Douglas-Westwood forecasts capital expenditure on global LNG facilities will total $241 billion between 2016 and 2020, rising 34 percent compared to the preceding five-year period.
DW’s Hannah Lewendon , said, “Capex on LNG facilities has risen substantially in recent years, due mainly to the growth in the global economy which has been driving demand for natural gas. By far the largest proportion of the total expenditure will be attributed to liquefaction projects. Global expenditure in this segment is forecast to total $160 billion over the next five years.”
The consultancy puts the focus shift down to a weakened demand growth in Asia and the oil price slump as well as the pause in commitments to new LNG projects. Spending on LNG carriers is expected to account for 12 percent of the total expenditure, mostly attributed to Asia.
“The Australasian LNG construction boom looks to be coming to an end as the country prepares to enter a new production phase. Massive investments in large LNG projects will result in seven new LNG plants becoming operational over the next few years. With commodity prices depressed, future LNG projects are uncertain, as those which are currently in Front End Engineering Design (FEED) are struggling to make economic sense in the low price environment,” added Mark Adeosun of Douglas-Westwood.
Adeosun also noted that the slow approval process for onshore projects in the United States limits the growth rate of LNG expenditure in the region over 2016-2020.
DW predicts that only six LNG export terminals will be built during this period out of 11 planned. In total, there are 20 us LNG export projects proposed for the future.
Still, DW expects that North America will play a significant role in the market by the end of the forecast period.
[mappress mapid=”17810″]
Image: Cheniere