$240B to be spent on greenfield, brownfield LNG supply projects

Oil&Gas Materials 17 September 2019 16:28 (UTC +04:00)

Baku, Azerbaijan, Sept.17

By Leman Zeynalova – Trend:

Around $240 billion will be spent between 2019 and 2025 on greenfield and brownfield liquefied natural gas (LNG) supply projects, Trend reports citing Wood Mackenzie research and consulting company.

The company said in its report that the LNG market will more than double in size to over 1000 bcm by 2040, a growth rate eclipsed only by renewables.

“A niche market not long ago, shipped LNG volumes will exceed global pipeline exports within six years. Investors are scrambling to grab a piece of the action. We are witnessing a supply boom the scale of which the industry has never experienced before. Around $240 billion will be spent between 2019 and 2025 on greenfield and brownfield LNG supply projects, backfill and finishing construction for those already underway,” said Wood Mackenzie.

The company expects 50 percent to be added to global LNG supply.

“Over 100 mmtpa is from the US alone, most of the rest from Qatar, Russia, Canada and Mozambique. Still, more capital will be needed to meet demand growth beyond the mid-2020s. But the rapid growth also presents major challenges for sellers and buyers to adapt to changes in the market,” said the report.

“There is a risk of bottlenecks as this new supply arrives on the market. The industry will have to balance sizeable waves of fresh sales volumes with demand growing in fits and starts and across an array of disparate marketplaces – some mature, many fledgling, a good few in between. In future, sellers need to be more sophisticated. The full toolkit will have a portfolio of LNG, a mixture of equity and third-party contracted gas; a trading capability to optimise on volume and price; and the requisite logistics – access to physical capacity of ships and re-gas terminals to shift LNG to where it’s wanted.”


Follow the author on Twitter: @Lyaman_Zeyn