Global LNG trade increased 10% in 2017 to 290 million tonnes, or 38.2 Bcf/d, as Asian countries led demand growth and the U.S. and Australia contributed the most additional supply, according to an annual report from the International Group of Liquefied Natural Gas Importers.
Asia's LNG imports increased by 19.6 million tonnes, led by Japan and China, with China alone boosting its imports by 42%. U.S. LNG exporters in particular have had their eye on China, where demand has prevented a predicted global supply glut from lingering.
During President Donald Trump's November 2017 visit to China that included a group of energy executives, the developer of the offshore Delfin LNG project, which is awaiting a final investment decision, secured a nonbinding agreement with China Gas Holdings Ltd. for 3 million tonnes per annum for 15 years starting in 2022. The Alaska Gasline Development Corp. also walked away with a pact to jointly develop the $43 billion Alaska LNG export joint venture with China Petrochemical Corp., CIC Capital and Bank of China. In an October 2017 interview, meanwhile, LNG Ltd. CEO Greg Vesey said the company is courting China for firm contracts for its Magnolia LNG export project in Louisiana.
So far in 2018, Cheniere Energy Inc.'s February agreement to supply China National Petroleum Corp. with long-term gas volumes from its Corpus Christi terminal enabled the U.S. developer to recently sanction a third train at the Texas facility.

As LNG imports rose in every region except the Middle East, the report said, the U.S. also led the pack in customer diversification with 25 countries in 2017 compared to 13 in 2016.
New types of commercial arrangements emerged in 2017 as developers sought to best their competition, the report noted. Tellurian Inc. in April offered Japanese buyers five-year deals through the proposed Driftwood LNG export facility at a fixed $8/MMBtu, reflecting the pivot away from traditional 20-year contracts with Henry Hub-linked pricing, while Texas LNG LLC announced in October it will offer a natural gas liquefaction fee that moves with global LNG prices, potentially reducing the amount it charges buyers by 5% to 10%.
The report also highlighted the breakdown of the traditional LNG value chain, as aggregators that act as intermediaries between producers and consumers increased their market share to secure assets all along the LNG supply chain. Total SA's decision to buy Engie's upstream LNG assets for $1.49 billion, for one, signaled that portfolio players were taking advantage of a more liquid LNG market.
Still, International Group of Liquefied Natural Gas Importers President Jean-Marie Dauger cautioned against remaining complacent now that a global oversupply is no longer on the horizon, with analysts anticipating a "looming LNG shortfall" as early as 2023.
"Given the recent slow-down in [final investment decisions] in the last two years and the significant demand growth prospects, risks of a potential tightening of demand and supply must not be minimized for the medium term," he wrote in an editorial at the beginning of the report.
Dauger noted that compared to the two final investment decisions reached in 2016, only Mozambique's Coral FLNG project led by Eni SpA and Exxon Mobil Corp. was sanctioned in 2017.

