LNG market growth drives worldwide project expansion

Monday, 06 August, 2018

LNG market growth drives worldwide project expansion

According to the Alaska Journal of Commerce, LNG projects soon to come online globally represent a more than one-third boost to global capacity, as reported by the International Gas Union’s 2018 annual report.

Oil and gas companies are responding to the growing market for liquefied natural gas by engaging in new projects, while more liquefaction capacity is coming online in Russia, Australia and the US Gulf Coast. LNG projects under construction or anticipated to reach a final investment decision within the next 12 months total more than 125 million tonnes of annual output capacity.

Not sitting still as the market grows, world leader Qatar plans to expand its LNG capacity by 23 million tonnes by 2023 — jumping to 100 million tonnes per year. Qatar Petroleum has signed a contract for front-end engineering and design of three new liquefaction trains — the world’s largest — and drilling could start next year to develop additional gas reserves.

Nigeria, the world’s fourth-largest LNG exporter, is taking steps to expand its LNG production capacity by a third, boosting annual capacity to 30 million tonnes by 2024. Nigeria’s seventh liquefaction train could cost as much as $6.5 billion to build, with an additional $5 billion for the wells and pipelines to supply the expansion.

Working to add Mozambique to the list of 20 LNG-exporting nations, ExxonMobil plans to expand its proposed Rovuma project to cut production costs, and to build two liquefaction trains — at 7.6 million tonnes each. Anadarko plans to raise $14 billion to $15 billion from banks and export credit agencies as it lines up long-term sales to guarantee loans for its own LNG project in Mozambique, Reuters reported. The facility would start at 12.88 million tonnes a year.

In addition, Italy’s Eni is also investing heavily in Mozambique. It leads a consortium that last year gave the go-ahead for an $8 billion floating LNG project called Coral, with a capacity of 3.4 million tonnes per year and a planned 2022 start-up.

ExxonMobil is looking to possibly double output at its four-year-old Papua New Guinea LNG project, adding 8 million tonnes annual capacity, Interfax Global Energy reported. The Australian Financial Review reported the cost of expanding gas production and LNG capacity could reach $12 billion.

In North America:

  • Shell and its partners in LNG Canada are expected to decide later this year whether to start construction in Kitimat, B.C., the first phase providing 13 million tonnes a year of capacity.
  • Cheniere is continuing to expand its Sabine Pass, La., plant, building a fifth train to add another 4.5 million tonnes of capacity, while marketing a proposed sixth unit.
  • Cameron LNG in Louisiana has three trains under construction at almost 13 million tonnes and a fourth with all its permits.
  • Three trains are under construction at Freeport LNG in Texas, totalling 15 million tonnes, while plans for a fourth have been submitted to regulators.
  • Three more Gulf Coast projects have federal approval but lack investment decisions. Two would be repurposed LNG import terminals — the 16-million-tonne Lake Charles project, led by Shell and a Texas pipeline company, and 15-million-tonne Golden Pass terminal, led by Qatar and ExxonMobil. The 2.5-million-tonne Elba LNG export terminal in Georgia is delayed to late 2018.

Also looking at the Asia market, the $27 billion Yamal LNG project in Russia’s Arctic expects to complete construction of its second and third liquefaction trains by early 2019 (16.5 million tonnes), while already making plans for a second Arctic project at almost 20 million tonnes, with an investment decision by 2019.

Meanwhile, $200 billion of LNG investments in Australia is coming near an end, with the last two projects — Shell’s Prelude and Inpex’s Ichthys — expected to start production late this year or early 2019, with total capacity of 12.5 million tonnes.

Image credit: ©iStockphoto.com/chinaface

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