This is good news for Appalachian Basin E&P Companies. As the pipelines get built, there is a market for their gas. With a very warm winter, the global opportunities for LNG will offset the warm winter. The global market and cracker plants will drive the production of NatGas in the Appalachian Basin.
There is no evidence of a liquefied natural gas (LNG) glut and LNG markets are expected to keep growing, Royal Dutch Shell states in a new report.
Global demand for LNG reached 265 million tons in 2016, enough to power about 500 million homes. That represented an increase in net LNG imports of 17 million tons, or 6.4%.
Many had expected a strong increase in new LNG supplies in 2016 would outpace demand growth, but that didn’t happen, Kallanish Energy has learned.
Instead demand growth kept pace with supply as greater-than-expected demand in Asia and the Middle East absorbed the increase in supply from Australia, according to Shell’s first LNG Outlook.
“Global LNG trade demonstrated its flexibility time and again in 2016, responding to shortfalls and regional gas supply and to new emerging demand,” said Maarten Wetselaar, Shell’s integrated gas and new energies director, in a statement.
“The outlook for LNG demand is set to grow at twice the rate of gas demand, at 4% to 5% a year between 2015 and 2030,” he added.
China and India were two of the fastest-growing buyers and the two countries are poised to continue driving a rise in demand. Together, China and India increased their LNG imports by 11.9 million tons in 2016. That boosted China’s LNG imports in 2016 to 27 million tons and India’s to 20 million tons, said Shell, an LNG player.
Total global LNG demand grew with the addition of six new importing countries since 2015, it said, including Columbia, Egypt, Jamaica, Jordan, Pakistan and Poland. They bring the number of LNG importing countries to 35, up from roughly10 in 2000.
Egypt, Jordan and Pakistan were among the fastest-growing LNG importers in 2016. Due to local shortages in gas supplies, they together imported 13.9 million tons of LNG.
According to Shell, the bulk of LNG export growth in 2016 came from Australia, where exports grew by 15 million tons, to 44.3 million tons. In the U.S., the Sabine Pass terminal in Louisiana exported 2.9 million tons last year.
Shell said additional investments will be needed after 2020 to meet growing LNG demand from Asia.
In China, a government target has been set for gas to make up 15% of the country’s energy mix by 2030, up from 5% in 2015. Southeast Asia, including Malaysia and Indonesia, will also become a major LNG importer by 2035, Shell said.