Inter-regional gas trade to expand by 40 per cent
Inter-regional gas trade is expected to expand by 40 per cent from 2014 to 2020, surpassing 780 billion cubic metres (bcm), according to projections in the International Energy Administration (IEA) Medium-Term Gas Market Report 2015.
The report said that Liquefied natural gas (LNG) will account for 65 per cent of the increase.
The report also sees global LNG capacity additions between 2014 and 2020 of 164 bcm, 90 per centt of which will originate from the United States and Australia. The bulk of new LNG supplies will hit the market in 2016 and 2017.
Some regions are expected to experience pronounced changes in their net trade position, reflecting new demand and supply dynamics during the projection period.
IEA stated: “Global natural gas demand remained weak in 2014, falling well below its ten-year average. High prices for gas in the past two years undermined its competitiveness, bringing to light a harsh reality: in a world of cheap coal and falling costs for renewables, gas has laboured to compete. Although Asia has been regarded as an engine of future gas demand growth, the fuel has struggled to expand its share of the market in many parts of the region. This has raised questions over the viability of gas as an attractive strategic option across Asia.
The context for gas markets is changing rapidly, however. Falling oil prices have resulted in much lower gas prices in many parts of the word. As a result, gas demand is enjoying the tailwind of substantial price drops while the upstream sector is suffering amid large capital expenditure cuts.
Also, the Energy Information Administration said that Nigeria exports the vast majority of its natural gas in the form of LNG, and a small amount is exported via the West African Gas Pipeline (WAGP) to nearby countries.
It added that WAGP operates at about one-third of its capacity.
“Nigeria exported about 800 Bcf of LNG in 2013, ranking Nigeria among the world’s top five LNG exporters, along with Qatar, Malaysia,
Nigeria’s LNG exports accounted for about seven per cent of globally traded LNG. Japan is the largest importer of Nigerian LNG and imported 23 per cent of the total in 2013, followed by South Korea (17 per cent) and Spain (14 per cent).