Judy Clark
Senior Associate Editor
HOUSTON, Mar. 11 -- Strong growth is seen for the expansion of global LNG infrastructure within the next 4 years, with total capital expenditures during 2005-09 gauged at more than $67 billion, reported UK energy analyst Douglas-Westwood Ltd., Canterbury.
Analyst John Westwood said annual expenditures for LNG are "forecast to increase dramatically." LNG Capex for 2008, for example, will more than double the $7.2 billion expended in 2004 and will jump to $17.5 billion in 2009.
In a Douglas-Westwood report released Mar. 10—The World LNG & GTL Report 2005-2009—author Steve Robertson said that "some $31 billion will be spent on constructing a total of 27 new liquefaction trains." He said a significant push to achieve economies of scale would be evident throughout the LNG supply chain.
"New liquefaction process technology will see train sizes of nearly 8 million tonnes/year being achieved over the forecast period," he reported. At the same time, current order books show that the largest LNG carriers will increase in size to 216,000 cu m of capacity from 145,000 cu m, Robertson added. He also expects additional orders to be placed for vessels with as much as 260,000 cu m of capacity to service new projects in Qatar.
"By 2009 the [total] LNG carrier fleet is expected to number over 300 vessels, and the total cost of the newbuild vessels over the next 5 years is expected to exceed $21 billion," Robertson projected. Nonetheless, despite these unprecedented levels of carrier demand, "intense competition between Asian LNG shipbuilders (particularly those in Korea and Japan) is expected to keep prices for LNG carriers steady," he added.
The number of new import facilities will burgeon as well, Robertson reported, especially offshore sites.
"Declining domestic gas production has created a need to construct additional import capacity in North America and many parts of Western Europe," he said. "Nearly $14.5 billion is expected to be spent on 37 new import terminals (including eight offshore) and six expansion projects. Attempts to site new terminals onshore are being made increasingly difficult by local opposition to such plans, despite the excellent safety record of the LNG industry. As a result we are seeing a diverse range of proposals for offshore terminals and we expect eight such terminals to come to fruition over the period to 2009."
The report is based on analysis of data contained in "The LNG & GTL Projects Database," part of the Oil & Gas Project Opportunities Database (OGPOD) service managed by Douglas-Westwood and OTM Consulting. OGPOD profiles more than 2,500 oil and gas projects around the world.
"The identified prospects on our database reveal an enormous potential for growth in the LNG sector," said OTM's data service manager Annie Hairsine. "For instance, the capacity of all the prospective LNG liquefaction trains for the 2005-09 period amounts to some 191 million tonnes/year of additional output. Whilst it is inevitable that not all of the prospects will go ahead on time, and some will not go ahead at all, the outlook seems very positive."
