LNG Investment Swings to North America – Global Capex to Total $284 billion
The LNG industry is undergoing a dramatic transformation. North American activity (the majority of which is committed spend) is driving a return to growth in global capital expenditure. A wave of new LNG carrier newbuilds will also be required to support a huge increase in traded base-load LNG volumes. Douglas-Westwood (DW) forecast global LNG expenditure to total $284 billion (bn) between 2017 and 2021. This represents a 50% growth compared with the preceding five-year period.
Liquefaction terminals will remain the principal driver of expenditure with spend in the segment totalling $192bn. This will subsequently lead to a 42% increase in liquefaction capacity by the end of the forecast period. Despite challenging times for shipyards, with only four LNG carriers ordered in 2016 (YTD) – unit orders are expected to bounce back in the near-term. Over 150 additional carriers yet to be ordered are likely to be required for additional export capacity coming onstream in the latter years of the forecast. Overall we expect expenditure on LNG carriers will represent 19% of global expenditure.
As the final set of Australian LNG projects start operating in 2017, global LNG expenditure will be concentrated in North America. This regional swing in investment will result in the United States (US) & Canada accounting for 17% of global liquefaction capacity by 2021 – with capex totalling $105bn, 36% of global expenditure over the forecast period. Of the six liquefaction terminals in the US, four of the facilities are currently under construction, with additional trains to be added before the end of the period. Beyond the forecast, some export terminals currently in the planning and approval stages will continue to support expenditure. We have, however, taken a conservative view on additional projects, given the current economic climate, and expect many of the early-stage projects not to progress past the initial planning/consent phase.
Over the long-term, LNG demand will continue to grow, as countries seek to diversify their energy supply. It is expected that delays in committing to new nuclear capacity and limitations of renewable technology in base-load applications will support continued newbuild of combined-cycle gas power plants. This, in addition to declining local production in some key consumer nations, will be a compelling driver for continued investment in these capital intensive projects.
The World LNG Market Forecast 2017-2021 examines trends in the LNG market by region and facility type, supported by analysis, insight and industry consultation. Areas of focus include:
- Drivers & indicators – a review of the factors influencing the LNG market, including growing global energy demand; environmental concerns and sustainable energy; oil & gas prices; majors’ production profiles; E&P costs, local content and geopolitics; drilling & production; diversification of supply and unconventionals.
- Overview of the LNG industry – the LNG chain, major players, contracting practices, spot cargoes and current pricing.
- Supply & demand – outlook, trade flows, future pricing, applications, regional gas & LNG markets and unconventional gas: threat or a feedstock for LNG?
- Supply chain & contractors – EPC contractor market share analysis, construction, liquefaction technology market and regasification.
- Transportation – LNG carrier fleet and vessel owners, designs for containment systems & propulsion; plus a review of shipyards and shipbuilding.
- Offshore LNG – liquefaction and regasification terminals.
- Regional analysis – comprehensive examination, analysis and ten-year view of the market, with historic data covering the period 2012-2016 and forecast data for 2017-2021. Capital expenditure by facility type (carrier, import and liquefaction) and region. Liquefaction market in terms of Capex and/or capacity (new and cumulative) by region, new developments and expansion projects, components and work scopes. LNG carrier market in terms of expenditure and newbuild units by region. Import market in terms of Capex and/or capacity by region, new developments and expansion projects, components and work scopes.
Why purchase the World LNG Market Forecast?
DW’s market forecasting is trusted by sector players worldwide, with clients including the world’s top-10 oil & gas companies, top-10 oilfield services companies and top-10 private equity firms.
The report is essential for design engineering houses, engineering, procurement and construction contractors, technology providers, shipping companies, LNG vessel owners, shipbuilders, oil & gas operators, gas utilities, financial institutions and government agencies & departments wanting to make more informed investment decisions.
Our proven approach includes:
- Unique and proprietary data – updated year-round from published sources and insight gained from industry consultation.
- Detailed methodology – the report uses research from DW’s proprietary ‘World LNG Projects Database’, an in-house information system exclusive to DW. Our global analyst team is involved in the gathering and analysis of the LNG market data through primary research and professional networks. A project-by-project review of development prospects drives a data-rich market model and forecast; with the timing of expenditure phased to reflect the commercial structures of likely projects.
- Concise report layout – consistent with DW’s commitment to delivering value for our clients, all of our market forecasts have a concise layout consisting of industry background and supporting materials condensed to enable quick review with ‘speed-read’ summaries of key points throughout.