Business GNL

LNG market: increased production in 2017 and excellent prospects for 2018

22/01/18

In 2017, world LNG production increased by over 10% in accordance with forecasts. As a result, new countries have become increasingly interested in this form of energy.

Production increased due to the commissioning of production units in the United States, Australia, and the Arctic (Russia) as well as Indonesia, where the country opened its first floating liquefaction plant.

These new liquefaction units throughout the world should result in another 10% increase in LNG production in 2018. "This is encouraging news for the Dunkerque LNG terminal, whose goal is to double the number of vessels this year", says Christophe Liaud, Sales Director of Dunkerque LNG.

"The markets are also anticipating increased interest in LNG. This has been confirmed through significant demand in Asia, especially in China, Thailand and a lesser extent in India. This forecast also proved true for European countries, particularly Italy, Spain, and France. It was less applicable in countries in north-western Europe", explains Christophe Liaud. "Countries like Malta, Pakistan, and Colombia have started importing LNG. This rise in demand, coupled with a rise in production, has resulted in a significant increase in maritime traffic between points of production and points of sale". 

At the end of 2017, the LNG market saw the decoupling of prices between Europe and Asia. "Prices are now higher in Asia than in Europe. The high demand for LNG on the continent has also resulted to an increase of the demand for vessel loading services in north-western Europe, primarily in France, the Netherlands, and Great Britain, with the goal of offloading the LNG in Asia. This is great news for our terminal", explains the Dunkerque LNG sales director.

The other good surprise of the year is the amount of interest coming from cruise lines, ship builders, and shippers for LNG fuel, which is a cleaner form of energy than heavy fuel oil. "CMA-CGM, one of the world's largest shipbuilders, just ordered nine LNG-powered container ships. A cruise line also started construction on a cruise ship that runs on LNG in the Saint-Nazaire shipyard. Brittany Ferries is set to commission a LNG-powered vessel in the near future as well. These are great news for the Dunkerque LNG terminal, which is currently building a LNG truck-loading station in response to this promising market", adds Christophe Liaud. 

In addition, new liquefaction plants will soon start up production. Most of these units are located in Australia as well in Russia or in the United States. The surprise of 2018 might come from Egypt, which is in the process of switching from being a major importer to an exporter of LNG. What is sure is that the 10% increase will have to address demand outside of Europe, because consumption on the continent remains stable and can also be offset by existing gas networks.

The good news for 2018 is the arrival of LNG from Yamal in Siberia to northern European terminals. At the terminal, the LNG from these icebreaker vessels will be offloaded and transferred to so-called traditional vessels, which will then travel on to the final destination, specifically Asia. In fact, the Dunkirk terminal is expecting a vessel from Yamal on the 25th of January 2018. Another ship travelling to Asia will be resupplied on the 27th of January. "We are building a rapid ship reloading station for exactly this kind of service. It will allow us to increase our fueling rate to 8,000 m3/hour, thereby reducing the layover time from 48 hours to 24 hours. It will also make us competitive with other terminals in northern Europe", says Christophe Liaud.

In 2017, during its first year of operation, the Dunkerque LNG terminal serviced ten vessels from Norway, Peru, and Qatar. "Our goal is to at least double our traffic in 2018. Between promising forecasts and the creation of a single gas market in France, it should be possible", concludes Christophe Liaud. 

Article présenté sur la lettre d'information : Janvier 2018