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LNG exports decline for first time in three decades

Bloomberg, Published March 30, 2009, 23:52

Singapore: Liquefied natural gas exports probably declined in 2008 for the first time in about three decades because of the global recession, project delays and a drop in production.

Output dropped about 0.3 per cent to about 172 million tonnes in 2008, based on preliminary numbers, said Alexis Aik, a consultant with Facts Global Energy. World LNG supplies fell in 1980-1981 after the collapse of Algeria-US LNG trade, Andy Flower, an industry consultant, said in December.

Growth in LNG trade slowed after expanding 7.3 per cent in 2007 because of the delayed commissioning of new ventures in Qatar, Russia and Yemen, technical problems in Algeria and Norway, and limited gas supplies to feed liquefaction plants in Nigeria and Egypt. The global recession also cut LNG demand as it curtailed electricity use in Asia.

“This is the first decline in the recent past,” Aik said in an interview by telephone today. “European and Asian consumption helped offset a major decline in supplies to the US.”

Japan was the largest importer of the clean-burning fuel last year at 69 million tonnes followed by South Korea with 27 million, Aik said. Japan bought about 65 million tonnes and South Korea took about 25 million in 2007, according to BP Plc’s Statistical Review of World Energy 2008.

Spain, the world’s third-biggest LNG user, imported a third of Japan’s LNG volumes and was the largest buyer in the Atlantic Ocean area, Aik said. Imports by US fell by about 41 per cent.

Qatar increased supplies in 2008 by 1.4 per cent to 30 million tonnes while Malaysia’s exports fell by 1.4 per cent to 22 million tonnes, Aik said. Indonesia exported about 20 million tonnes. ExxonMobil Corp and Total SA have stakes in Qatari LNG projects among others while Shell is a partner in the Bintulu LNG plant in Malaysia.

Qatar supplied about 80 per cent of the fuel to countries in the Asia Pacific while Algeria was the biggest exporter from the Atlantic Ocean area at 17 million tonnes.

Only one project was approved in 2008, at the port city of Arzew in Algeria, Flower said. That compares with the approval for the Chevron Corp-led project in Angola and Woodside Petroleum Ltd’s Pluto project in Western Australia in 2007.

shipment Sakhalin on stream 

Gazprom’s Sakhalin-2 project said that it loaded Russia’s first commercial shipment of liquefied natural gas for Japan, the world’s biggest buyer of the fuel. 

The Energy Frontier, a 147,599 cubic-metre LNG tanker belonging to Tokyo Gas Co, left Prigorodnoye port over the weekend for Sodegaura terminal in Tokyo Bay, a receiving facility used by Tokyo Gas and Tokyo Electric Power Co., Sakhalin Energy said.

“Russia has marked its entry into the Asia-Pacific LNG market and Japan and Korea have a new long-term energy partner,” Ian Craig, Sakhalin Energy’s chief executive officer, said in the statement. 

State-run Gazprom, which ships all its gas exports to Europe via pipelines, plans to break into new markets by cooling gas to a liquid for transportation by tanker.