominion's Cove Point facility, Chesapeake Bay, Maryland, 5.25 MTPA
  • out-years, 2018 - 2020: nine trains, combined capacity adds another 40 MTPA (compare with current Australian numbers above)
    • Sabine Pass
    • Cameron LNG
    • Freeport LNG
    • Cheniere's Corpus Christi site
    • Kinder Morgan's Savannah, GA site
  • pricing
    • US developers like Cheniere broke into the LNG market by pricing LNG at a small mark-up and a flat liquefaction fee rather than tying price of LNG to oil, the historical way of doing things
    • the plan worked, and the global market is shaken up
  • tea leaves suggest everything is favoring US producers over others

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