Fundamentals of The Global LNG Industry

Content

• Forewords
  • LNG, the way ahead.
    • Despite the many obstacles producers must overcome, particularly to satisfy demand at the right time, LNG remains the pre-eminent option for ensuring the expansion of the world's gas industry. By Marie-Franoise Chabrelie, secretary-general, Cedigaz
  • Sellers' market set to last.
    • The development of supply capacity is not keeping pace with demand, creating commercial dynamics that have significant implications for buyers and sellers. By Frank Harris, head of global LNG consulting, and Gavin Law, head of global gas and power, Wood Mackenzie
  • Towards a global reference price.
    • LNG is one of the fastest-growing energy markets. But although there has been movement towards a global reference price, the costs involved along the value chain suggest the commoditisation achieved in the oil sector is unlikely. By Michael Hurley, global LNG leader, Adrian Leaker, Pooya Alai, PWC
• Exporters
  • Australia
    • Woodside to lead LNG surge.
    • Debate and concern over climate change is an advertisement for natural gas, which has clear environmental advantages over other hydrocarbons. Australia, with its reservoirs of untapped gas, is ideally placed to become a significant player in the LNG market. By Jerome Maher, energy commentator and consultant
  • Brunei
    • Building for the future.
    • Brunei LNG, an early pioneer of the industry, is in the midst of an important phase of its history - extending the life of the export plant beyond 2013, when the long-term contracts expire. By Bahreen Dato Hamzah, marketing analyst, Brunei LNG
  • Equatorial Guinea
    • On the fast track.
    • By 2030, half of inter-regional gas trade will be in the form of LNG, according to the IEA. A new LNG plant about to come on stream in west Africa will play an important role this growing trade.
    • Export plans on track. With the world's second-largest gas reserves, Iran has the potential to become a leading industry player. Three LNG export projects have been proposed. By Hedayat Omidvar, research and technology department, National Iranian Gas Company
  • Nigeria
    • Moving into top gear.
    • After several failed attempts, Nigeria joined the league of LNG exporters in 1999 and has been expanding its operations ever since. A sixth liquefaction train is under construction and a seventh is planned. By Chris Haynes, managing director, Nigeria LNG
  • TTLNG
    • a new player.
    • TTLNG manages the state's holding in Atlantic LNG Train 4. How well it rises to the challenge could result in real value for the country and serve as a platform for increased involvement in the LNG business. By Hadyn Furlonge, assistant manager, LNG and investment analysis, National Gas Company
  • Yemen
    • Setting milestones.
    • As the country's largest-ever planned investment, the decision to launch Yemen LNG was an important milestone for both the country and the project shareholders. By Joel Fort, general manager, Yemen LNG
• Importers
  • Belgium
    • A bigger Zeebrugge.
    • Fluxys LNG is doubling the country's LNG import capacity to 7.2m t/y and with demand set to grow, the company is looking to provide extra capacity, on a yet-to-be constructed peninsula next to its existing Zeebrugge terminal. By Pascal de Buck, deputy director, Fluxys
  • China
    • Changing economics spur demand growth.
    • With the start-up of the Guangdong LNG terminal in June 2006, China entered a new phase in terms of its relationship with natural gas. By Akira Miyamoto and Chikako Ishiguro, Osaka Gas
  • UK
    • Going with the Grain.
    • The UK became a net gas importer in 2004. And with indigenous supplies diminishing and gas demand forecast to grow steadily - expected to rise by at least 15% over the next 10 years - dependence on imports will be approaching 50% by 2010 and 80% in 2014. LNG imports will be essential if the country is to meet its growing gas requirement, by Paul Sullivan commercial manager, Grain LNG.
  • US
    • The next wave.
    • LNG meets less than 3% of US gas supplies. To some, this suggests the limitations of the fuel as a source of supply; to others, it implies great opportunities. By Damien Gaul, industry economist, office of oil and gas, Energy Information Administration (EIA)
• Trading, marketing, storage and power generation
  • Industry evolution - the view of a portfolio player.
    • The industry continues to change apace. Recent years have seen the emergence of the portfolio player; companies building businesses based on full-chain capabilities, and multiple supply and market positions. By Martin Houston, executive vice-president, BG Group
  • Trading
    • The market evolves.
    • Prospects for the LNG market are positive. And, as it matures, it will develop many, although not all, of the characteristics of the more mature oil market. By Marta Hidalgo, manager, LNG business development, America/Russia, Repsol YPF
  • Gas quality
    • Markets in harmony.
    • The use of different gas-quality specifications in national markets could be a barrier to the import and free flow of gas throughout Europe and is a consideration when attracting new LNG supplies - from October 2010, there will be a pan-European standard. By Robert van Rede chairman, gas-quality harmonisation working group, EASEE-gas and area manager, Norway, Russia and UK, GasTerra
  • Achieving true market value.
    • Sellers in long-term contracts increasingly are using netback pricing to capture maximum profits. By Jacob Dweck, Thomas Warren and Chad Mills, partners, global LNG group, Sutherland Asbill & Brennan
• Shipping
  • Finance
    • A voyage through uncharted territory
    • Increasing competition has brought declining returns and greater risks for LNG shipowners, but the changing market presents an opportunity for shipowners willing to adapt their business model and strategy. By Mark Westley, head, global LNG shipping and Katan Hirachand, director, Socit Gnrale
  • CNG opens new markets
    • In September 2006, the American Bureau of Shipping granted full classification approval for Sea NG's Coselle CNG ship - the first of its kind to receive classification - bringing CNG marine transportation closer to commercialisation. By David Stenning, president and chief executive, and Thomas Mackey, associate engineer, Sea NG
  • The value of training
    • As the spot market develops and the shipping fleet grows new entrants will join the sector - both operators and vessel crews. All must learn the unique aspects of LNG operations and develop leadership skills. By Philip Wake, chief executive, The Nautical Institute
  • The training challenge
    • Not long ago, the transportation of LNG at cryogenic temperatures was regarded as akin to rocket science - and a hazardous profession. As more LNG is shipped this view is changing, but, training sufficient crew to man all the ships under construction is a stellar challenge. By Ravi Korivi, senior group vice-president, Eurasia
• Financing
  • Price volatility
    • easing the ride
    • The risk of gas-price volatility cannot be eliminated in long-term LNG sale-and-purchase agreements, but it can be mitigated and shared, providing opportunities for both parties to benefit. By Steven Miles, partner, and Jason Bennett, associate, Baker Botts
  • Islamic finance on the up
    • Islamic finance is big business. According to the IMF, there was only one Islamic finance institution in 1975, but there are now more than 300 with assets of more than $250bn, which are estimated to have a growth rate of more than 15% a year. By Craig Nethercott, partner, and Ed Hills, associate, energy infrastructure, project and asset finance group, White & Case
• Design and technology
  • A flawless approach
    • Project management and delivery are imperative in the growing LNG industry. By Peter de Wit, executive vice-president global business, Shell Gas & Power International, and Andrew Jamieson, executive vice-president, gas and projects, Shell Global Solutions International
  • NLNG Train 4 - an engineering benchmark
    • The NLNGplus project added two 4.1m t/y production trains at Nigeria LNG's Bonny Island facility, almost doubling plant capacity. The expansion was one of the largest construction projects ever executed in Africa and has set a performance benchmark for future mega-projects. By Pete Rano, Chicago Bridge & Iron
  • Taking the small option
    • Increasing environmental awareness means policy makers are looking to supply gas to smaller demand centres, such as some of the larger islands in the Mediterranean and Caribbean. David Haynes, principal consultant, and Paul Martin, consultant, Advantica, examine the challenges of developing small import terminals
  • Containment strategies
    • Three types of storage exist for natural gas
    • export, import and LNG peaking facilities. Tanks are also classified into three main groups
    • self-standing, membrane and pre-loaded. But technologies are constantly evolving. By Boumdienne Bendaoud, project engineer, Saipem
  • Building confidence
    • In the fast-growing LNG market, the safety, reliability and functionality of new technologies is increasingly important. Technology qualification will be crucial in deciding the offshore concepts that can be brought into service. By Hans Kristian Danielsen, business development leader, LNG and Maria Fre, senior engineer, Det Norske Veritas
• World LNG Map
• Statistics