London — Global LNG trade in 2016 reached a record 258 million mt, up 5% from2015, according to the International Gas Union's 2017 World LNG Reportpublished Wednesday.
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LNG trade expanded by an average of only 0.5% a year over the previousfour years, the IGU said.
Short- and medium-term LNG trade grew by only 0.56% in 2016 to 72.3million mt, accounting for 28% of total trade.
The report said: "the share of LNG traded without a long-term contract asa percentage of the global market has tapered off since 2013. Short andmedium-term trade, as a share of total traded LNG, fell by 4%."
This reflects partly the existence of long-term contracts for the new LNGcapacity that has come on stream in the last 12 months, as well as the spikecaused in short- and medium-term LNG trade in the aftermath of the 2011Fukushima nuclear disaster in Japan and the later onset of drought conditionsin Latin America.
The increase in overall LNG trade can be attributed to a significant risein new supply, said the IGU, owing to the start of exports from the US Gulf ofMexico and Australia Pacific LNG, among other projects.
The report also notes significant rises in demand, most notably fromAsian markets; China's LNG consumption rose by roughly 35% to 27 million mt in2016, the report said.
However, it also notes that some markets, including Japan and South Koreaas the two largest, may have passed peak LNG demand as other forms of energycome to the fore.
A resurgence in hydropower in Brazil reduced demand for LNG there by 80%,it added.
Total liquefaction capacity was put at 339.7 million mt/year in 2016, anaddition of 35 million mt. The IGU estimates that 114.6 million mt of newcapacity was under construction as of January 2017, indicating LNG supply willcontinue to rise rapidly in coming years.
However, the capacity of projects entering the construction pipeline haveslowed. Two projects entered the construction phase of development in 2016: abrownfield expansion of Tangguh LNG (3.8 million mt/year) in Indonesia, and anadditional US project, Elba Island LNG (2.5 million mt/year).
The report estimates proposed LNG capacity at 879 million mt, down from890 million mt in January 2016, noting that there is insufficient demand formost of these projects to go ahead.
Global regasification capacity was put at 794.6 million mt/year as ofJanuary 2017, up from 776.8 million mt/year in January 2016, added mainly inexisting markets.
In contrast, 2016 mainly saw the addition of new gasification capacity innew markets, such as Egypt, Jordan and Pakistan.
Floating facilities account for 83 million mt/year of regasificationcapacity globally, the IGU said.
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