Global LNG market trend

and European position

Takuro Yamamoto
LNG Analyst
International Energy Agency
Madrid, 17 March 2015

OECD/IEA 2013
OECD/IEA
2014

LNG is the only method to deliver

gas from continent to continent

(Source: GIIGNL)

OECD/IEA 2014

Global LNG trade started to stagnate

LNG import volumes by region, 2008 - 2014 (bcm)

Global LNG trade increased by 40% from 2008 to 2011, although it is stagnating
for past 4 years.
OECD/IEA 2014

The US shale production is one of the

biggest game changer
LNG import volumes vs shale gas production in the US, 2007 - 2014 (bcm)

LNG imports to the United States are shrinking yearly, only receiving 1.6 bcm in
2014 against 200 bcm of receiving capacity.
OECD/IEA 2014

Low utilization rate in Europe. Last

resort?
LNG import volumes vs import capacity in OECD Europe , 2010 - 2014 (bcm)

In spite of LNG import capacity increase, LNG import volumes are following
downward trend in Europe every year.
OECD/IEA 2014

Weak gas demand in Europe is

pushing out LNG away
LNG Re-export volumes in Europe, 2008 - 2013 (bcm)

10% of LNG imports to Europe was re-exported to other nations in 2013 without
receiving in its region.
OECD/IEA 2014

Asian LNG demand have seen a slow

down
LNG import volumes in major Asian countries, 2010 - 2014 (bcm)

Total import volumes of Japan and Korea have been stabilized as well as slower
growth in Chinese demand.
OECD/IEA 2014

Second wave of new additional supply

is coming soon
Additional LNG capacity , 2005 - 2015 (bcm)
70

Russia

60

Southeast Asia

Bcm

50

Qatar

40

Other ME

30

Latin America

20

Norway

10

Africa

0
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Australia

After four years of market tightening with few new LNG projects, second wave of
large LNG additional capacities are coming from this year.
OECD/IEA 2014

Australia is expected to become the

worlds largest LNG exporter
Top largest LNG exporters by 2020 (bcm)

17 new LNG projects with 175 bcm export capacity are under construction as of
today, with Australia and the US accounting for roughly 80% of total.
OECD/IEA 2014

Will Asian price and European price

converge?
Global gas price development in key regions, Apr 2009 - Feb 2015

Asian spot LNG price continued to slide in February and reached parity with
European gas prices for the first time in 4 years.
OECD/IEA 2014

Asia LNG spot price started to fall sharply

well before the drop in oil price
Oil price and LNG price development in 2014
USD/Mbtu
20

USD/bbl
140

18

120

16
100

14
12

80

10
60

8
6

Asian LNG Spot

40

Brent

20

2
0

0
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Cheap oil-indexed LNG from the new Australian contracts will further reduce
demand for spot LNG.
OECD/IEA 2014

USD/bbl

There seems to be a wait and see position

after recent oil price drop
140

120
100

DOE Approval
FERC Approval
LNG Contracts
Construction starts

80
Brent
60
40
20
0
Jan-12

Jan-13

Jan-14

Jan-15

It is likely that many LNG contracts for the new US LNG projects have been
made before recent oil price drop.
OECD/IEA 2014

Concluding remarks
2014 was a turning point in the global LNG market
after 3 years of tightening.
With new supplies coming from Australia and the US,
together with weaker Asian demand, probability of
LNG coming to Europe will increase.
Recent low oil price is favorable for many LNG buyers,
however there may be a delay in new export projects.
In Europe, security of supply is achieved through
supply diversity and LNG will continuously play an
important roll.
OECD/IEA 2014

Thank you very much for

your attention.

OECD/IEA 2013
OECD/IEA
2014