Global LNG production hit a record 316m tonnes in 2018, a rise of 9.6% from 2017, with new Australian, US and Russian supply underpinning the increase, according to ICIS analytics tool LNG Edge.
Unplanned issues and delays to new US production meant the increase was less than previously expected.
If new export plants start up as planned, 2019 production could reach 361.5m tonnes, according to the LNG Edge Supply Forecast.
This would be a 14% increase from 2018 with over 17m tonnes of new US LNG production taking centre stage.
Global ICIS LNG Editor Ed Cox said:
“We expect that Australia will overtake Qatar in 2019 as the largest LNG exporter on an annual basis.
“But the US is now the major growth market. US LNG production could hit almost 38m tonnes this year – a 10% share of the market, and 61m tonnes in 2020, a 16% share.”
Australia exported just over 68m tonnes in 2018, a rise of almost 13m tonnes from 2017, driven by new production.
2019 will be the last year of double-digit million tonne per annum (mtpa) growth for Australia, with the LNG Edge export forecast at 78.4m tonnes.
By 2020, production will sit at around 81.9m tonnes, with the main impetus for new supply firmly focused on the US.
The US took the position of fourth-largest LNG producer in 2018 at 20.6m tonnes and with a 6% share of global supply.
The rise in US production came from Dominion’s Cove Point plant and Cheniere’s Sabine Pass, where Train 5 started up.
Delays to the start of Sempra’s Cameron and Freeport LNG plants means the impetus from the US will come more from 2019 and it will overtake Australia as the fastest-growing market.
Demand – China in focus
Over half the annual rise in global LNG demand in 2018 came from China, which imported almost 54m tonnes, a rise of 42% from 2017.
The government’s push towards gas continued, albeit with less stress on the gas system later in the year and improved pipeline supply.
Pipeline gas connections will continue to improve in urban areas in 2019, further lifting China’s LNG demand but at a slower pace than in 2018.
South Korea’s LNG imports rose by 17% in 2018 while Japan’s imports fell slightly.
The market was oversupplied for much of the fourth quarter as East Asian LNG demand failed to absorb rising supply.
More LNG to Europe?
The final quarter of 2018 saw a major rise in cargoes into northwest Europe as portfolio sellers and traders used available capacity and access to traded hubs to mitigate a global oversupply.
Total European LNG imports reached almost 43m tonnes, up by 4m tonnes year on year.
UK imports rose back above 5m tonnes, a 300,000 tonne increase on 2017 as flexible Qatari volume returned to the market in the fourth quarter alongside a range of Atlantic-based supply.
European imports could continue to rise if Asia demand fails to absorb new US production.
Editor – Global LNG, ICIS Energy
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