While the majority of discussion around LNG as a transport fuel has been in mature markets to date the medium term opportunities for developing countries are starting to grow. A diverse group of nations from Nigeria to Trinidad & Tobago are now capitalising on LNG as a fuel source as investment interest strengthens.
The Philippines and Vietnam are two of the latest countries to begin LNG imports this year, while the US Energy Information Administration (EIA) predicts that the Caribbean nation of Antigua and the Central American country of Nicaragua will follow suit by the end of 2024.
“Both Nicaragua and Antigua and Barbuda will become new LNG importers, with a combined regasification capacity of 0.1 billion cubic feet per day (Bcf/d),” Victoria Zaretskaya, lead operations research analyst at the EIA, states. “Several more countries are in advanced stages of developing LNG import capacity.”
Logistics group Atlantic Gulf & Pacific (AG&P) received the first LNG cargoes in the Philippines in April, launching operations at the country’s first LNG import terminal. The tanker vessel Golar Glacier, completed a ship-to-ship LNG transfer to the floating storage unit (FSU) ISH. The FSU has a peak LNG loading rate of 10,000 cbm/hr and a discharge-to-shore peak rate of 8,000 cbm/hr.
Vietnam’s first shipment of LNG meanwhile was purchased by PetroVietnam Gas JSC and delivered in June and July. This followed the release of the country’s latest power development plan in May, which brought a renewed focus on wind and LNG for the period through to 2030.
Emerging market benefits
For those developing countries that do not have domestic natural gas resources, the prospect of LNG imports has been prohibitively expensive in recent years as soaring demand has driven up prices. Now that this pressure is waning somewhat however the prospect for new regasification projects to support the energy transition is improving.
"The return of LNG prices to more normalized levels benefits emerging markets the most, as their energy affordability and availability was most impacted by the LNG price spikes last year," Saul Kavonic, a energy analyst at Credit Suisse, notes. "Emerging markets, particularly in south and Southeast Asia, are the core drivers of LNG demand growth over the next 10 years."
EIA figures corroborate this view, predicting that Asia will continue to lead growth in global regasification capacity, accounting for 52% (11.9 Bcf/d) of the total capacity additions in 2023 and 2024. Europe will account for 38%, and the rest of the world for 10% (2.3 Bcf/d).
“Several developing countries are eyeing medium-term opportunities for their own LNG production: namely, Senegal, Mauritania, Mozambique, and Tanzania in Africa, and Trinidad & Tobago in the Caribbean,” Alejandra Padín-Dujon of Columbia University says, adding that the contributions “that African and Caribbean countries intend to make the LNG landscape are underreported, but not trivial.”
Looking ahead, the growth of LNG in developing countries, may spur a profound transformation in coming years but downside risks remain with Padín-Dujon noting that LNG is still a politically risky bet for aspiring producers in Africa and the Caribbean.
