November 2019, Vol. 246, No. 11

Global News

LNG Investments Hit Record $50 Billion in 2019

Record investments of $50 billion have turned 2019 into a banner year for LNG, with Canada and the United States being the main drivers, the chief of the International Energy Agency (IEA) said. 

The industrial sector is Asia’s biggest driver of LNG growth, with China expected to overtake Japan as the world’s top importer of the fuel in five years, said Fatih Birol, the agency’s executive director.

“(Through June) this year, 2019 already broke the highest amount of (final investment decisions) for the first time ever, $50 billion,” he said during a conference in Tokyo.

More than 170 Bcm of natural gas liquefaction capacity is due to take a final investment decision this year, a record far surpassing the previous high in 2005 of 70 Bcm, according to the IEA.

The recent boost in contracting activity and project sanctioning follows the growing adoption of the equity offtake marketing structure, where companies have access to LNG volumes according to their equity stake, reducing the need for long-term sale and purchase agreements, the agency said in a report released this month.

European LNG imports also are expected to increase as domestic gas production declines and nations diversify supply. Natural gas production in Europe has halved over the past decade, increasing the call on other sources of flexibility, IEA said in a report last month.

The United States will make up two-thirds of global growth in LNG exports, which could turn pricing dynamics in Asia towards more gas-linked, rather than oil-linked LNG contracts, Birol said.

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