LNG Business Set for Remarkable Growth in Capital Expenditure
Posted: 16 March 2005
The LNG business is poised for a period of strong growth in capital expenditure, with forecast Capex for the 2005-2009 period totalling some $67 billion. Announcing the release of “The World LNG & GTL Report” at a presentation in Houston today, John Westwood of international energy analysts Douglas-Westwood stated that “Annual expenditure on LNG facilities is forecast to increase dramatically from $7.2 billion in 2004 to $17.5 billion in 2009.”
Steve Robertson, report author said “We forecast that some $31 billion will be spent on constructing a total of 27 new liquefaction trains whilst nearly $14.5 billion is expected to be spent on 37 new import terminals (including eight offshore) and six expansion projects.
“By 2009 the LNG carrier fleet is expected to number over 300 vessels and the total cost of the newbuild vessels over the next five years is expected to exceed $21 billion. Despite the unprecedented levels of demand, intense competition between Asian LNG shipbuilders (particularly those in Korea and Japan) is expected to keep prices for LNG carriers steady.
“A significant push to achieve economies of scale is evident throughout the supply chain. New liquefaction process technology will see train sizes of nearly 8 mmtpa being achieved over the forecast period, whilst the current orderbook shows that the largest LNG carriers will take a leap in size from 145,000 m 3 to 216,000 m 3 capacity. Additional orders for vessels up to 260,000 m 3 are also expected to be placed to service new projects in Qatar.
“Declining domestic gas production has created a need to construct additional import capacity in North America and many parts of Western Europe. Attempts to site new terminals onshore are being made increasingly difficult by local opposition to such plans, despite the excellent safety record of the LNG industry. As a result we are seeing a diverse range of proposals for offshore terminals and we expect eight such terminals to come to fruition over the period to 2009.”
The report is based on analysis of data contained in “The LNG & GTL Projects Database”, part of the OGPOD service managed by Douglas-Westwood and OTM Consulting. Annie Hairsine of OTM, manager of the data service, remarked that, “the identified prospects on our database reveal an enormous potential for growth in the LNG sector. For instance, the capacity of all the prospective LNG liquefaction trains for the 2005-2009 period amounts to some 191 (mmtpa) of additional output. Whilst it is inevitable that not all of the prospects will go ahead on time, and some will not go ahead at all, the outlook seems very positive.”
Posted by Editor Pipeline Magazine
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