Global LNG trade growth is expected to slow to 4% this year, from a year-on-year growth of 6% seen in 2021.
This forecast appeared in the International Energy Agency’s (IEA) latest quarterly gas market report, analysed by S&P Global Platts.
Last year’s Asian LNG demand expansion is projected to moderate and the drought-driven rise in South American imports will cease.
However, Asia will account for all LNG imports net growth in 2022, the IEA said.
China remains the largest contributor to import growth, but its growth rate will drop to 9% in 2022, due to the ramp-up of Russian pipeline flows and the overall slowdown in gas demand growth.
India's LNG imports are projected to return to 2020 levels after a temporary dip in 2021, registering a 12% increase this year.
Emerging Asia LNG imports are due to expand by 27% this year, driven by a post-pandemic demand recovery, domestic production declines and planned import capacity additions.
European LNG imports are also expected to remain high, although likely below 2019/2021 levels -- to meet the region's storage restocking needs.
Currently, stocks are said to be around 39% of capacity.
Middle East import growth during 2022 is expected to be 11%, partly boosted by Kuwait's new Al-Zour terminal, while in Africa, imports will be fuelled by the emergence of new importing countries - Ghana, South Africa and Senegal.
This year’s LNG export growth will remain dominated by North America, which will account for more than 75% of the global LNG supply net increase.
The commercial start up of Sabine Pass Train 6 and the Calcasieu Pass terminal, both ahead of schedule, are the main contributors to a 16% increase in US LNG production this year, the agency said.
Supply problems
Inadequate supply tightened LNG markets in 2021, due to LNG capacity outages and upstream under performance, some of which was caused by temporary unplanned issues and disruption to maintenance schedules, due to COVID-19 in 2020.
Last year’s tight market led to record high spot LNG prices. The benchmark JKM spot Asian LNG price rose to an all-time high of $56.33 per MMBtu in October.
Prices have since softened, with the JKM assessed on 31st January at $27.92 per MMBtu.
The IEA also said that adequate gas supply could be a cause for concern in the medium term, due to a combination of recent LNG project delays, the relatively small number of new LNG FIDs in 2020/2021 and a decline in upstream spending since the early 2010s.
The most visible sign of supply under performance was the high level of LNG capacity outages, which spiked in 2020 and remained high throughout 2021, the agency said.
About half of the LNG volumes lost to unplanned outages in 2021, excluding the long-term disruption in Yemen, was due to upstream issues limiting feedgas availability, with the most severe incidents occurring in Nigeria, Trinidad and Tobago, and Malaysia.
Project delays could further limit supply availability in the next few years.
Of the nearly 190 bill cu m of nameplate liquefaction capacity under construction in early 2021, about 20% was ahead of schedule by an average of eight months, 35% was on time and 45% was delayed by an average of 14 months, the agency said.
Delays are especially pronounced for projects that were initially targeting full capacity by 2024, including LNG Canada, Mozambique LNG and Golden Pass in the US.
However, the agency added that high and volatile spot LNG prices and the recent rise in LNG contracting activity, could result in additional FIDs.
