The Middle East's gas demand is set to almost double by 2040 with rapid population growth and industrialisation over the last four decades showing little sign of easing, The Abdullah Bin Hamad Al-Attiyah International Foundation for Energy & Sustainable Development has said in a report citing the International Energy Agency.
The Gulf's LNG exporters secured coveted long-term supply contracts for Asia before the depth of local demand was fully appreciated. Consequently, LNG infrastructure built to feed demand in Asia and Europe has increasingly been used since 2012 to help support the GCC (Gulf Cooperation Council) region, particularly Kuwait, Oman and the UAE.
The region's LNG imports from the US and others are likely to continue as the 230-mile Dolphin gas pipeline from Qatar's North Field to the UAE and Oman remains the Gulf's only transnational submarine pipeline, the foundation said in its recent report 'Energy outlook 2020+'.
The report highlighted Qatar's pioneering spirit and said the country's appetite to explore untrodden energy paths has spearheaded the growth of the global LNG market since Qatargas, now the world's biggest LNG exporter, was established in 1983.
Qatar launched its LNG industry against a wave of cynicism that expected the product's high capital costs to be a black mark on Qatar's economic scorecard. Instead, liquefied natural gas revolutionised Qatar's economy and put the country front and centre on the global energy stage.
LNG, natural gas and oil revenues account for 70% of government revenues and 85% of export revenues in Qatar, which has one of the world's highest rates of GDP per capita. Qatar's coveted niche in the global LNG export market can primarily be sourced to its unique ability to provide the entire value chain � from production through to shipping � and never failing to deliver a cargo.
Qatar's strategic position on the doorstep of the world's booming energy economies has helped, such as easy access to Asia, the Middle East and East Africa. An ability to adapt will safeguard Qatar's bullish track record, as illustrated by Doha's ability to immediately divert every possible tonne of LNG to support long-time ally Japan following the Fukushima nuclear crisis in 2011, the report said.
Emerging LNG exporters, as well as existing providers looking to expand their market share, are reshaping the global energy map. The combined volume from the US and Australia alone could account for more than 90% of new LNG exports by 2020, with the two countries representing the majority of a 45% increase in liquefaction capacity between 2015 and 2021, the foundation noted.
The US' first LNG export from the country's Sabine Pass on the Gulf of Mexico in February through the newly-widened Panama Canal marked a game changer that influences every aspect of the global LNG ecosystem. The US' share of global export capacity will jump to 14% by 2020 from base zero today, according to consultancy Energy Aspects, thus leveraging the country's access to buyers in the Pacific and Atlantic basins, the report said.
Australia is also on track to become one of the world's biggest LNG exporters thanks to a $200bn investment into the country's LNG industry over the last decade and the country's strategic position in Asia. But, the journey has not been entirely smooth.
Japan's appetite for LNG imports, which accounts for 70% of Australia's export portfolio, has dipped this year to the lowest point since the Fukushima nuclear disaster in 2011. In addition, the country's strategy to leverage its multi-billion dollar infrastructure projects to get a head start on the emergence of the US' rapidly expanding market has often faltered. Australia's infrastructure projects are hampered by delays, bickering contractors and soaring costs, which are exacerbated by generous compensation packages. Australian workers typically take home up to 35% more than their US counterparts, the foundation said.
Source: Hellenic Shipping News