Photo of Paris 2015 Copyright: ESA

LIQUEFIED natural gas

Global liquefied natural gas (LNG) demand has risen an estimated 7.6% per year since 2000 — a rate almost three times faster than global natural gas demand, which is estimated to have grown by about 2.7% per year over the same period. Between 2015 and 2020, Moody’s Investors Service estimates that Japan will remain the largest importer of LNG and will account for roughly one third of the global LNG market (with South Korea holding steady as the second largest importer). Additionally, China, India, the Middle East, Europe and South America are becoming players in the LNG demand market as well; however, these demand centers tend to have more available competitive energy options, including coal, oil and other sources of natural gas, and will generally be more price sensitive and less likely to willingly pay supply security premiums than the other markets.

Adding fuel to the fire, LNG demand is expected to average annual growth of around 5% to 6% per year through 2020 (and is anticipated to continue to grow after 2020 at a slightly lower rate). In response to this rising demand, more than 30 countries have proposed plans to build or add LNG import/re-gasification capacity. By 2020, the number of countries with import capacity is projected to double from the 25 countries with import capacity today.

As a natural response to this steady increase in demand, US companies, with access to relatively cheap natural gas, are clamoring to assume a role in providing LNG exports to these premium markets. (Source: Ernst & Young "US LNG Exports Driven By Demand")

As the distances between major gas-producing and consuming regions increase, this expansion is set to continue in a very significant manner.