For the fifth consecutive year, global liquefied natural gas (LNG) trade set a record in 2018 at 316.5 million metric tons (mmt), a nearly 10% increase year/year, the International Gas Union (IGU) said Tuesday.
The increase of 28.2 mmt from 2017 was the third-largest annual increase ever, behind only 2010 and 2017. Growth in trade was supported by increases in output from liquefaction plants coming online, according to the 2019 World LNG Report, IGU’s annual analysis of the global industry.
“The single greatest increase in LNG exports occurred in Australia,” which rose by 12.2 mmt year/year, as new trains came onstream and there was higher utilization at existing facilities. “Other significant contributors to LNG supply were the United States and Russia,” with the United States adding 8.2 mmt and Russia up 7.8 mmt.
“The future looks very bright for LNG, as evidenced by the fifth consecutive record-breaking year for global trade,” IGU President Joe M. Kang said. “With increases in both demand from across the world, and ramping up of supply to meet it, it is clear, that nations across the globe are recognizing LNG’s ability to provide a clean, efficient, and affordable source of energy.
“The vibrant LNG industry brings great benefits to society by improving energy security and offering opportunities to meet emissions targets, while facilitating access to energy in diverse markets around the world. We only anticipate this upward trend for global trade to continue, and for natural gas to keep improving the quality of life for millions of people as it becomes increasingly more accessible.”
Even with export increases from the United States, the Asia-Pacific region last year continued to be the leading LNG-exporting region, supplying 38.4% of total exports at 121.6 mmt, a total consistent with its share of global exports since 2016.
Natural gas also met almost one-quarter of worldwide energy demand last year, with 10.7% supplied as LNG, according to IGU. The highest demand growth came from China, South Korea and other Asian nations.
More than 99 mmt of last year’s total 316.5 mmt was for short term trade, a 14.5 mmt increase from 2017 and 31% of total LNG trade.
“This marks the second year in a row in which the non-long-term market has substantially expanded, due to growing LNG supply and demand elasticity,” IGU noted. Increasing gas demand last year also played an essential role as a key driver of growth in global LNG trade.
“The additions of Bangladesh and Panama as the two newest importing markets in the last year brought the total number of importing markets to 37,” IGU said. “Asia remained the driver of international LNG demand growth, with China and South Korea returning as the key sources of LNG import demand in 2018, with growth of 15.8 and 6.4 mmt respectively. Together, China and South Korea accounted for nearly 80% of the increase in net trade.”
Other key markets driving gas import growth were India and Pakistan, while European LNG imports too increased year/year for the fourth consecutive year, by 3.4 mmt.
“This increase occurred despite net negative incremental growth in these markets through the first three quarters of the year, with the fourth quarter of the year making up for the losses, as it was the second strongest quarter ever for net imports into the region,” according to IGU.
“Between January 2018 and February 2019, an additional 36.2 mmt of liquefaction capacity was added to the global nominal capacity,” which equaled to a worldwide total of 393 mmt/year (mmty). “This growth in liquefaction capacity is expected to continue, with 101.3 mmty of capacity under construction or sanctioned, as of February 2019.”