The International group of liquefied natural gas importers released its annual report, “The LNG industry in 2014.”
As the group’s president Domenico Dispenza said the global LNG industry can look back on 2014 as another year of relative stagnation with LNG trade reaching 239.2 MMT, a 1% increase over 2013, but just below 2011 levels.
The report also highlights that although one new liquefaction plant came on stream in May in Papua New Guinea and one expansion train started producing in Algeria , disappointments in Angola and Egypt and slowdown in Qatar limited the volume of additional LNG supply. Low demand in South Korea as well as slower than expected growth in China contributed to loosen the market tightness observed in recent years, foreboding the return of a buyers’ market as the year progressed.
During the second half of the year a sharp decrease in crude oil prices combined with a looser supply situation in the Pacific drove down prices in Asia, where spot prices were halved between March and October of last year. On the supply side, this price drop in Asia will inevitably slow down or defer development of expensive new supply projects. On the demand side, it has begun to translate into the return of flexible LNG cargoes to Europe, where spot prices have been disconnected from oil prices for some time.
Report shows that 69,6 million tons of LNG were traded on a spot or short-term basis making up 29% of the total trade. Asia accounted for 75% of global LNG demand while 40% of the global volumes of liquefied natural gas came from the Middle-East and 38% were supplied from Asia-Pacific.
Dispenza adds that the structure of LNG demand should also evolve and that stricter legislation on shipping emissions starting in January 2015 in the Atlantic basin will help stimulating the development of small scale LNG.
LNG World News Staff; Image: GIIGNL