Fifty-five countries will have liquefied natural gas (LNG) terminals by the end of next year with a combined regasification capacity of 163 billion cubic feet per day (Bcfd), the U.S. Energy Information Administration has said. USA (EIA).
Capacity is expected to expand by 16 percent or 23 Bcfpd compared to 2022, with seven nations having their first import terminals, he said based on forecasts from the International LNG Importers Group and trade press.
In the first seven months of 2023, three countries began importing LNG for the first time: Germany, the Philippines and Vietnam, the EIA noted.
“By the end of next year, we expect Antigua, Australia, Cyprus and Nicaragua to start importing LNG,” he said. “Several other countries are in advanced stages of developing LNG import capacity.”
The EIA expects Asia to lead global regasification capacity growth in 2023 and 2024, at 52% or 11.9 Bcfpd. Europe would comprise 30% or 8.6 Bcfpd and the rest of the world 10% or 2.3 Bcfpd.
Most of the Asian expansion, at 8.5 Bcfpd, is expected to be in China. “China was the country with the most LNG imports in 2021, but its LNG imports declined in 2022, mainly due to the economic slowdown related to COVID-19,” the EIA said. “India expects 1.3 Bcf/d of LNG regasification capacity to come online by end-2023 with two new terminals: Dhamra LNG and Chhara LNG.”
In the new markets of the Philippines and Vietnam, additions of 1.1 Bcfpd are expected in 2023 and 0.1 Bcfpd in late 2024, respectively.
In Europe, lower pipeline natural gas imports from Russia would drive regasification capacity growth by a third in late 2024 compared to 2022, the EIA said.
“Germany began importing LNG this year as operators accelerated the build-out of regasification capacity using floating storage and regasification units,” with three terminals commissioned and three more under construction for a start-up expected by the end of 2023, he said. Germany’s LNG terminals can regasify up to 3.7 Bcfpd collectively, according to the EIA.
“Eleven more [European] “Cyprus is also expected to start importing LNG in 2024,” he added.
In the Americas, Brazil is expected to add 1.8 Bcfpd of regasification capacity by 2023, while Nicaragua and Antigua and Barbuda will add 0.1 Bcfpd as top LNG importers.
On the other hand, “Australia, while also one of the world’s three largest LNG exporters, will add 0.3 Bcf/d of regasification capacity through a new offshore terminal on its east coast,” he said. say the EIA.
Increased market insulation capacity
The decade to 2022 has seen global regasification capacity rise 49 percent to 140 Bcfpd in 48 countries, the EIA said.
While further expansion is expected, available regasification capacity has already exceeded LNG import volumes with only 39 percent of capacity used annually, according to the EIA, saying countries use excess capacity to store during periods of high demand.
“Spare regasification capacity, most of which is in Japan, South Korea and China, allows countries to cope with occasional peaks in demand, especially in winter,” he said. “Last year, global LNG trade used 37 percent of available regasification capacity, or 51.7 Bcf/d.”
Having more terminals in different parts of the world could also help stabilize LNG prices in the long term by achieving market integration, the International Monetary Fund (IMF) said in a May 23 report.
Natural gas has a “partially fragmented global market” because it relies primarily on pipelines for transportation, “unlike the crude oil market, which is more integrated and tends to trade at a single price in most places,” said the Washington-based lender. . “This fragmentation in the natural gas market means not only that prices differ between regions, but also that high prices in one part of the world are not necessarily passed on to buyers elsewhere.”
While unstable pricing formulas may still keep prices high for consumers despite expanded regasification capacity, the IMF said “truly global gas markets that are balanced across regions” in terms of regasification capacity help to limit price increases by protecting against supply shocks.
It said that “expansions in global LNG export capacity are needed to return European and Asian prices to historically normal levels in the long term.”
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