With the commitment of the entire world towards achieving the objectives and terms of Paris COOP over climate change, the demand for natural gas is on the continuous rise. It is impossible to meet these targets without increasing usage of natural gas instead of coal for the generation of electric energy. And also where ever LNG can play a role in replacing petroleum products.
With the demand hitting the new high in the year 2013 the prices of the natural gas skyrocketed. Since the year 2014 number of developments have taken place in the LNG market. The International Energy Association (IEA), which is the independent energy advisor to the developed OECD nations, has stated in its recent forecast that, the gas demand will reduce for the fourth consecutive year in a row, further it mentions it will steadily decrease by about 1.5% up to the year 2021. Where in the demand for natural gas increasing at the rate of 2.5 % and approximately by 2.2% prior to that almost for a decade. LNG is becoming more relevant in the global supply and demand scenario of natural gas.
The numbers of countries switching over to LNG from crude oil are increasing rapidly. More than 50 countries are expected to join the fray. The total additional demand by these will be around 150 million metric tons per year (7.2 trillion cubic feet of gas) by 2025. That is approximately 61% of the present global demand.
LNG trade was 241.1 metric tons in the year 2014, mere 4.3 MT increase than 2013. The highest trade so far in the history of LNG was the year 2011 with 241.5 MT. The Pacific Basin, the largest source of demand, Japan contributing the most of it, while Qatar the largest LNG supplier. The LNG production capacity is also ramping up very fast and it is expected to have over production soon. Several front line LNG regions have emerged in past few years, it is expected that capacity of more than 750 MT LNG per annum will be added soon. Around 20 million tons of LNG over production expected by the year 2020.
Total 290 LNG productions projects in 70 countries are expected to be operational soon. With the United States also entering the market of LNG trade a big way and targeting Europe as the major consumer of the LNG produced, the market will be having fierce competition on the price front. With this in mind, many LNG exporters are entering into future contracts with the gas producers. The entire LNG industry is fearing of supply glut!