LNG Infrastructure

Report Highlights

• Spending on LNG infrastructure, including pipelines, LNG plants, processing plants, LNG tankers, and loading and unloading terminals through 2010 will rise at an AAGR (average annual growth rate) 11.3% to 12.1 tcf/year valued at $73.6 billion.
• LNG now is expected to meet up to 10% of global gas demand by 2010.
• LNG trade currently accounts for 31% of all traded natural gas volumes and is forecast to rise to 38% by 2010.
• Demand in the merchant sector will increase at an AAGR of 7.6% to 2010 to nearly 0.4 tcf/year.

INTRODUCTION

LNG’s significance lies in its continued expansion, diversification and ability to bring stranded natural gas reserves into the main markets, thus avoiding the political and technical issues associated with transporting gas by pipeline across national borders, extreme terrains and oceans. It also serves as a competitive force in gas pricing and can offer security of supply to those regions dependent on pipeline gas from a limited number of pipeline gas suppliers.

Thus, the growing complexity of contractual relationships and structures of some modern LNG supply chains is evidenced by international oil and gas companies national oil companies, and utilities now participating at several points along a typical supply chain to extract more value, spread risk, and establish more security of off-take or supply. This contractual complexity, increased diversification and deintegration results in some risks increasing, others being offset, and new opportunities materializing.

This BCC report assesses, evaluates and quantifies the role of infrastructure development to meet future LNG demand. It quantifies current demands and forecasts future demands for LNG by product type, application and technology, and the relationships between the major segments that constitute the LNG infrastructure value chain.

SCOPE OF STUDY

The report:

• Assesses and quantifies current global LNG demand
• Investigates and evaluates future global use as chemical feedstocks and for primary energy production through 2010
• Assesses the various technologies needed to facilitate the supply and distribution of LNG globally
• Tracks the evolution of the LNG supply chain and any fragmentation in the chain
• Evaluates and quantifies international LNG trade
• Evaluates the economic, industrial and environmental benefits of LNG use
• Estimates LNG as a means of monetizing stranded gas resources
• Addresses the globalization requirements of LNG infrastructure.

METHODOLOGY

In this report both historic and current data have been used in the LNG infrastructure demand analysis. The results of the calculations presented here are therefore based on three components: a historic analysis of the global LNG infrastructure demand in the period 2002 to 2005, estimates for 2005 and forecasted demand for the 2005 to 2010 time frames. The report also gives estimates of losses in LNG as a result of transportation and distribution and explains how such losses are being minimized.

INFORMATION SOURCES

Information sources include trade data (national and international), company publicity literature, conference reports, world trade technical journals and interviews with company representatives