Global LNG demand seen to hit 500mtpa by 2030
02 Dec 2017 - 9:13
Global LNG demand is expected to grow by nearly five percentage points every year, on average, to almost 500 million tonnes per annum (MTPA) by 2030. Projected population growth in developing economies, continuing high rates of urbanisation globally, and an increasingly environmentally conscientious public pushing for more regulations to adopt cleaner fuels in an effort to improve air quality have all been driving demand. Moreover, LNG for commercial land-based transport and marine bunkering is forecasted to grow exponentially if policy initiatives currently under consideration are enacted at a national, regional, or global level, according to Qatargas.
Qatargas’ 2016 performance has been outstanding on all fronts, starting with safety and ending with financial performance, even after being subjected to a challenging business environment towards the end of 2015, Qatargas noted in its 2016 annual sustainability report.
Qatargas signed two Memoranda of Understanding this year with leading global shipping and energy companies to help develop LNG as a marine fuel. Using LNG as a marine fuel reduces greenhouse gas emissions, and is an environmentally friendly alternative to burning heavier fuel oils in the shipping industry, Qatargas CEO Sheikh Khalid bin Khalifa Al Thani (pictured) commented in the report.
LNG production has remained relatively unchanged, decreasing by only 0.55 percent over the past year. Stable production reflects Qatargas’ reliability as a producer and position in the LNG market as a trusted supplier. “We continue to prove our sterling reputation in the industry is well-earned and justified through our resilient operations during this economic period with lower than expected oil prices,” the report said.
In the challenging circumstances of low oil prices, Qatargas captures the available opportunities through further diversification of its deliveries. LNG is loaded onto carriers at the Ras Laffan Port. The 10,000th cargo was jointly loaded by Qatargas, Qatar Petroleum, and RasGas in 2016, marking another milestone in the utilisation of port facilities established in the mid ‘90s. Qatargas has recently signed a four-year agreement with Kuwait Petroleum Corporation (KPC) to supply half a million tonnes of LNG per year to Kuwait over the next four years. This further enhances Qatar’s reach in the Gulf Cooperation Council and the Middle Eastern LNG market.
Qatargas has extended its strong relationship with Petronas LNG UK Limited for another five years from the original expiration date of December 2018 to the end of 2023. The renewed deal will see the delivery of 1.1 million tonnes of LNG to the United Kingdom (UK) on a yearly basis. Signing a new flexible SPA with RWE Supply & Trading (RWE), a leading European electricity and gas company, Qatargas continues to expand its customer portfolio in the European market.
The flexible SPA with RWE is in effect for the next seven-and-a-half years to provide 1.1 million tonnes of LNG per annum. Qatargas has also successfully signed a long-term SPA with Global Energy Infrastructure Limited (GEIL), based in Pakistan, to provide 1.3 million tonnes of LNG per year over the next 20 years. The first shipment is scheduled for 2018, and volume of deliveries can increase to 2.3 million under current terms of the agreement.
“Our SPA with GEIL strengthens Qatargas’ growing relationship with the Pakistani energy sector as a leading supplier of LNG to the country. Finally, building on a relationship that began in 2011, Qatargas signed an SPA with Centrica to supply LNG until 2023. This deal ensures delivery of up to 2 million tonnes of LNG per year to strengthen UK’s energy security for the near future. These recent Sale and Purchase Agreements (SPAs) with four prestigious international LNG clients cements Qatargas’ position as The World’s Premier LNG Company. The ability to diversify our customer base has been significantly enhanced by improvements in transportation and delivery mechanisms. Qatargas can now deliver LNG to multiple destinations during the same journey, once again setting the industry standard with its first multiport delivery operation.”
Besides establishing new markets and strategic industry partnerships, Qatargas leads the industry in pioneering new LNG applications, in line with its 2020 Vision. Qatargas has reached several milestones in the exploration of LNG as a bunker fuel through establishing MOUs. It signed a joint MOU with Maersk Group and Shell, before signing a second joint MOU with the United Arab Shipping Company (UASC) and Shell.
Qatargas has also signed a special Letter of Intent with the Maersk Group to develop new technology that enhances the efficiency of LNG-based propellers in marine vessels. The main advantages of using LNG as a bunker fuel are primarily environmental and financial to those adopting the technology, while it also leads to increasing demand for LNG and can support a stable higher price for suppliers.