The Ukraine war has brought energy affordability and security to the forefront, with countries around the world looking to lock-in long term supply for industrial feedstock and electricity generation.
With its lower carbon dioxide emissions compared to coal, natural gas demand is growing in Europe as countries look to replace Russian supply while managing climate change commitments. In the Asia Pacific, demand is increasing for petrochemical, fertilizer, steel, and cement production to meet economic growth targets, along with increasing public demands for reliable, affordable electricity.
Increasing gas demand is resulting in a boom in LNG related infrastructure construction, according to a new Evaluate Energy Briefing Note entitled: Linking North American LNG Supply to Asia-Pacific Markets.
Construction of regasification facilities saw a major jump in Europe in 2022, with 20 mtpa added as Russian gas was removed from the market, according to Evaluate Energy data.
EU import capacity is set to expand by one-third by the end of 2024, according to the U.S. Energy Information Administration (EIA). Germany expects to have six terminals operational by the end of 2023 capable of processing 3.7 bcf/d. Another 4.9 bcf/d of capacity is planned or underway across the EU.
Asia-Pacific is expected to add around 230 mtpa in regasification capacity by 2030, an increase of almost 42 per cent. In China, 8.5 bcf/d of new regasification capacity is being built. India expects 1.3 bcf/d of capacity to be online by the end of 2023.
About 80 per cent of new LNG supply between now and 2030 will be from Qatar and the U.S., with Qatar adding 48 mtpa of liquefaction and the US adding nearly 96 mtpa, according to Evaluate Energy data. Other countries adding liquefaction capacity include Mozambique (20 mtpa), Canada (16 mtpa) and Australia (12 mtpa), assuming all active projects reach completion according to current plans.
By 2030 North America will have almost 40 per cent of global LNG production capacity, positioning it to be the major supplier of gas to Asia.
“This new supply will reshape global trade flows,” said report author Tom Young. “Portfolio players and trading houses will look to optimize their portfolios by taking a multi-basin approach, meaning that they will use sources of supply from various contracted volumes around the world to meet both short- and medium-term demand, minimizing the number of long journeys taken by vessels without cargoes, rather than the more traditional approach of point-to-point contracts.”
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