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2019 could be a record year for LNG project sanctions

19/12/2018
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As we’ve written previously on EngineeringPro, the global LNG market is buoyant with multiple large-scale projects on the horizon, and it’s set to become even better in 2019 according to a new analysis from Wood Mackenzie. 

‘On the supply front… 2019 could be a record year for LNG project sanctions with over 220 mpta of gas targeting final investment decision (FID),’ states Wood Mackenzie’s analysis.
2019 could be a record year for LNG project sanctions with over 220 mpta of gas targeting final investment decision (FID).
(Image via Flickr user Ken Hodge).

Amongst those LNG projects expected to receive FID in 2019 include Russia’s $27 billion Arctic LNG-2, at least one project in Mozambique, and three in the USA. In the Asian region expansion and backfill projects in Australia and Papua New Guinea will also be approaching sanction.

From the demand side, things are also looking positive. Uncontracted demand from the world’s seven largest LNG buyers could quadruple to 80 million tonnes per annum (mmtpa) by 2030. These major buyers, which consist of CNOOC, CPC, JERA, KOGAS, PetroChina, Sinopec and Tokyo Gas, account for more than 50% of the global LNG market.

Demand largely from Asia is spurring the global LNG industry to action, “As China pushes on towards a lower-emission economy, its demand for gas and LNG has grown significantly and we expect the trend to continue in the longer term,” said Nicholas Browne, research director at Wood Mackenzie.

The analysis also points out that LNG suppliers will need to offer a variety of contracts to potential buyers as a way of continuing to meet their varied needs. As well as price, factors such as contract flexibility, index, source diversification, upstream participation and seasonality will all become important factors in purchasing decisions.

Browne elaborates, stating:

“Market liberalisation and uncertainty on longer-term demand in more mature markets, such as Japan, South Korea and Taiwan, will mean more room for spot and short-term purchases. While oil indexation will continue to dominate markets due to familiarity and ability to hedge, Asian buyers should be more inclined towards hub indexation to boost diversity and enable sales into Europe”.

“Looking forward, 2019 will be the biggest year ever, in terms of LNG capacity sanctioned, for liquefaction project FIDs. Asia’s major buyers will be at the forefront in ensuring this next generation of LNG supply is brought to market”.

Make 2019 the year you secure your next job

With 2019 shaping up to be a massive year for the LNG industry, now’s the time to start the search for your next contract or permanent position. Register for free today and we’ll alert you as soon as the latest LNG vacancies become available. You can also search our current positions now.
Tags: Oil & Gas
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Tonio Secci, 26 December 2018
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2019 could be a record year for LNG project sanctions - Time to read 3 min
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