Chris Skrewbowski on the dramatic shortage of new LNG mega projects

The LNG market currently presents users with a paradox. Demand is booming and rising numbers of countries are looking to LNG imports for increased security of supply and to cover emerging production shortfalls. Yet on the supply side virtually nothing has changed from a year ago in terms of plans for new liquefaction capacity, writes Chris Skrebowski.

The global LNG market currently presents a somewhat mixed picture. The great fear of recent years


Construction of regasification capacity and operational experience giving higher than anticipated throughputs have largely laid to rest fears about lack of regasification capacity. Current estimates are that European regasification capacity utilisation is in the 45% to 60% range. In the US lack of LNG import demand growth means current regasification capacity is more than adequate and operating at quite low utilisation rates. In fact, LNG imports in 2006, at 16.56bn cm, were below the 2005 level of 17.87bn cm (according to the BP Statistical Review of World Energy 2007).

The key liquefaction capacity side also presents a mixed picture. In 2006 all the expected new capacity came onstream as planned, with the Rasgas II train starting up in December 2006 rather than in early 2007 as previously expected.

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