Global LNG Trade Shifts To 'Buyer's Market'

Liquefied natural gas (LNG) has been stagnant since May against the backdrop of continued oversupply in the oil and gas market due to the COVID-19 outbreak. Given the overall poor environment, it is widely believed that new LNG export projects will be hard to come by this year, which means that new LNG liquefication capacity may go to zero. However, the current LNG regasification capacity is on the rise and the growth rate is obvious. Regasification capacity is growing faster than expected, leading to a shift in LNG trade towards a buyer-led market.

Regasification capacity could hit a 10-year high

Despite the impact of coVID-19, the world is still on track to build 144m tonnes of LNG re-gasification capacity this year, the highest level in a decade, according to a new report from wood Mackenzie, a consultancy. Among them, Asia is still the main market of LNG re-gasification field.

Wood Mackenzie notes that 33 new terminals under construction this year are expected to add 92.8m tonnes of regasification capacity; In addition, another 51 million tons of capacity will be added at the terminal through capacity expansion, totaling nearly 144 million tons. China is expected to account for more than a third of the world's new re-gasification capacity.

The COVID-19 outbreak has disrupted much of the regasification capacity expansion, forcing delays in terminal, pipeline and other infrastructure, but Mr Wood Mackenzie expects seven final investment decisions to be made on regasification projects this year. So far this year, four terminals have started receiving LNG - SergipeLNG terminal in Brazil, MundraLNG terminal in India, SanJuan terminal in Puerto Rico and Thanlyin terminal in Myanmar.

Asia, the Middle East and Europe are the world's top three regasification growth markets, with global LNG regasification capacity expected to grow by 36% by 2023, more than half of which will be in Asia, according to industry data analyst GlobalData. And according to Wood Mackenzie's research, expansion projects in the Netherlands, Poland, France, Greece and The UK could add up to 13m tonnes of re-gasification capacity per year to Europe by 2025.

According to ResearchAndMarkets, global regasification capacity is expected to grow at an average annual rate of 5.7 per cent between 2019 and 2024. By country and market, China, Japan, South Korea, the US and Spain were the main drivers of regasification capacity growth, with the five countries accounting for about 63.2% of global regasification capacity last year. By equipment and devices, floating regasification devices have the greatest growth potential, with the market for floating LNG storage and regasification devices expected to grow at a compound annual growth rate of 8.7% between 2018 and 2026.

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