Market situation depends on consumer country

Market situation depends on consumer country

In the United States, despite the large number of LNG projects, only sabinepass terminal can actually increase production. In 2017, with the operation of the latest two phases of the project, sabinepass terminal capacity reached 13 billion cubic meters per year.

M8 connector

The US LNG supply structure has also become more balanced and predictable. In 2016, the LNG exported by sabinepass terminal was mainly aimed at Latin American customers. In 2017, the proportion of this terminal in Latin American market decreased from 60% to 35%. 40% of its gas volume was transported to South Korea, China and Japan in Asia, and the rest was sold to Europe and the Middle East on average. Through the sabinepass project, the United States has become a truly global LNG supplier like Qatar.

In 2018, the annual new capacity of LNG in the United States is expected to reach 18 billion cubic meters, of which the covepoint terminal with a capacity of more than 7 billion cubic meters / year has started exporting the first batch of LNG in March this year. Compared with Australia, there is more space for LNG production in the future in the United States. At present, only projects under construction can ensure an annual increase of 50 billion cubic meters of supply capacity by 2020.

In the case of high demand, not only new capacity has been put into operation one after another, but also existing capacity has been actively produced. For example, the capacity of Angola and Nigeria in Africa has increased by 7 billion cubic meters per year. The increased supply is partly to compensate for Qatar's temporary decline in production (about 3 billion cubic meters per year, due to technical reasons).

In the near future, the global LNG market situation depends on whether LNG consumers can actively use the increased supply. First, can the growing Asian economy, especially China's economy, continue to increase natural gas consumption?

Second, can Europe's natural gas demand remain at the high level achieved in 2017? Third, whether the new liquefaction capacity can be completed in time.

In recent years, the operation of liquefaction capacity has been delayed. Although the new capacity has not been cancelled, the postponement will have an impact on maintaining the market balance. The production plan in 2018 is quite spectacular, with the global newly added LNG capacity reaching about 50 billion cubic meters, rather than the estimated 35 billion cubic meters a year ago. For producers and producers, this means more competition around the world.