Global regasification capacity has reached a high of 824 million tonnes per annum, showing the sector is well placed for a resumption of normal trading activity in the months ahead, while more than a dozen new importing nations are planning LNG terminals for energy security and growth.
The global buildout of import terminals and floating facilities is continuing on its upward path set in recent years.
While the growth in regasification capacity was primarily centred in existing LNG markets, two new LNG importers, Bangladesh, Bahrain and Panama, then joined the fold and new terminals have also been added in China, Japan and Turkey.
China was a particular source of growth, completing four new terminals and expansions in the past year and planning a mega-import and storage facility at Tianjin port, east of Beijing.
The global market’s largest levels of regasification capacity are located in the Asia and Asia-Pacific regions.
The two regions are anticipated to continue their high rates of capacity expansion moving forward.
Despite having high levels of existing regasification capacity, Latin America has not experienced capacity growth in recent years outside of small-scale projects in the Caribbean region, though this is changing with new Brazilian projects focusing on power generation and small-scale distribution.
Latin American nations such as Nicaragua and El Salvador are also planning import ventures.
They will be joined by at least a dozen other countries in the next two or three years, including Australia, Croatia, Cyprus, Ghana, the Ivory Coast, the Philippines, Vietnam, South Africa, Lebanon and Germany.
The introduction of floating storage and regasification units have allowed several new markets to access the LNG market over the last decade, especially in the Middle East, Asia, and Latin America.
Indeed, Bangladesh’s first two regasification terminals are FSRUs and other facilities are planned.
FSRUs will continue to play an important role in bringing LNG imports to new markets quickly, provided there is sufficient pipeline and offloading infrastructure in place.
However, while construction timelines are typically longer at onshore regasification terminals, they offer the stability of a permanent, larger-scale solution and thus will continue to be important to accommodate the needs of growing LNG importers.
The majority of near-term regasification capacity growth is still expected to occur in established importing markets, particularly in Asia through additions in China, India and elsewhere in the region.
Many new LNG importers are lining up so that they will add a significant aggregate capacity volume in the future.
China is still expected to be a crucial part of the LNG market in 2020 and beyond.
Chinese natural gas demand is forecast to more than double over the next two decades, rising by 370 billion cubic metres, more than the rest of the developing Asian economies combined.
There is now a strong drive in Beijing to use gas to reduce residential and industrial coal demand to improve air quality and reduce harmful emissions.
Considerable LNG potential remains in the Chinese market where natural gas use currently accounts for 7 percent of total industrial energy demand compared with a global average of 22 percent, while only 12 percent of residential heating demand is met by gas in China.
Although gas competes with electricity and the direct use of renewables in displacing coal in these sectors, its market share in industry and heat demand for buildings is expected to more than double through 2040.
By then, China will be consuming 650 Bcm of gas, with the share of gas in the total energy mix reaching 13 percent, which would still be well below the current global average.