By 2023, the United States will account for close to three quarter of all Liquefied Natural Gas (LNG) export growth and its global market share will jump to 20 per cent, from the current position of four per cent, the International Energy Agency (IEA) has said.
IEA made this disclosure in Gas 2018, its latest gas market report.
Effectively putting Nigeria’s aspiration to grow its traded LNG market share to 10 per cent under pressure as recently disclosed by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, the IEA stated that one of the major changes expected by 2023 would be the US leading growth in gas production and export of LNG.
In 2017, the World LNG Report indicated that Nigeria occupied the position of the fourth largest LNG exporter in 2016, while the US occupied the 16th position, but the Managing Director of the Nigeria LNG Limited (NLNG), Tony Attah, warned at the maiden edition of the Nigeria International Petroleum Summit (NIPS) in February that delay in taking the final investment decision (FID) in different LNG projects in the country could rob the country of its place in the market.
Notwithstanding, the IEA explained in the Gas 2018 report, obtained by THISDAY that strong demand growth from China, greater industrial demand, and rising supplies from the United States, would transform global natural gas markets over the next five years. He added that global gas demand would grow at an average rate of 1.6 per cent per year, reaching just over 4,100 billion cubic meters (bcm) in 2023, up from 3,740bcm in 2017.
“In the next five years, global gas markets are being re-shaped by three major structural shifts.
“China is set to become the world’s largest gas importer within two-to-three years, US production and exports will rise dramatically strongly and industry is replacing power generation as the leading growth sector,” said IEA’s Executive Director, Dr Fatih Birol.
According to IEA, Chinese gas demand is projected to grow by 60 per cent between 2017 and 2023, underpinned by policies aimed at reducing local air pollution by switching from coal to gas.
It added that China alone would account for 37 per cent of the growth in global demand in the next five years to become the largest natural gas importer by 2019, overtaking Japan which is reportedly one of the destinations for Nigeria’s LNG.
The IEA also predicted strong growth in gas use in other parts of Asia, including in South and Southeast Asia, driven by strong economic growth and efforts to improve air quality.
It explained the US, Australia, and Russia were poised to increase the global liquefaction capacity by 30 per cent by 2023, clearly indicating Nigeria was not in consideration in this regards, despite Baru’s recent assurances at the World Gas Conference (WGC) in Washington DC that the country had put in credible measures to capture 10 per cent of LNG market share for itself.
“For end-use sectors, industry will become the largest contributor to the increase in global gas demand to 2023, taking the lead from power generation, which had historically held this role.”
“The change is especially marked in Asia and other emerging markets, thanks to higher gas use in industrial processes and as feedstock for chemicals and fertilizers. Overall, industry accounts for over 40 per cent of growth in global gas demand to 2023, followed by 26 per cent for power generation,” it stated.
The IEA added: “Major changes are also evident on the supply side, with the United States leading gas production growth worldwide to 2023, thanks to the on-going US shale revolution. Most new US supplies will be geared to export markets as LNG or through pipelines.
“The development of destination-free and gas-indexed US LNG exports will provide additional flexibility to the expanding global water-borne traded market.
“The current wave of LNG export projects will increase liquefaction capacity by 30 per cent by 2023. This will be led by an increase in output from the United States, which accounts for nearly three-quarters of the growth in total global LNG exports in the period, followed by Australia and Russia.”
An industry expert, who volunteered his views on the development albeit anonymously, said: “The US ambition means that we lose market share. Unfortunately, we have not progressed with plans for new capacity at existing plants or Greenfield projects.”
