Middle East is no longer single global LNG balancing supplier?
Baku, Azerbaijan, Oct.24
By Leman Zeynalova – Trend:
The Middle East’s traditional position as the single global liquefied natural gas (LNG) balancing supplier is increasingly challenged by the strong development of export capacity in North America, Australia and the Russian Federation, the International Energy Agency (IEA) said in its Global Gas Security Review 2018.
The report says that the current wave of LNG export projects adds some 140 billion cubic meters of liquefaction capacity between 2018 and 2023, increasing global capacity by almost 30 percent.
"Half of that expansion (70 bcm) takes place in the United States. Nearly all the new liquefaction capacity should be operating by 2020. This could result in looser LNG market conditions, especially between 2019 and 2020 when the bulk of new liquefaction capacity begin operations – assuming that these new projects are commissioned according to their current schedule and no additional unplanned maintenance is required. This loose market could be short-lived owing to the dynamic growth in emerging Asian markets," said the IEA.
IEA estimates that global natural gas trade has grown by more than 40 percent over the past 15 years, with an increasing role played by LNG, which saw its share of the trade increase from 22 percent to 35 percent over the period.
"By 2023, interregional traded volumes are expected to account for 31 percent of total natural gas consumption, with LNG standing at 505 billion cubic meters (bcm) or almost 40 percent of total trade," said the report.
Global gas trade flows are expected to change significantly over the period to 2023, according to the IEA analysts.
"The trade flow picture, currently dominated by a limited number of major links, is expected to evolve towards growing interregional trade and interdependence between buyers and sellers, enabled by the development of LNG," said the report.
IEA forecasts that China and emerging Asian markets are expected to account for over 90 percent of LNG trade growth over the next five years.
Other developments are expected in Europe, where LNG imports contribute to the replacement of depleting domestic production, and in Latin America as a seasonal complement to power generation needs, according to the report.
Follow the author on Twitter:@Lyaman_Zeyn