LNG is a global commodity with 20 countries exporting to 35 importing countries. It accounts for approximately 10% of global gas consumption and represents 32% of internationally-traded natural gas. Market penetration is increasing in areas such as Latin America, the Middle East, Africa and parts of south-east Asia, while around 20 countries have plans for import terminals, facilitated by new technologies such as floating storage and regasification units (FSRUs).
The LNG market is currently heading into oversupply, with approximately 150 million tonnes per annum (Mtpa) of new export capacity due to come on line between 2015 and 2020 - a 50% increase over current capacity.
New liquefaction projects in Australia, Russia, Malaysia and Indonesia have been joined by a rush of LNG export projects in the US, stimulated by extensive shale gas developments.
There have also been structural changes in the LNG market. The expansion of the LNG trade has been accompanied by an increase in the number and diversity of LNG players in the upstream sector. There is an increase of investment in LNG solutions for transportation and changes in the marketing and trading of LNG. Small to mid-scale LNG has taken off, increasing market penetration and servicing demand from power projects in areas not covered by power grids - from surface transportation, such as trucks and trains, and from the maritime sector. And resulting from the new entrants and the added competition, a more flexible approach to LNG contracting and pricing is emerging.