Given that cleaner, flexible, affordable, and reliable natural gas is the go-to fuel. It is because it cut greenhouse gas emissions and back up intermittent wind and solar power. The Liquefied Natural Gas Market is the fastest-growing commodity market in the world. The reality is that there are about 100 things you need to know about LNG, but let’s just stick to nine of them.
In 2018, the LNG market grew by 8% with deliveries at 314 million tons (MT). This was nearly a 30% rise from 2015 and over a tripling since 2000. There was 868 MTPA (per annum) of total regasification capacity but only 406 MTPA of total liquefaction capacity. LNG now accounts for ~14% of gas use globally.
And there is currently some $1.4 trillion in LNG development across the globe, with the U.S., Canada, Russia, and Australia leading. This makes perfect sense: yearly global demand is modeled to soar 3-7% for decades (those that foresee any regression for LNG base their assumptions on unrealistic Herculean forecasts for wind and solar power).
Although declining, long-term, oil-based contracts still dominate, at 68% of LNG contracts. Around 25% of all LNG was sold on a spot basis, with another 7% short-term (i.e., under four years). The emerging U.S. export market in particular is adding a critical flexible contract style to the market – more liquidity and shorter-term options enhancing the business. The U.S. is bringing LNG that lacks the “destination clauses” that have long restricted the resale of unneeded supply. It’s the U.S. that will evolve gas from a regional product into a global commodity sold like petroleum.
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