Global LNG market to reach $65 billion by 2012: CERA report

Washington (Platts)--12Jun2006

Short-and long-term global liquefied natural gas supply is building
strongly on the way to becoming a more than $65 billion dollar market that
meets 15% of the world's natural gas demand by 2012, despite some "operating
problems and teething start-ups," Cambridge Energy Research Associates said in
a report Monday.
"CERA's 2004 projection that the LNG industry would grow in the eight
years to 2012 by the same amount as in the first 40 years of its history now
looks, if anything, overly cautious," CERA's Senior Director for Global LNG
Michael Stoppard said in the report, "Progress in the Face of Adversity."
"The industry will probably double in six or seven years relative to
2004," he added.
More than 25 million metric tons of new liquefaction capacity has been
commissioned since October, adding 18% to global capacity, according to
Stoppard. For 2006, even under the most conservative scenario, LNG trade is
projected to grow to 159 mt, up 12%, compared with 2005, with US imports
rising by almost 25%, the report added.
CERA said its research counters the view that global LNG growth is
stalling. Based only on projects currently under construction, CERA said
global LNG supply capacity will rise 60% by 2012 or earlier, with almost half
the construction occurring in one country and on a single site--Ras Laffan in
Qatar.
The combined capacity of Qatari LNG investments focused just on the US is
broadly equivalent to the proposed capacity of the Alaskan pipeline, the
report said. "The LNG industry is now focusing on the next generation of
supply beyond Qatar where the challenges--technological, cost, and
political--will be greater but not insurmountable," CERA said.
"The strain of growth globally is starting to show," CERA said in the
report, adding that "evidence is mounting of cost inflation and budget
overruns, of project delays and operational hiccups, of shortages of
specialized labor and expanding lead times for specialty parts--and all this
within a broader context of more strained global geopolitics."
The consulting firm added that LNG projects are facing rapidly escalating
costs. "Much of the upward pressure on costs is linked to a more general
inflationary trend across the oil and gas industry. Part of it is exacerbated
by characteristics more specific to LNG, notably shortages of key specialty
materials, and a select set of engineering, procurement, and construction
companies with proven track records on large-scale LNG projects."

For similar stories, request a free trial to Platts LNG Daily at
http://www.platts.com/Request%20More%20Information/


 

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.