New research from Cedigaz expects global LNG production to increase by 60% – but also for the rate of production growth to slow after 2021, as producing states’ reserves dwindle and as their infrastructure ages.
France-based natural gas analyst Cedigaz expects LNG production capacity to increase from 244 million tonnes a year (mta) in 2015 to 387 mta by 2021 and to 354 mta by 2035. It also expects today’s production glut to continue until 2023-2024.
Cedigaz expects liquefaction capacity to plateau in 2019-2023 in Asia and Oceania, then to decrease to 2035. Middle East liquefaction capacity also looked stable at some 90 mta – until Qatar’s recent decision to ramp up its production by a third. Qatar will therefore raise its output to 100 mta by 2024. This, Cedigaz says, “could change the game”.
The main shift – and perhaps the biggest variable – lies in North America, where Cedigaz expects liquefaction capacity in the US and Canada to reach 66 mta by 2021.
“Rebalancing of the market is not expected before 2023 – or even 2024, if probable developments such as Fortuna FLNG and potential upside from currently idle capacity [in] Egypt and Yemen are taken into account,” it says. “[But] after that, the continuous growth of the LNG market will leave a large margin for the implementation of new projects.
“The significant increase in effective liquefaction capacity to 2020-2021 is led by strong growth in Australia and the US until 2019 and 2021 respectively, based on existing facilities and projects under construction, potential projects are not included.
“After 2021, unless new projects are launched, gradual decline in production capacity due to the ageing of some facilities [in] southeast Asia and growing constraints on resources [in] Trinidad & Tobago, the United Arab Emirates, Oman, Algeria, Indonesia and Malaysia is to be expected.”