Page 7 - MEOG Week 23 2021

MEOG COMMENTARY MEOG

Looking ahead growing segment within the wider LNG indus-
The global LNG industry is anticipated to grow try as a result of these trends.
further still, though there are uncertainties The IGU’s report sought to highlight the role
related to the energy transition to be navigated LNG can play in both the post-pandemic recov-
in the longer term. ery and the energy transition. The group noted
The IGU estimated that as of February 2021, this in reference to both LNG as a marine fuel
there was 892.4mn tpy of liquefaction capacity in a decarbonising world and to gas use more
awaiting a final investment decision (FID), with broadly.
the US and Canada accounting for the majority. These arguments will be contested by those
It is worth noting that this figure will now be advocating a shift away from fossil fuels alto-
smaller, as a few North American projects were gether in favour of renewables, but thus far con-
scrapped after February. sumption trends appear to support the IGU’s
Nonetheless, a considerable amount of lique- expectations that gas demand will continue to
faction capacity is still awaiting FID, with a back- grow.
log of projects deferred from 2020 adding to this. The group said that global regasification
Indeed, only one new liquefaction project – capacity had risen to 850.1mn tpy as of February
Sempra Energy’s Energía Costa Azul LNG in 2021, with 19mn tpy added in 2020.
Mexico – reached FID last year, which the IGU As with liquefaction, some projects previ-
said was one of the worst years recently for sanc- ously targeted for start-up in 2020 were pushed
tioned liquefaction capacity. back to 2021, and the IGU said it anticipates
Things are already turning around in 2021, future regasification capacity additions in both
with Qatar Petroleum (QP) announcing an FID established regions and new markets.
on its North Field East expansion – the largest The group identified Ghana, El Salvador,
LNG project in the world – in February, while Vietnam and Nicaragua as likely new importers
a number of developers are still targeting FIDs that could emerge by the end of 2021.
later in the year. The dialogue and policy around the energy
The IGU warned, however, that a “large por- transition are changing rapidly, but for now, this
tion” of the pre-FID projects was unlikely to appears to have done nothing to dampen the
progress. It noted how capital-intensive major appetite for LNG.
LNG projects are, while developers have been This could change in the coming years, but for
rethinking their capital allocation plans. How- now the IGU appears confident of the fuel’s role
ever, the group said small-scale LNG remained a in the world.™

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