Global liquefied natural gas (LNG) markets are set to tighten and prices are likely to increase over the next two to three years as supplies rise more slowly than appetite from a growing number of importers.
By transforming gas from its natural state into LNG, it can be delivered via tanker from distant production areas to markets that need it. Given its flexibility, environmental benefits and large resource base, LNG is a natural choice to help meet the world's growing energy needs.
A large expansion in global LNG trade is currently under way, and Australia is likely to emerge as the second largest supplier globally in coming years.
The global market for LNG is of growing importance to the Australian economy. In recent years, significant investments in LNG production have been committed, with projects under construction currently totalling around A$120 billion. If these projects proceed as planned, Australia's LNG exports are likely to increase more than three-fold over the next five years.
The entrance of the US within the LNG export market, expected in 2015, is also expected to play a key role in this industry. Already in the possession of massive import infrastructure, the planned construction of a substantial export infrastructure will mean the US will be able to buy and sell LNG in huge quantities.
Unconventional natural gas production within the US has already increased to 20% of domestic supply from 5% in 2008, with 40% anticipated by 2020.
Globally, 12 countries including Australia, Papua New Guinea, the US, Russia and Venezuela are planning new terminals. If all the planned liquefaction terminals are realised, the industry will have large supply capacity, of 555 million tons per annum (mtpa) by 2020.
For more information on the global liquefied natural gas market, see the latest research: Global Liquefied Natural Gas Market Report
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