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Major growth forecast for LNG Market
Posted: 4 September 2003
Capital expenditure in the LNG business is forecast to see strong
growth, with the total spend over the 2003-2007 period expected
to amount to nearly double that of the previous five-year period.
Announcing the release of “The World LNG & GTL Report”
at the Offshore Europe exhibition in Aberdeen, Steve Robertson,
of international energy analysts Douglas-Westwood, stated that,
“We expect over $39 billion to be spent over the period to
2007, over half of which ($20.5 billion) will be spent on constructing
a total of 18 new liquefaction trains. LNG carriers are expected
to attract the next largest share of the forecast spend, and we
anticipate that the fleet will expand to over 200 vessels by 2007,
at a cost of some $11 billion. Nearly $7.5 billion is expected to
be spent on developing import terminal capacity, with 21 new import
terminals forecast, along with the expansion of two existing terminals.
“In terms of the forecast amount of new liquefaction capacity,
the results of our analysis indicate that we will see new facilities
offering a total of 78 million tonnes per annum (mmtpa) of additional
output capacity coming onstream between 2003 and 2007. Regionally,
this new production capacity will be situated mostly in Africa,
followed by Asia and the Middle East. Overall, we anticipate that
Asia will be the leading region in terms of total expenditure, attracting
a Capex of nearly $17 billion over the five-year period. This represents
40% of the total spend, with activity in this region driven mainly
by a large number of orders for LNG carriers, the majority of which
have been placed with Korean shipyards such as Daewoo, Hyundai and
Samsung.”
The report is based on analysis of data contained in “The
LNG & GTL Projects Database”, a new service soon to be
launched by Douglas-Westwood and OTM Consulting. Annie Hairsine
of OTM, manager of the new data service, remarked that, “our
database identifies a very large number of prospects for the period,
representing a potential for strong market growth. For instance,
the capacity of all the prospective LNG trains for the 2003-2007
period amounts to some 113 mmtpa of additional output. Of course,
not all of the prospects will go ahead on time, and some will not
go ahead at all, but the outlook seems very positive.”
Some regions are likely to face challenges when locating new import
terminals. Although the LNG industry has an excellent safety record,
local opposition to new facilities is quite common, and perhaps
is now more vigorous given the continuing worries over terrorism.
This is particularly a problem in North America and Western Europe.
The Cove Point terminal in Maryland was finally re-opened this year,
but reportedly took more than 21 months to gain approval from the
Federal Energy Regulatory Commission (FERC) after concerns were
raised over the proximity of the terminal to a nuclear power plant.
In Mexico, plans to locate an import terminal in Rosarito, adjacent
to a power plant operated by state firm Pemex, were strongly opposed
and are now looking uncertain amid suggestions that the necessary
land-use permit may be denied. In Italy, the BG group has obtained
approval for its terminal at Brindisi, but this terminal also faced
significant local opposition.
The impact of these difficulties may well be that more operators
choose to locate import facilities offshore. A number of concepts
for offshore terminals exist at the moment, many of which are located
in the areas identified above. These include ChevronTexaco’s
‘Port Pelican’ development in the Gulf of Mexico, BHP
Billiton’s plan to locate a floating terminal 22 miles off
the Ventura County coast, and a plan proposed by Cross Gas Energy
to locate an offshore terminal near Livorno, Italy.
The World LNG & GTL Report 2003-2007 forms part of a series
of reports that are used by over 200 companies in 30 countries.
These include the leading oil & gas companies, contractors and
investment banks.
The Report is available from Douglas-Westwood Limited, and additional
material, including charts and tables on countries, sectors and
markets is available from:
For more information see www.dw-1.com.
Posted by Richard Price,
Editor Pipeline Magazine
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