Editorial comment

Adrienne Blume, Editor

As of early 2016, approximately 140 metric MMtpy of LNG capacity were under construction. Of this volume, 62 metric MMtpy are located in the US and 50 metric MMtpy are in Australia. A total of 42 metric MMtpy of LNG capacity are slated for commercial startup in 2016.

Nearly half of the remaining 98 metric MMtpy of LNG capacity under construction are tentatively scheduled to come online by the end of 2019. Approximately 448 metric MMtpy of liquefaction capacity could be in operation by 2020, representing a 40% boost in worldwide LNG output over a five-year period.

The large volume of LNG capacity starting up will create an oversupply that could last until 2024. This overhang could also weigh on final investment decisions for LNG projects through the end of 2017.

Despite the potential for an oversupply of LNG, liquefaction terminal and FLNG vessel projects will continue to be approved and constructed. The need for LNG imports will grow in South America, Asia and Europe, and the booms in natural gas production in North America and the Pacific will continue to drive export opportunities.

Successful LNG and FLNG projects will take advantage of optimized engineering and design to lower the complexity and costs of LNG production facilities, as discussed in this issue's Special Focus on LNG technology. For more LNG/FLNG spending, construction, trade and technology analyses and forecasts, see Hydrocarbon Processing’s HPI Market Data 2017 annual report, available in October. GP