The International Gas Union (IGU) has released its 2017 World LNG Report, examining the current state of the Global LNG Industry. The latest report highlights the dynamic 2016 experienced by the global LNG industry – with significant growth in LNG supply projects, as well as increases in demand for LNG as a fuel from new and existing markets across the globe. Global LNG trade in 2016 reached a record 258 million tonnes (MT) – an increase of 5% from 2015, and the largest ever year for LNG trade. This dramatic increase is particularly noticeable when compared with the average 0.5% growth rate of the previous four years. This jump can primarily be attributed to a significant increase in new supply, due largely to the start of exports from the US Gulf of Mexico, as well as the start of commercial operations in Australia Pacific LNG, among others. These new projects come about as governments, businesses and consumers become increasingly aware of the advantages of natural gas in the global energy mix, and are encouraging trends pointing to further growth in the LNG market. There was an also significant increase in demand as LNG finds a role as a fuel of choice in new markets. The most pronounced increase in demand comes from Asian markets, with China’s LNG consumption increasing dramatically by roughly 35% to 27 million tonnes per annum (MTPA). On the flip-side, some markets – including Japan and South Korea as the two largest – have shown signs of satiation as other forms of energy come to the fore, in part showing the flexible value of LNG as a fuel source. This was particularly prevalent in Brazil, where resurgence in hydro power has reduced demand for LNG by 80%. The latter half of 2016 saw Asian and spot LNG prices reach $9.95 per million British thermal units (MMBtu) by February 2017, due to disruptions to supply and cold winter temperatures. This followed a dip in price in the first half of the year to $4.05 MMBtu, primarily due to supply outstripping demand, generating an average Northeast Asian spot price for 2016 of $5.52 MMBtu. The UK National Balancing Point (NBP) finished 2016 at $5.44 MMBtu. LNG continues to play an essential role in the marine shipping sector – with 31 newbuilds delivered from shipyards to the LNG shipping fleet in 2016. This constitutes an increase of 7% compared to 2015. The IGU’s most recent report on Enabling Clean Marine Transport emphasises the monumental impact switching to LNG fuel can have on emissions generated by shipping, with one tanker on 3% bunker fuel producing as much in emissions as 50 million diesel-fuelled cars.
Global LNG trade jumps 5% in 2016
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