Highest annual growth in seven years recorded last year.
The International Group of Liquefied Natural Gas Importers (GIIGNL), based in France, recently published its annual report. Global LNG trade recorded its highest growth in supply since 2010, mainly due to additions coming from new production in Australia, Russia and Malaysia, while the global capacity of LNG carriers continued to increase. LNG imports around the world increased rapidly in 2017, totalling 289.8 Mn T, and recording their highest annual growth in seven years, up 9.9 per cent.
“Despite several delayed start-ups, new liquefaction capacity continued to come online in various areas of the world ranging from the United States to Australia and Russia, leading to a 26.2 MTPA increase in LNG supply compared with 2016,” said GIIGNL President Jean-Marie Dauger. “Meanwhile, expectations of an LNG surplus and of depressed prices have not materialized, as rising imports into China contributed substantially to balancing the market,” he added.
Founded in 197, the GIIGNL has a membership of 78 companies globally, comprising almost all active ones in LNG imports or in the operation of LNG terminals.
“Mirroring the 2016 situation, spot LNG prices followed a seasonal profile last year, although the increase in the last few weeks of 2017 was stronger than a year earlier because of much higher than expected Chinese demand and colder than normal weather in North East Asia,” the GIIGNL President commented. “Contract LNG prices also increased as a consequence of higher oil prices,” Dauger noted. “Spot charter rates finished the year on a bullish note, mainly driven by the demand for ships to transport US LNG,” he stated.
At the end of 2017, the total LNG carrier fleet consisted of 516 vessels, including 29 floating storage and regasification units and 35 vessels of less than 50 k Cbm capacity.
“Total shipping capacity at the end of 2017 stood at 73.9 million cubic metres. Total operational capacity (vessels that are known to be in service) amounted to 69.9 million cubic metres. In 2017, the average spot charter rate for a 160 k0 cubic metres-capacity LNG carrier stood at USD 46,058/day compared to an average USD 33,528/day in 2016,” said the report.
The surge in LNG supply was mainly driven by additions in production from Australia (up 10.7 Mn T) and from the US (up 9.6 Mn T) and the improving performance of liquefaction plants already operating in Algeria, Angola and Nigeria (up 6.2 Mn T).
“In the opposite direction, supplies from the Middle East decreased by 2.3 Mn T as a result of scheduled and unscheduled maintenance in Qatar,” as mentioned in GIIGNL’s annual report.
The Pacific Basin is still the largest source of LNG supplies with 131.4 Mn T, with a share of 45.3 per cent of the global market, followed by the Middle East (31.5 per cent) and the Atlantic Basin (23.2 per cent).
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