Image courtesy of Wood MackenzieThe year 2019 could be a major one for final investment decisions (FID) on new liquefied natural gas projects, according to the research and consultancy group Wood Mackenzie.
With strong demand growth signals, the supply is bound to respond, the consultancy said.
“After a dearth of new greenfield LNG project sanctions in recent years, suppliers are now positioning to grow. The FID of LNG Canada in October 2018, was the first major greenfield project to move ahead since 2015,” WoodMac said.
The noted the year 2019 will be a major one in terms of FIDs as projects in Russia, Qatar, Mozambique as well as the United States get sanctioned.
The majority of the demand growth will come from Asia, driven by China that has been responsible for 50 percent of this year’s global demand growth. It is also expected that Chinese LNG demand is expected to continue growing.
In total, Asia-Pacific LNG demand is set to grow a further 60 percent to reach 337 mmtpa by 2030. By comparison, the rest of the global market is only 75 mmtpa currently.
Speaking of the current year, the consultancy said 2018 has already revealed a big step-up in the scale of new upstream project investments across both oil and gas, and this trend has filtered through to Asia-Pacific as well.
While the number of developments being sanctioned is similar to 2017 on a year-on-year basis, the key change is the size of fields getting the green light. The average project to hit FID in 2018 is over twice the size of those in 2017, up from around 375 million boe last year to around 850 million boe this year.
WoodMac adds that the Chinese NOCs’ investment strategy is also becoming more dynamic to match rising domestic gas and LNG demand.
The NOCs will aim to capitalize on China’s growing gas demand, with shale gas, LNG storage and pipeline infrastructure gaining prominence.