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Liquefied natural gas (LNG) represents a significant component of the energy consumption of many countries and accounts for about one third of total internationally traded gas. Total global LNG production (liquefaction) nameplate capacity grew to 320 million tonnes per annum (MTPA), or 435 billion cubic meters, by the end of 2015 from 119 MTPA in 2000.

The US shale production boom and recovery of global oil prices from 2010 to 2012 after the global financial crisis created an attractive environment for new LNG projects. An enormous 798 MTPA of new production capacity has been proposed globally in new liquefaction facilities (mostly in the US, Canada and Australia). Of that amount, 117 MTPA of capacity are currently under active construction. If implemented, these projects could not only make the US and Canada the largest LNG capacity holders and exporters globally, but also could create thousands of American jobs, lower the US trade deficit, and strengthen the geopolitical position of the US. In the most optimistic scenario, the US could become the world's largest LNG exporter by 2020, with about 200 MTPA of LNG export capacity installed. However, the recent collapse in global oil prices has made crude oil competitive again to natural gas in terms of energy equivalence and put many of proposed LNG projects at risk.

As the IEA says: "Due to its capital-intensive nature, LNG industry faces an uphill battle. Those projects currently under construction today are set to come on stream broadly as planned, as large upfront capital costs have already been incurred. Beyond that, however, new LNG plants will struggle to get off the ground. Today LNG prices simply do not cover the capital costs of new plants. Several projects have already been scrapped or postponed, and the number of casualties will rise if prices do not recover. Final investment decisions (FID) taken in the next 24 months will determine the amount of incremental LNG supplies available in the early part of the next decade. If current low prices persist, LNG markets could start to tighten up substantially by 2020."

Realistic estimates based on projects that are currently under construction bring down the US LNG export capacity prospects to about 43 MTPA by the end of 2020. That number assumes the shutdown of the 46-year old Kenai LNG plant in Alaska and the successful commissioning of 10 LNG Trains: Sabine Pass LNG (4 trains) and Cameron LNG (3 trains) in Louisiana, 2 trains in Freeport LNG Texas, and the Cove Point expansion project at Chesapeake Bay, Maryland (see the interactive map).

Sources: BP Statistical Review of World Energy - 2015 Main IndicatorsBP Statistical Review of World Energy - 2015 Bilateral trade; World Bank Commodity Price Data (Pink Sheet)World liquefied natural gas (LNG) landed prices (U. S. FERC)U.S. Natural Gas, November 2015UK Natural Gas Futures PricesIGU World LNG Report, 2015. Global LNG Liquefaction Plants And Receiving Terminals

Production and Trade      Liquefaction & Regasification Capacity      Natural Gas and LNG Prices

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