GPA '18: Freeport LNG manager shares US, global LNG outlooks

AUSTIN—On Day 2 of the 2018 GPA Midstream Annual Convention, Adam Valentine, Senior Manager of Commercial Operations for Freeport LNG, shared his outlook for North American and global LNG supply and demand through 2030.

Tightening US market after 2020? Final investment decisions (FIDs) were made for 16 new US LNG trains in 2015, Valentine said, but FIDs have slowed since that time. However, the market landscape is changing.

Given that most major onshore LNG projects have a five-year development timeline, Valentine forecasts a lag in supply that will pave the way for a potential tightening of the market after 2020, especially on the US Gulf Coast (USGC). To sustain expected long-term industry average growth over the next decade, approximately 15 Mtpy of new liquefaction capacity will be needed.

Worldwide LNG market trends. Freeport forecasts that, by 2025, the world will need an incremental 100 Mtpy of liquefaction capacity to meet demand. Countries that will help meet this demand include Qatar, which is undertaking brownfield LNG export capacity expansions, as well as Russia and West Africa. "And there's absolutely some room for US LNG" in the global supply picture, Valentine said.

Asia will be the area to watch for LNG demand through 2026. The world saw a 12% increase in LNG demand between 2016 and 2017; China alone marked 50% year-over-year growth during this time period. Freeport expects significant double-digit growth from China for at least the next 3 yr.

In 2019, more LNG will come online than in any previous year in the industry, Valentine said. However, US LNG will still be profitable for delivery to Asia. Between 2015 and 2018, the number of LNG buyers in Asia has quadrupled on the back of sustained, structural demand growth, along with deregulation in China, South Korea and other markets.

 

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