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IHS Markit: LNG investment skyrocketing, U.S. set to take global lead by 2023

The liquefied natural gas (LNG) industry, which promises to revolutionize power generation worldwide, is expanding by historic leaps and bounds in the U.S. and beyond, according to a new report by IHS Markit.

Last year was a record shattering year for the LNG industry, as final investment decisions for liquefaction projects topped 70 million tons per year (MMtpa). This is 40 percent higher than the previous all-time high reached in 2005.

The U.S., Russia and Mozambique each set historic levels for final investment decisions on LNG projects in 2019, according to the report.  

“The ongoing pace of new investment is especially noteworthy considering a market context of weak global prices,” said Michael Stoppard, chief strategist, global gas at IHS Markit. “Not only did LNG grow at an unprecedented rate in 2019, but the industry also laid the foundations for continued strong growth into the middle of the decade.”

Numerous companies are already building or planning to build LNG export terminals on the U.S. coasts as gas production reaches 94 billion cubic feet per day and perhaps more.

Natural gas pipelines bring the product from various drilling plays into facilities which the gas is chilled to liquefy it and make it stable and more compact for shipping. That gas is then delivered taken from the LNG export terminals and can ship out to foreign markets for heating or power generation.

And this is likely only the beginning. IHS Markit forecast that global LNG capacity is expected to total 437 MMtpa this year, a nearly 60 percent increase over only five years earlier.

The U.S. is gaining faster but only became a net energy exporter in the last year. Australia is No. 1, surpassing Qatar as top LNG exporter for 2019.

IHS Markit predicts that Australia will hold on to that top spot for maybe three years when the U.S. ascends to the front of the LNG production pack.

POWERGEN 2019 video flashback: Rod Walton talks LNG export possibilities with David Lewis, CEO of Houston-based Energy Capital Vietnam.

On the import side, Europe, China and Japan lead the way. China is the world’s largest LNG importer of recent note, with some 7.3 million tons taken in December, while Japan is the biggest annual importer at 77.5 MMtpa for all of 2019, according to the report.

U.S. companies are working out LNG deals with countries in the Caribbean, South America, Asia and Europe, according to recent Power Engineering stories.

During POWERGEN International 2019 in New Orleans two months ago, Energy Capital Vietnam CEO David Lewis talked about the potential for U.S. LNG export worldwide and particularly in Asia (see above).

“These are very exciting times,” Lewis said. “The shale revolution and all of that fracking (hydraulic fracturing) have led a global transformation in the energy landscape.”

The IHS Markit report, “2019: A Year of Records for LNG” can be found on the ihsmarkit.com site.

(Rod Walton is content director for Power Engineering and POWERGEN International. He can be reached at 918-831-9177 and [email protected]).

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LNG and natural gas infrastructure are new and important parts of the content planned at POWERGEN International 2020 happening December 8-10 in Orlando. The POWERGEN call for abstracts is now open and looking for sessions on LNG. Deadline for submissions is Feb. 24.