North America spearheads rise in LNG liquefaction growth: GlobalData

Global LNG capacity would more than double from 341 mtpa in 2015 to 811 mtpa by 2019 based on proposed natural gas liquefaction projects, according to research and consulting firm GlobalData.

The company’s latest report states that the scale of the North American project pipeline is unparalleled, totaling 32 individual liquefaction plants with over 287 mtpa of capacity through the end of the decade. Dramatic liquefaction capacity growth is also anticipated in Africa, Europe and Asia.

Matthew Jurecky, GlobalData’s Head of Oil & Gas Research and Consulting, says this massive infrastructure build-out in the U.S. is driven by unconventional gas in North America.

Jurecky explains, “Years of lobbying for regulatory approval and building out liquefaction capacity has paid off, and the global market will now have to make room for significant increasing volumes of North American gas.

“Shale operators in North America have eyed international markets since 2009, when BG Group entered into a joint venture with Exco Resources in the Haynesville shale. Shortly after, in 2010, the first application for an LNG export facility in the U.S. was made by Cheniere, before BG announced a long-term LNG sale and purchase agreement with Cheniere in 2011.

“With Shell acquiring BG in early 2015, the global LNG leader is now also lined up behind the emerging U.S. shale gas export market.”

Jurecky adds that the capital expenditure required to execute the planned global projects is estimated at approximately $700 billion, almost half of which is allocated to projects in North America.

The analyst also states that global LNG regasification capacity is expected to grow by around 50%, from 41 Tcf in 2015 to 60 Tcf by 2019.

Jurecky continues, “The massive growth in liquefaction is commensurate with the proposed growth in regasification capacity. Continued demand growth in Asia and an alternative to pipeline natural gas in Europe underlies the $34 billion in capital expenditure behind new LNG regasification projects.

“China and India will lead regasification additions, with a combined $20.6 billion proposed to increase regasification capacity by 7 Tcf in the two countries by 2019. In Europe, Canatxx LNG Limited is planning a massive LNG import terminal in the UK with a total capacity of over 1 Tcf.”

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