Trade volumes within the global liquid natural gas (LNG) market have been forecast to increase to 414 million tonnes in 2020, predominantly driven by the entrance of new players.
Last year saw trade fall within the LNG market after 30 years of consecutive growth. Global flows fell by 1.6% from 241.5MT in 2011, to 237.7MT in 2012.
Despite this decline in trade volume, capital investments continue to increase, with a predicted $557 billion likely to flow into the LNG industry between 2012 and 2020.
Liquefied natural gas is natural gas (predominantly methane) that has been converted to liquid form for ease of storage or transport.
LNG is principally used for transporting natural gas to markets, where it is regasified and distributed as pipeline natural gas. It can be used in natural gas vehicles, although it is more common to design vehicles to use compressed natural gas.
Its relatively high cost of production and the need to store it in expensive cryogenic tanks have hindered widespread commercial use.
Europe has been predicted to remain price sensitive over the coming years, while the share of spot markets in South and Central American LNG Imports will continue to soar in the short term future.
Asia Pacific has been forecast to remain the dominant player within the LNG market, predominantly due to an increase in imports from China and India.
Industry dynamics are expected to largely alter through 2020, with rapid changes expected in the medium to long term future. Over 110 companies are planning to foray into global LNG markets, further fragmenting the market structure and the competitive landscape.
After 2020, demand growth is expected to continue, albeit at a slightly slower pace (i.e., around 2% to 3% per year) as markets mature, demand shifts to more price-sensitive buyers, and some price subsidies.
For more information on the LNG market, see the latest research: LNG Market Research
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