H1 GLOBAL LNG LIQUEFACTION AND REGASIFICATION CAPACITY OUTLOOK NEW EXPORT AND IMPORT FACILITIES TO SIGNIFICANTLY ALTER GLOBAL LNG TRADE

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1 REFERENCE CODE GDGE0102M AR PUBLICAT ION DATE OCTOBER 2014 H1 GLOBAL LNG LIQUEFACTION AND REGASIFICATION CAPACITY OUTLOOK NEW EXPORT AND IMPORT FACILITIES TO SIGNIFICANTLY ALTER GLOBAL LNG TRADE

2 Executive Summary Natural gas has become the world s energy of choice, with demand growing at more than twice the demand for oil. Natural gas is more environmentally friendly than oil and is replacing fuel oil in power generation and industrial uses. The abundance of low cost natural gas in the US and Canada and the recent natural gas discoveries in Mozambique will impact the pricing structure of Liquefied Natural Gas (LNG) contracts and trade flows. The fracking of gas deposits in the US has resulted in a surplus natural gas position and changed the industry s focus to exporting natural gas via the construction of LNG liquefaction facilities in the US Gulf Coast as well as in the east and west coast areas. The landscape for exporting western Canadian natural gas is also changing. There are XX LNG terminals proposed for the coast of British Columbia, seven of which have been granted export permits by the government. More than US$XX billion will be invested initially in Mozambique s natural gas sector to build the liquefaction capacity to produce XX million metric tons per year (mmty) (XX billion cubic feet (bcf)) of LNG, with the first exports due to start in 2018 and Around XX trillion cubic feet (tcf) of gas has been found in Mozambique s offshore Rovuma Basin, enough to supply Germany, Britain, France and Italy for XX years. LNG regasification facilities will be required in Europe and Asia to receive increases in LNG imports. The Ukraine-Russia situation has resulted in the EU suspending the approval of the South Stream Pipeline that will bring incremental volumes of natural gas into Europe and bypass Ukraine. A number of EU countries rely on Russian natural gas supplies and are thus reviewing options to lower their dependence. An option is building regasification facilities that will take LNG volumes from secure supply sources from the US and Africa. Natural gas demand will increase in Asia. Without local resources to meet demand growth, increased imports are forecast to occur in China, Japan, India and South Korea. New LNG production from Australia is primarily destined to Asia, but utilities in the aforementioned countries are also contracting LNG supplies from US facilities. The result of new liquefaction and re-gasification facilities is a change in worldwide supply patterns (including the need for more LNG tonnage) and LNG pricing. Supplies from the US and Canada could be tied to the Henry Hub natural gas price, and the introduction of more LNG supplies in the marketplace could result in more spot-market LNG sales. Significantly Alter Global LNG Trade 2

3 Executive Summary The global LNG liquefaction industry is expected to see major restructuring from 2013 to The Europe, Middle East and Africa (EMEA) region, which includes Russia, has been the epicenter for LNG liquefaction, accounting for nearly XX% of global LNG liquefaction capacity. By 2020, its dominance will to a large extent reduce, as its share in global LNG liquefaction capacity reduces to XX%. The Americas region will increase its share in global liquefaction capacity from XX% in 2013 to XX% in The share of Asia-Pacific (APAC) will also reduce from around XX% in 2013 to around XX% in The following figure compares the liquefaction capacity shares of the Americas, APAC and EMEA between 2013 and Liquefied Natural Gas Industry, Global, Comparison of Liquefaction Capacity Shares by Regions (%), 2013 and 2020 Source: GlobalData, Oil and Gas etrack, LNG Capacity Database [Accessed on March 27, 2014] The high growth in the liquefaction capacity of the Americas compared with the other two regions is due to the expected start of several liquefaction terminals in the US and Canada during the period. The US, a traditional LNG importer, is expected to build around XX mmty (XX bcf) in liquefaction capacity by The liquefaction capacity of Canada is also expected to increase in similar terms to touch XX mmty (XX bcf) by In terms of LNG regasification capacity, APAC is the leading region in the world due to the presence of major LNG importing countries, including Japan, South Korea, and China. The region accounts for over half of the current active LNG regasification capacity globally and will continue to be the highest regasification capacity holder by 2020 due to planned regasification capacity additions by India and China. Significantly Alter Global LNG Trade 3

4 Table of Contents 1 Table of Contents 1 Table of Contents List of Tables List of Figures Introduction GlobalData Report Guidance Global Liquefied Natural Gas Capacity Outlook to Global Liquefied Natural Gas Liquefaction Capacity Outlook by Region Global Liquefied Natural Gas Regasification Capacity Outlook by Region Major Trends and Issues Americas Liquefied Natural Gas Capacity Outlook to Liquefied Natural Gas Liquefaction Capacity Outlook, Key Countries Liquefied Natural Gas Regasification Capacity Outlook, Key Countries Europe, the Middle East and Africa, Liquefied Natural Gas Capacity Outlook to Liquefied Natural Gas Liquefaction Capacity Outlook, Key Countries Liquefied Natural Gas Regasification Capacity Outlook, Key Countries Asia-Pacific Liquefied Natural Gas Capacity Outlook to Liquefied Natural Gas Liquefaction Capacity Outlook, Key Countries Liquefied Natural Gas Regasification Capacity Outlook, Key Countries Benchmarking Major Operators by Active and Planned Liquefied Natural Gas Liquefaction Capacity Major Operators by Active and Planned Liquefied Natural Gas Regasification Capacity Significantly Alter Global LNG Trade 5

5 Table of Contents 8 Appendix Definitions Abbreviations Sources Research Methodology Coverage Secondary Research Disclaimer List of Tables Table 1: Liquefied Natural Gas Industry, Global, Details of Liquefied Natural Gas Import Contracts from US to Europe, Table 2: Liquefied Natural Gas Industry, Americas, Liquefaction Capacity Outlook (mmty), Table 3: Liquefied Natural Gas Industry, Americas, Regasification Capacity Outlook (bcf), Table 4: Table 5: Table 6: Liquefied Natural Gas Industry, Europe, the Middle East and Africa, Liquefaction Capacity Outlook for Major Countries (mmty), Liquefied Natural Gas Industry, Europe, the Middle East and Africa, Regasification Capacity Outlook for Major Countries (bcf), Liquefied Natural Gas Industry, Europe, the Middle East and Africa, Major Planned Liquefied Natural Gas Regasification Terminals in Emerging/New Importing Countries, Table 7: Liquefied Natural Gas Industry, Asia-Pacific, Liquefaction Capacity Outlook (mmty), Table 8: Liquefied Natural Gas Industry, Australia, Major Planned Liquefied Natural Gas Liquefaction Projects, Table 9: Liquefied Natural Gas Industry, Asia-Pacific, Regasification Capacity Outlook (bcf), Significantly Alter Global LNG Trade 6

6 Table of Contents 1.2 List of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Liquefied Natural Gas Industry, Global, Geographic Distribution of Liquefied Natural Gas Capacities, Gas Industry, Russia, Existing and Planned Infrastructure for Gas Export to China and Far East, Liquefied Natural Gas Industry, Americas, Distribution of Planned Liquefaction Capacity by Country and Project Stage, Liquefied Natural Gas Industry, Canada, Planned Liquefied Natural Gas liquefaction Terminals along the West Coast, Liquefied Natural Gas Industry, Americas, Distribution of Planned Regasification Capacity by Country and Project Stage, Figure 6: Liquefied Natural Gas Industry, US, Liquefied Natural Gas Imports (bcf), Figure 7: Figure 8: Figure 9: Liquefied Natural Gas Industry, Europe, the Middle East and Africa, Distribution of Planned Liquefaction Capacity by Country and Project Stage, Liquefied Natural Gas Industry, Europe, the Middle East and Africa, Distribution of Planned Regasification Capacity by Country and Project Stage, Liquefied Natural Gas Industry, Asia-Pacific, Distribution of Planned Liquefaction Capacity by Country and Project Stage, Figure 10: Liquefied Natural Gas Industry, Asia-Pacific, Distribution of Planned Regasification Capacity by Country and Project Stage, Figure 11: Liquefied Natural Gas Industry, Global, Key Liquefied Natural Gas Operators by Liquefaction Capacity (mmty), Figure 12: Liquefied Natural Gas Industry, Global, Key Liquefied Natural Gas Operators by Planned Liquefaction Capacity Addition (mmty), Figure 13: Liquefied Natural Gas Industry, Global, Key Liquefied Natural Gas Operators by Regasification Capacity (bcf), Figure 14: Liquefied Natural Gas Industry, Global, Key Liquefied Natural Gas Operators by Planned Regasification Capacity Addition (bcf), Significantly Alter Global LNG Trade 7

7 Introduction 2 Introduction The global Liquefied Natural Gas (LNG) industry is currently witnessing rapid developments at both supply (liquefaction) side and demand (regasification) side. At the liquefaction side, Qatar currently holds the highest LNG liquefaction capacity in the world. However, by 2020, the US, Australia and Canada are expected to become larger centers for LNG liquefaction. By 2020, the global LNG industry is also expected to become more receptive to LNG pricing, independent of crude oil pricing. As the flexible hub-price based LNG contracts, as offered by US LNG suppliers, become more widespread, traditional crude oil-indexed LNG pricing is likely to be increasingly challenged by buyers. Major LNG buyers in Asia are trying to form buyers clubs in order to better negotiate LNG prices. Among the traditional major LNG buyers in the world, the US is set to change status from a buyer to a supplier of LNG. India is expected to see a major increase in its LNG purchases as the country plans massive increase in its LNG regasification capacity. Japan, South Korea, and China are expected to continue to be major LNG buyers. Several new LNG buyers are expected to emerge, especially in the Central and Eastern Europe (CEE) region, by Most of these countries are trying to find alternatives to Russian gas supplies and thus plan to start importing LNG. 2.1 GlobalData Report Guidance The report begins with an executive summary chapter, which highlights the key findings of the report. The main body of the report is structured as follows: Chapter two provides an introduction to the report and provides report guidance. Chapter three provides an overview of global liquefaction and regasification capacities and highlights key trends and issues in the global LNG industry Chapter four provides an overview and outlook of LNG capacity in Americas to 2020 Chapter five provides an overview and outlook of LNG capacity in EMEA to 2020 Chapter six provides an overview and outlook of LNG capacity in APAC to 2020 Chapter seven provides a comparison of major LNG liquefaction and regasification operators worldwide. Chapter eight is the appendix to the report. Significantly Alter Global LNG Trade 8

8 Europe, the Middle East and Africa 5.1 Liquefied Natural Gas Liquefaction Capacity Outlook, Key Countries In the EMEA region, XX countries have active liquefaction capacity. Qatar accounted for around XX% of the region s total capacity in The country does not plan any new liquefaction capacity additions until Other major countries in the region in terms of liquefaction capacity include Nigeria and Algeria with capacities of XX mmty (XX bcf) and XX mmty (XX bcf), respectively. Nigeria is expected to add considerable new liquefaction capacity by 2020 increasing its total capacity to XX mmty (XX bcf). Algeria also plans to increase its liquefaction capacity to XXmmty (XX bcf) during the same period. The following table shows LNG liquefaction capacity outlook for major countries in EMEA up to Table 4: Liquefied Natural Gas Industry, Europe, the Middle East and Africa, Liquefaction Capacity Outlook for Major Countries (mmty), Country Qatar Nigeria Algeria Egypt Oman Russia Yemen UAE Angola Norway Others Total Total (bcf) Source: GlobalData, Oil and Gas etrack, LNG Capacity Database [Accessed on March 27, 2014] Significantly Alter Global LNG Trade 31

9 Europe, the Middle East and Africa The following figure shows the distribution of the EMEA s planned liquefaction capacity by country and project stage. Figure 7: Liquefied Natural Gas Industry, Europe, the Middle East and Africa, Distribution of Planned Liquefaction Capacity by Country and Project Stage, 2020 Planned liquefaction capacity (mmty) Feasibility FEED Approval Construction Algeria Cyprus Equatorial Guinea Iran Iraq Israel Mozambique Nigeria Russia Tanzania Source: GlobalData, Oil and Gas etrack, LNG Capacity Database [Accessed on March 27, 2014] Significantly Alter Global LNG Trade 32

10 Appendix 8 Appendix 8.1 Definitions The three major regions considered for this report are Europe, the Middle East and Africa (EMEA); Asia-Pacific (APAC); and the Americas (North America, Central America, the Caribbean and South America). Annual capacity refers to the capacity as of December 31 of each year. Capacity information for the period is based on new project developments and capacity expansion announcements made by companies and oil and gas ministries. The total liquefaction/regasification capacity of a company refers to the total equity weighted capacity of all liquefaction/regasification terminals in which the company has equity stakes. The capacities of partly owned subsidiaries are not included in the capacity of the parent company. The former are shown as separate companies in the report. 8.2 Abbreviations AAGR: APAC: bcf: CEE: CNPC: CSG: DoE: EMEA: FEED: FERC: FID: FLNG: Average Annual Growth Rate Asia-Pacific billion cubic feet Central and Eastern European China National Petroleum Corporation Coal Seam Gas US Department of Energy Europe, the Middle East and Africa Front-End Engineering Design Federal Energy Regulatory Commission Final Investment Decision Floating Liquefied Natural Gas Significantly Alter Global LNG Trade 62

11 Appendix FSRU: FTA: GAIL: IOC: IOCL: JCC: KNPC: KOGAS: LNG: mmbtu: mmty: MOU: NEB: NNPC: NOC: NTS: OKLNG: SPA: tcf: TIGF: WTO: Floating Storage and Regasification Unit Free Trade Agreement Gas Authority of India Limited International Oil Company Indian Oil Corporation Ltd Japan Customs-Cleared Crude Kuwait National Petroleum Company Korea Gas Corp. Liquefied Natural Gas million British thermal unit million metric tons per year Memorandum of Understanding National Energy Board Nigerian National Petroleum Corporation National Oil Company National Transmission System Olokola Liquefied Natural Gas Supply Purchase Arrangement trillion cubic feet Transport and Infrastructures Gaz France World Trade Organization Significantly Alter Global LNG Trade 63

12 Appendix 8.3 Sources Anderlini and Robinson (2013). China-Myanmar pipeline to open in May. Financial Times. Available from: [Accessed on September 23, 2013] APA (2013). Victorian Transmission System. APA Group. Available from: [Accessed on September 23, 2013] DoE (2014). Applications Received by DoE/FE to Export Domestically Produced LNG from the Lower-48 States (as of April 18, 2014). US Department of Energy. Available from: ons.pdf EIA (2014). U.S. Liquefied Natural Gas Imports. U.S. Energy Information Administration. Available from: [Accessed on June 06, 2014] Gazprom (2014). Alexey Miller: Russia and China signed the biggest contract in the entire history of Gazprom. JSC Gazprom Neft. Available from: [Accessed on May 22, 2013] 8.4 Research Methodology GlobalData s dedicated research and analysis teams consist of experienced professionals with advanced statistical expertise and marketing, market research and consulting backgrounds in the energy industry. GlobalData adheres to the codes of practice of the Market Research Society ( and Strategic and Competitive Intelligence Professionals ( All GlobalData databases are continuously updated and revised. Significantly Alter Global LNG Trade 64

13 Appendix Coverage The objective of updating GlobalData s coverage is to ensure that it represents the most up-to-date vision of the industry possible. GlobalData aims to cover all major news events and deals in the energy industry, updated on a daily basis Secondary Research The research process begins with extensive secondary research on internal and external sources to gather qualitative and quantitative information relating to each market. The secondary research sources that are typically referred to include, but are not limited to: Company websites, annual reports, financial reports, broker reports, investor presentations and SEC filings Industry trade journals and other technical literature Internal proprietary and external databases National government documents, statistical databases and market reports News articles, press releases and web-casts specific to the companies operating in the market 8.5 Disclaimer All Rights Reserved. No part of this publication can be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData. Significantly Alter Global LNG Trade 65