Supply and pricing upheavals thrust LNG industry into uncharted territory By Alex Forbes
The LNG industry is no stranger to change.
new supply projects? How will the Paris
Over the past two decades it has grown
Agreement on climate impact demand? And
astonishingly quickly. From being a niche fuel
perhaps the biggest question of all: will
serving mostly a handful of markets without
Europe’s gas market now become the
access to pipeline gas, LNG has become a
battleground that determines the future of not
mainstream source of natural gas supply,
just LNG but the whole gas industry?
accounting for a growing share of inter-
In 1998 – when I travelled to the Australian
regional trade. Today, however, the industry
city of Perth to attend the LNG 12 conference,
faces unprecedented uncertainties. As its major
the last time it was held there – global
players converge on Perth, Australia for LNG 18
production of LNG was around 90 million
– the triennial conference that is the industry’s
tonnes. By last year, according to preliminary
largest gathering – they face big questions:
data from Gas Strategies, output had grown to
How will markets react to the new waves of
almost 250 million tonnes. This near-trebling of
supply coming from Australia and the US?
production represents an average annual
What impact will the oil price collapse
growth rate of 6%.
ultimately have on gas/LNG pricing? What are the prospects for final investment decisions on
And there is plenty more growth to come. As numerous new liquefaction projects come
v Due to start up in mid-2017, the Wheatstone LNG project will form part of the remarkable growth in Australian liquefaction capacity.
112 S u p p l y a n d p r i c i n g u p h e a v a l s t h r u s t L N G i n d u s t r y i n t o u n c h a r t e d t e r r i t o r y
