Robust demand augurs long-term tightness in global LNG market

06 June 2011 12:56  [Source: ICIS news]

KUALA LUMPUR (ICIS)--The global liquefied natural gas (LNG) market will likely remain tight through 2018 on the back of robust demand, particularly from Japan, Malaysian oil and gas major PETRONAS said in a report released on Monday.

Heightened concerns about nuclear energy in the wake of Japan’s crisis at its Fukushima Daiichi power plant are helping promote the use of LNG, which is considered as the cleanest type of fuel available.

Japan’s quake-related nuclear crisis, dubbed the worst in history since Chernobyl, forced the country to shut some of its reactors and prompted a rethink of strategy of some countries in building such plants.

“While it is too early to tell how much LNG demand will be impacted by the shut-in of select nuclear plants and an overall policy shift away from nuclear in select countries, the potential upside is indeed significant,” according to the PETRONAS’ World LNG Report 2010 report, which was launched at the 16th Asia Oil and Gas Conference (AOGC) in Kuala Lumpur.

Japan’s LNG demand is expected to total about 7m-9m tonnes this year and is projected to grow to 15m-20m tonnes/year in 2012-2020, according to Fereidun Fesharaki, chairman of oil consultancy FACTS Global Energy.

Meanwhile, demand from the Middle East, Europe and Latin America is also growing, which will continue soaking up the supply that was no longer needed in the US, the PETRONAS report said.

US significantly reduced its LNG imports following a boom in domestic shale gas production.

Delays in LNG projects in Australia will also add to the supply squeeze in the year 2012-2018, said Fesharaki.

The turning point may be in 2018, when the LNG market will begin to turn soft as major Australian projects come on stream, along with 20m tonnes/year of capacity in the eastern Suez region in Europe, Fesharaki added.

Other projects totalling 15-20m tonnes/year in conventional LNG are also expected to start production by 2018, he added.

AOGC runs from 5-7 June.

By: Nurluqman Suratman

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly