LEE NICHOLS, EDITOR/ ASSOCIATE PUBLISHER
Lee.Nichols@HydrocarbonProcessing.com
Special report: Global LNG overview
T he world is watching natural gas become the fastest-growing
fossil fuel. Growth on both the supply and demand sides has
resulted in the announcement of billions of dollars of capital in-
vestment across the world. The increase in natural gas usage has
caused a surge in LNG trade over the past few years. Depending
on which reports are consulted, global LNG trade reached be-
tween 240 MMtpy and 244 MMtpy in 2014. In 2015, LNG trade
expanded by approximately 3% to 250 MMtpy. BG Group fore-
casts LNG demand to nearly double to 420 MMtpy by 2025. New
LN G capacity is expected to reach over 425 MMtpy by 2020.
T he global LNG ex.port market has been dominated by Qitar,
Australia, Algeria, Malaysia and Indonesia over the past 15 years.
In the next decade, however, North America and East Africa are
expected to become prominent LNG exporters, due to the huge
gas reserves being discovered and produced in the US shale plays
and offshore East Africa. According to BP's Energy Outlook 2035,
global LNG supplies will grow by 48 Bcfd by 2035 ( FIG. 1). The
majority of new LNG export capacity will go online in Australia
and the US, followed by East Africa. In total, over 125 MMtpy of
new LNG ex1'ort capacity is under construction globally.
T he Asia-Pacific region remains the main demand center for
LN G consumption. Soaring natural gas demand will be instru-
mental for adding millions of tons per year of new LNG capac-
ity through 2020. This includes both the construction of LNG
import and export terminals, as well as the use of floating LNG
(FLNG) vessels.
Even with natural gas demand increasing around the world,
LNG supply capacity is outpacing demand growth. This is lead-
ing to a glut of supplies, which should peak prior to the end of
the decade. LNG buyers are renegotiating long-term contracts,
as well as increasing short-term purchases and spot market deals.
The LNG glut could also jeopardize future LNG terminal final
investment decisions (FIDs), as LNG developers would be hesi-
tant to invest in heavily capital-intensive terminal construction.
Africa. The need for gas and coal will continue to grow in Af-
rica as the continent seeks to mitigate widespread electricity
shortages. The continent has plans to expand LNG capacity in
numerous nations for both the import and export of LNG.
Egypt has only two LNG terminals, both designed for ex-
port. LNG exports have decreased substantially over the past
six years as the government has diverted gas from the export
market to satisfy increasing domestic demand. The country
needs more natural gas and is taking the necessary steps to se-
cure additional supplies. However, without a functioning im-
port pipeline or a regasification terminal to import LNG, the
country is forced to lease vessels to receive LNG imports. In
2015, Egypt contracted two floating storage and regasification
Business Trends
units (FSRUs) from Hoegh LNG and BW Gas. Both FSRUs
will be moored in Ain Sokhna. The country is also looking at
leasing a third vessel in late 2016 or early 2017.
Both Mozambique and Tanzania are in the midst of devel-
oping massive offshore natural gas reserves. From exploration
and production activities to onshore mega-LNG export ter-
minals, East Africa has become a hotbed for large capital in-
vestments. With both countries accounting for over 200 Tcf in
estimated natural gas reserves, East Africa has the potential to
become a major global gas hub.
In Mozambique, LNG projects are still in the very early plan-
ning stages and are not likely to be completed on their initial
timetables. Eni and Anadarko are developing the Mozambique
LNG project. The $ 15-B LNG export terminal will be located
in the Afungi peninsula area of the Cabo Delgado province. An
FID is expected to be made in 2016. Eni is also developing an
FLNG vessel to be utilized in its offshore Area 4 operations.
The 5-MMtpy vessel is expected to begin operations in 2019.
Onshore, Eni is looking into building its own LNG terminal at
Quionga. The Quionga LNG terminal will be located near the
Tanzania border and will receive feed gas from Eni's offshore
Area 4 operations. This facility is in the early planning stages,
and time will tell ifEni decides to greenlight the project.
Additional LNG projects are being developed in countries
such as Cameroon, Equatorial Guinea, Ghana, Morocco, Senegal
ao .--~~~~~---..~~~.....,....~~-,-~~~~~~
D Other
D Africa
• Australia
!:!I us
• Russia
• Qatar
2020 2035
FIG. 1. Global LNG supply to 2035. Source: BP Energy Outlook 2035.
Hydrocarbon Processing I JANUARY 2016 9
 Business Trends

and Ivory Coast. The vast majority of these projects will utilize
FLNG technology. Morocco, being the exception, will develop
its $4.6-B integrated LNG and gas-to-power project atJorfLasfar.
Asia-Pacific. Asia consumes 75% of the world's LNG. Japan
and South Korea h ave long dominated the LNG import market,
although China and India's presence has grown substantially
over the last few years and will continue to shape the LNG mar-
ket as demand increases.
To help reduce air pollution, China is attempting to replace
the use of coal with natural gas for power generation. The coun-
try plans to increase the use of natural gas to at least 10% of total
energy consumption by 2020. Domestic natural gas consump-
tion has outpaced supply for several years, resulting in the need
for additional natural gas pipeline infrastructure, as well as a
massive buildout of domestic LNG import capacity. The coun-
try has 12 LNG terminals in operation. This equals nearly 40
MMtpy of regasification capacity in operation, and more is on
the way. China is presently building eight additional LNG im-
port terminals, with several other facilities in the p lanning phase.
• North West Shelf train1-5'
• Darwin LNG train 1'
80 • Pluto LNG train 1'
• OCLNG train 1-2' (unconvenlional)
• APLNG train1-2 (unconventional)
• GLNG train 1-2 (unconventional)
60 • Gorgon LNG train 1-3
• Wheatstone LNG train 1-2
• lchthysLNG train 1-2
40 1-!1~-
::::;...~Pr~elu~de~L~
NG~(~flo;al~ing;l,.....,........-.--.-Jt-t-+-t-t-+-t-t-+-HJ
0
1960 1995 2000 2005
'Indicates p1ojecls currenllyproducing LNG
FIG. 2. Australian liquefaction capacity. Source: Australian Department
of Industry and Reserve Bank of Australia.
Total LNG imports are forecast to nearly triple by 2025 to
over 60 MMtpy. However, waning demand will slow the need
for additional LNG terminal construction. China has already
canceled one of two major pipeline projects with Russia due to
falling demand. The country has also announced that it will in-
crease the use of non-fossil fuels in its total energy mix. China
plans to boost its non-fossil-fuels power generation to 15% of
total power generation by 2020. This includes the construction
of additional nuclear-generating capacity, along with solar, hy-
droelectricity and other renewable sources. By 2020, China is
expected to become Asia's leading nuclear-generating nation.
At present, Indian gas production meets about half of do-
mestic demand. However, Indian natural gas demand is expect-
ed to grow substantially by 2020. Demand from gas-consuming
industries, such as power and fertilizer, is rising steadily. D ue to
the country's inability to produce adequate supplies of natural
gas and its limited natural gas pipeline infrastructure, India re-
lies mainly on imports of LNG. LNG imports are expected to
more than double by 2020.
For this reason, India is expanding capacity at its LNG termi-
nals, as well as building grassroots facilities and FLNG vessels.
The country has four operational LNG import terminals with
an installed capacity of over 20 MMtpy. These terminals are lo-
cated at Dahej, Hazira, Dabhol and Kochi. According to India's
13th Five-Year Plan, LNG import capacity will increase to over
70 MMtpy by 2022(TABLE1) . Total capital expenditures could
reach over $10 B if these projects are completed.
Australia is the fourth-largest LNG exporter in the world.
The country is on track to surpass Q!itar to become the world's
largest exporter by investing billions of dollars in the construc-
tion of onshore LNG export terminals and FLNG vessels. Total
LNG export capacity is expected to eclipse 80 MMtpy by the
end of tl1e decade ( FIG. 2). A possible impediment to Austra-
lia's LNG export goals is t hat surging shale gas output in North
America has aligned with cost complications at Australian LNG
2010 2015 2020
ventures to make the Pacific projects less secure. Rising labor
costs and the fall in global oil-indexed LNG pricing have put
$100 Bin potential projects under threat.
To meet forecast demand, Indonesia will need an additional
1.3 Bcfd of natural gas supplies by 2020. The nation intends to

TABLE 1. India's LNG import capacity, MMtpy, 2014-2022

Location 2014 2015 2016 2017 2018 2019 2020 2021 2022
Dahej 10 12.5 15 15 15 15 15 15 15
Hazira 5 5 5 10 10 10 10 10 10
Dabhol 5 5 5 5 5 5 5 5 5
Kochi 5 5 5 5 10 10 10 10 10
Enno re 0 0 5 5 5 5 5 5 5
Mundra 0 0 5 5 10 10 10 10 10
Kakinada (FSRU) 0 2.5 5 5 5 5 5 5 5
Gangavaram 0 3 3 3 3 3 3 3 3
East Coast terminal (1) 0 0 0 2.5 2.5 5 5 5 5
West Coast terminal ( 1) 0 0 0 0 2.5 5 5 5 5
Total 25 33 48 55.5 68 73 73 73 73
Source: Petroleum & Natural Gas Regulatory Board of India

10 JANUARY 2016 I HydrocarbonProcessing.com

II Business Trends
build more than 13,000 MW of gas-fired power generation by
2020, as well as feed demand for the nation's fertilizer industry.
To import additional gas supplies, the country is increasing the
construction of LNG terminals. In 2015, Indonesia added 2.5
MMtpy of regasification capacity with the completion of the
2-MMtpy Donggi-Senoro and 500-Mtpy Sengkang LNG ter-
minals. Sengkang is scheduled to increase import capacity by
adding three modular LNG trains. Total capacity could reach 2
MMtpy if the additional trains are built.
BP is also completing front-end engineering design (FEED)
work on its $12-B Train 3 project atTangguh. FEED is expected
to be completed by 1Q2016, with an Fill to follow soon after.
BP has secured supply contracts for about half of the train's total
3.8 MMtpy capacity. If additional buyers are not secured, the
Train 3 expansion project may be dead in the water. If the ad-
ditional capacity is sold, the expansion project is expected to be
completed by 2020.
Indonesia's state-owned oil and natural gas corporation,
Pertamina, has announced that it will build the nation's second
land-based LNG in1port terminal. The 4-MMtpy Bojonegoro
LNG receiving terminal will be built in Banten, which is located
in the westernmost province on the island of Java. The engi-
neering, procurement and construction (EPC) contract was
expected to be awarded in late December 2015. An additional
major LNG project includes the Abadi LNG project. Indonesia
is comparing the economics of an onshore terminal vs. the use
of an FLNG vessel. The FID is expected to be made in 1Q2016.
Singapore aims to become the region's first LNG trading hub.
Singapore LNG's (SLNG's) bidirectional LNG terminal onJu-
rong Island has been operational since mid-2013; construction
of additional storage tanks is ongoing until 201 7. SLNG is con-
tinuing to expand the terminal with its $1.5-B Phase 3 expansion
project. This third phase will increase capacity from 6 MMtpy to
11 MMtpy by2018. lffuture demand exists, total capacity could
be increased upward to 15 MMtpy. SLNG is also planning to
construct a second terminal on the island. The new facility will
mirror the existing terminal. Total capacity would be between
6 MMtpy and 9 MMtpy, at a cost of more than $1.5 B. lf devel-
oped, the project would not become fully operational until the
early or middle part of the next decade.
Malaysia is also developing multiple LNG projects to compete
as a regional LNG hub. Among these projects is a new LNG re-
gasification terminal to be built in conjunction with state-owned
Petronas' Refinery and Petrochemical Integrated Development
(RAPID) project. To process gas from newly discovered fields
in offshore Sarawak, Petronas is planning the construction of a
ninth train at Bintulu. A rejuvenation project on Trains 4, 5 and 6
will be completed simultaneously with the construction of Train
9. The $2-B, 3.6-MMtpy ninth LNG train will have bidirectional
capabilities for both liquefaction and regasification processing.
Completion is scheduled for early 2016. Once finished, total liq-
uefaction capacity at Bintulu will reach nearly 30 MMtpy.
In 2015, Japan restarted two nuclear reactors. These two reac-
tors equal about 1,700 MW of power and are the first to be re-
started since the Fukushima meltdown in 2011. Th e restarts are
part ofJapan's ultimate plan to increase nuclear energy from 0%
in 2014 to over 20% of the country's overall energy mix by 2030.
The country is moving toward more nuclear, natural gas and re-
newable energy usage, as opposed to petroleum and other liquids.
12 JANUARY 2016 I HydrocarbonProcessing.com
Japan is the world's leading LNG importer, with over two
dozen LNG regasification plants. Total Japanese LNG imports
reached nearly 90 MMt in 2014. However, Japan's restart of its
nuclear industry will most likely eat into future LNG import
market share. The restart of both Sendai reactors is expected to
displace over 1.5 MMtpy of LNG. Should multiple reactors go
online, which is the most likely scenario, LNG imports could de-
crease over the next decade. Japan's Ministry of Economy, Trade
and Industry has also announced that LNG imports will fall
by approximately 30% to 63 MMtpy by 2030. Regardless, the
nation is building three new LNG import terminals (Hitachi,
Soma and Toyama Shinkou), as well as additional LNG storage
at various locations.
South Korea is the world's second-largest LNG importer, be-
hind Japan. According to BP's Statistical Review of World Energy
2015, the country's natural gas consumption has increased from
77 Bcmy in 2004 to over 112 Berny in 2014. Total LNG imports
reached 38 MMt in 2014. The country receives LNG through
five operating import terminals-Gwangyang, lncheon, Py-
eongtaek, Samcheok and Tongyeong.
In mid-2015, South Korea unveiled a basic power plan draft.
The goal of the plan is to make natural gas and nuclear power a
bigger percentage of the country's total energy mix. T he plan
called for the reduction of coal usage and the increased usage of
nuclear power. South Korea will cancel plans to build fo ur coal-
fired power plants, and will instead build two nuclear power
plants with a combined capacity of 3,000 MW. With less coal
being used, additional supplies of LNG will be needed.
The country is actively building additional regasification
and storage capacity. GS Energy is building the $375-MM,
1.5-MMtpy Boryeong LNG terminal, which should be com-
pleted by January 2017. KOGAS is building an additional nine
LNG storage tanks at its Samcheok LNG import terminal. The
company completed construction on the site's first three tanks
in mid-2014. An additional six tanks will be built by mid-2016,
with the remaining three set to be completed by mid-20 17 .
Canada. The country is the world's fifth-largest producer of
natural gas. The majority of Canada's natural gas production de-
rives from conventional production in the West Can adian Sedi-
mentary Basin in Alberta and shale plays in British Columbia.
Historically, Canada has exported almost all of its excess nat-
ural gas to the US by pipeline. However, because of the shale gas
boom, the US no longer needs to import significant volumes of
natural gas from Canada. This has caused a considerable drop-
off in Canadian exports to its main customer, with projections
showing substantial decreases over the next 20 years.
To offset this financial hit, Canada has announ ced a multi-
tude of LNG export terminal projects. In total, Canada has an-
nounced over two dozen LNG export projects, which equates
to over 250 Ml\1tpy of LNG export capacity at a total cost of
over $170 B. Only a fraction of the Canadian LNG export
capacity will b e built, though. Project delays have hampered
project growth. Billions of dollars in add itional investment are
also needed to construct vital pipeline infrastructure to supply
feeds tock to these LNG export terminals. Obtaining permits
from the various provincial governments and indigenous na-
tions, as well as curtailing p ublic opposition, are add itional
hurdles to pipeline and LNG export terminal construction.
 Business Trends

Pacific Northwest
Cedar LNG BritishColumbia Alberta Labrador Sea

Prince George
•

Steelhead LNG
Canada Stewart Energy
Woodfibre LNG
Tillbury LNG (Fortis BC)
Discovery LNG (Quicksilver)
Tillbury LNG (WestPac Midstream) USA Atlantic Ocean

FIG. 3. Canada has announced a multitude of LNG export projects on Its west and east coasts.

Europe. The region's gas demand is expected to remain stag-

LNG terminals, Bcfd
O Existing
O Construction
• Proposed
FIG. 4. Existing, proposed and under-construction LNG terminals
in Western Europe.
These projects are also in a race to secure supply contracts
with Asian markets. Canada will face heavy competition from
LNG exporting countries, such as Australia, Papua New Guin-
ea and the US-all of which are much further along in their
LNG export capacity buildouts.
The majority of Canada's LNG export terminal projects
have been announced on British Columbia's Pacific Coast.
These export terminals reside primarily at Kitimat, Prince Ru-
pert, Lelu Island and Grassy Point. At the time of this publi-
cation, British Columbia has over 217 MMtpy of announced
LNG projects. Should BG Group go ahead with its Prince
Rupert LNG project and ExxonMobil expand its WCC LNG
project to the full 30 MMtpy, total LNG export capacity in
British Columbia could surpass 253 MMtpy, which equates to
over $145 Bin total capital expenditures by 2030.
Additional LNG export projects have been announced on
Canada's eastern coast. If completed, these projects will rep-
resent over 38 MMtpy of LNG export capacity at a cost of ap-
proximately $24 B. A full list of Canada's west and east coast
LNG export projects are listed in FIG 3.
14 JANUARY 2016 I HydrocarbonProcessing.com
nant over the medium term, due to lower power demand
growth and government support for renewable energy. Fur-
thermore, analysts do not foresee any major diversification in
European gas supplies through the end of the decade, despite
the addition of a few new projects, such as the Dunkirk LNG
regasification terminal in France.
FIG. 4. shows existing, proposed and under-construction
LNG terminals in Western Europe, as of2015. Europe meets
approximately 10% of its gas demand with LNG. It imported
the equivalent of 4.1 Bcfd of LNG in 2014, and LNG imports
to Europe are anticipated to more than double by 2025 and to
more than triple by 2035.
Over the long term, however, market watchers see growth
in Europe's gas use slowing due to sluggish population expan-
sion, already-high market penetration in many EU countries,
and energy efficiency improvemen ts. Likewise, gas consump-
tion growth in Europe's industrial sector will be moderated by
energy efficiency initiatives. Gas use for power generation is
anticipated to make up the largest growth segment for gas in
the EU through 2030.
Russia supplies about one-third of Europe's natural gas de-
mand via pipelines. Due to waning natural gas consumption in
Europe, Russia has turned toward the East to open new markets
and to invest heavily in its domestic LNG sector. The country
has proposed over SO MMtpy of new LNG export capacity at
a cost of over $80 B. However, due to Western sanctions and
natural gas pipeline deals with China, the country's LNG sector
is progressing slowly.
Many of the country's LNG terminal completion dates have
been pushed back. Western sanctions have closed some financ-
ing options, as well as delayed necessary equipment from being
delivered. Russia is also focusing on building a new natural gas
pipeline to China. Russia and China agreed on two major pipe-
line deals worth approximately $700 B. This included the con-
struction of the $400-B Power of Siberia pipeline and $300-B
Altai pipeline. However, in mid-2015, the Altai pipeline project
was canceled. Chinese officials blamed the slowdown in do-
mestic growth as a reason for the cancelation. T hese two pipe-
II Business Trends
line projects are one of the main reasons Gazprom postponed
its Vladivostok LNG project. With the cancelation of the Altai
route, the option is open for Gazprom to reinstate Vladivostok.
To help wean off of Russian natural gas supplies, Poland will
begin regular LNG imports out of its new LNG terminal this
year. The 5-Bcmy Swinoujscie LNG terminal received its first
LNG cargo in December 2015. Once the facility is fully ramped
up, the terminal will be able to satisfy half of Poland's annual gas
demand. The new terminal will help diversify the country's ener-
gy supplies, as well as decrease reliance on imported Russian gas.
Latin America. Like much of the rest of the world, Latin
America is focusing on utilizing natural gas for power genera-
tion. The region continues to witness a growing gap between
consumption vs. production. Presently, natural gas production
cannot keep pace with demand. This has caused many nations
in the region to rely on imports to satisfy demand.
Argentina will likely continue to import natural gas to meet
rising demand, even though production from its substantial
shale and tight gas resources is expected to expand over the next
20 years. The reason fo r continued imports is that it would not
be economically feasible to install production and transport in-
frastructure to meet winter peak demand, as maintaining excess
capacity needed for a short window of time would be too expen-
sive. To this end, regasillcation plants have started up in Argenti-
na in recent years to facilitate LNG imports, which the Argentine
Institute of Oil and Gas says is much cheaper than drilling more
wells and building additional infrastructure.
Colombia will deploy its first FLNG vessel in 1Q2016. Ex-
mar and Pacific Rubiales Energy have partnered together to
build the 500-M tpy Caribbean FLNG project. The FLNG vessel
began the precommissioning phase in September 2015 in China.
Once completed, the vessel is expected to be delivered and to
begin operations in early 2016.
Chile's state-owned oil company, Empresa Nacional del
Petr6leo (ENAP), announced it will invest $800 MM per year to
2020. Th e investment plan focuses on mitigating the need for en-
ergy imports, doubling revenues and adding nearly 950 MW to
the country's energy grid. Downstream investments will foc us on
possibly modernizing and expanding its Concon and Hualpen
refineries, as well as adding regasillcation capacity at the Qµin-
tero LNG terminal. In 1Q 20 15, the Qµintero LNG terminal
commissioned a $30-MM expansion project that increased re-
gasification capacity from 10 MMcmd to 15 MMcmd. A second
expansion phase is expected to increase regasification capacity to
20 MMcmd. The project would include the construction of an
additional storage tank and a fo urth vaporizing unit. Ifgreenlight-
ed, the expansion project is scheduled to be completed in 2018.
Uruguay began developing its fi rst LNG import facility, but
has since ceased construction. The GNL del Plata LNG proj-
ect was meant to consist of an FSRU anchored 4 km off the
coast of Montevideo. Total capacity equaled 10 MMcmd. In
3Q2015, Uruguay revoked a contract awarded to a consortium
led by Engie (formerly GDF Su ez). A new tender is expected
to be launched in 2016. This has pushed back the completion
date to mid-2017. The terminal is significant to Uruguay, as it
will help reduce costly diesel imports and replace them with
cheaper natural gas feedstock for power generation. T he project
is part of Uruguay's plan to increase the usage of natural gas and
16 JANUARY 2016 I HydrocarbonProcessing.com
renewable energy sources in the country's energy mix through
2030. T he country has also begun retrofitting its sole combined
cycle plant from crude to natural gas. Further setbacks to the
terminal's completion jeopardizes the country's strategic goals
for power generation, along with its natural gas exporting op-
portunities to neighboring Argentina.
Mexico relies on natural gas imports from the US to satisfy
domestic demand, mainly for power generation. According to
the US EIA, US gas exports to Mexico via pipeline have tripled
in the past decade, hitting over 700 Bcfin 2014. Mexico suffered
years of gas shortages as US pipeline capacity failed to keep up
witl1 its growing industrial demand for gas, and as Pemex focused
on more profitable oil production. The country is investing over
$ 10 B in the construction of additional p ipeline infrastructure,
foc using on central and northern industrial cities. The majority
of this network will b e filled by natural gas production from US
shale plays, prin1arily the Eagle Ford shale in southern Texas.
With additional natural gas supplies pouring into tlle country,
Mexico has announced plans to possibly export excess natural
gas as LNG. At present, Mexico operates three LNG import
terminals located at Altamira, Costa Azul and Manzanillo. Total
domestic LNG regasification capacity is just over 15 MMtpy. Pe-
mex is conducting feasibility studies on two projects that could
turn Mexico into an LNG exporter. The first export terminal
would be located near Salina Cruz on the Pacific coastline of
Oaxaca. Feasibility studies on the proposed $6-B terminal began
at the end of2014. If built, the terminal would, most likely, begin
operations after 2020.
The second proposed project is to add liquefaction capabili-
ties at Mexico's existing Costa Azul LNG facility. In 1Q2015,
Pemex signed a memorandum of understanding to develop the
project with Sempra Energy units IEnova and Sempra LNG.
The scope of work includes adding more than 3 MMtpy of liq-
uefaction capacity to the existing terminal.
In February 2014, Antillean Gas Ltd. broke ground for a
n ew LNG receiving terminal in the Dominican Republic. The
1-MMtpy LNG import terminal will be located in San Pedro de
Macoris, on the country's southeast coast. The project is part of
the country's plan to import natural gas to fuel power plants and
provide power generation fo r residential, industrial and trans-
portation sectors. The facility, which will process natural gas
into more than 1,000 MW of power generation for the country,
is expected to be completed in 2016.
Lastly, like many Latin American nations, Puerto Rico is
shifting from costly fuel oil and diesel to the use of cleaner-burn-
ing natural gas for power generation. To accomplish this strategy,
Excelerate Energy will build, own and operate the Aguirre Off-
shore GasPort project. The project will be located approximately
4 mi offshore the southern coast of Puerto Rico. The terminal
will consist of an FSRU, a fixed jetty and subsea pipeline to de-
liver imported natural gas to the Puerto Rico Electric Power Au-
thority's Central Aguirre Power Plant. Construction on the proj-
ect is expected to start in 1Q2016, with operations scheduled to
commence in 2Q2017.
Middle East. The region's gas demand has increased consider-
ably in recent years due to infrastructure investments, economic
growth and price subsidies in several countries. Gas is the fast-
est-growing fossil fuel in the Middle East in terms of both pro-
 Business Trends

TABLE 2. US LNG export capacity online by 2019

Project Location No. of liquefaction trains Capacity, MMtpy Total CAPEX of all trains, $ MM
Sabine Pass LNG Sabine Pass, LA 4 18 18,000
Cameron LNG Hackberry, LA 3 12 10,000
Freeport LNG Freeport, TX 2 9 11,000
Cove Point LNG Lusby, MD S.75 3,500

md and is expected to be completed 3Q2018. The vessel will

help combat the trend of domestic demand outpacing supplies.
According to BP, Kuwait's natural gas consumption has in-
creased from 12.4 Berny in 2009 to over 20 Berny in 2014. Do-
mestic natural gas production has been unable to keep up with
demand. This has led to the need for additional natural gas im-
ports to fuel power generation and mitigate blackouts during
peak demand periods. The country imported approximately 2.5
MMt of LNG in 20 15 through a floating import vessel moored
at Mina al-Ahmadi. In December 2015, Kuwait Petroleum Corp.
announced that it plans to boost LNG imports by 17% in 2016
to 3 MMtpy. The company will utilize its floating import vessel
while plans for an onshore terminal are implemented. Kuwait
has sanctioned over $3 B for the construction of a new onshore
1. Sabine Pass LNG 19. Magnolia LNG terminal to be located at Mina al-Ahmadi. The new terminal will
2. Freeport LNG 20. Trunkline LNG (expansion)
3. Lake Charles Exports (Trunkline)-delayed 21. Gaslin LNG
have a sendout capacity of LS Bcfd with the ability to expand
4. Crowley (formerlyCarib Energy) 21. Venture Global LNG up to 3 Bcfd, if needed. Commercial operations are scheduled
5. Dominion Cove Point LNG 23. EOS LNG to begin in 2020.
6. Jordan Cove (Coos Bay) 24. Barca LNG
7. Cameron LNG 25. DelfinLNG T he United Arab Emirates' (UAE's) natural gas demand is
8. Gulf Coast LNG Export 26. Texas LNG also increasing. The country depends on natural gas to fuel elec-
9. Gulf LNG liquefaction 27. Louisiana LNGEnergy
10. Oregon LNG 28. Strom LNG tricity generation. The UAE receives about one third of its natural
11. Southern LNG 29. SCT&E LNG (Monkey Island) gas supplies from Q!itari pipeline shipments. To provide flexibil-
12. Lavaca Bay-canceled 30. Downeast LNG
13. Golden Pass LNG 31. LiveOak LNG ity for power generation, the UAE is looking into nuclear power
14. Corpus Christi LHG 32. Alaska LNG and renewable sources, as well as increasing LNG import capac-
15. Main Pass Energy Hub 33. Port Arthur LNG
16. CEFLNG 34. American LNG ity. The country plans to add capacity at its Jebel Ali LNG storage
17. Waller LNG 35. Rio Grande LNG facility, and to construct a new LNG import facility at Fujairah.
18. Pangea LNG
The Emirates LNG project will be located at the Port ofFujairah,
FIG. 5. Planned US LN G export terminal projects. Source: Hydrocarbon which is strategically located outside the Strait of Hormuz. The
Processing's Construction Boxscore Database. terminal is expected to begin operations by rnid-2018.
In the wake of a nuclear deal, Iran is seeking $100 B to re-
duction and demand. BP expects the share of gas in the region's build its gas industry. The country has the second-largest natu-
total energy mix to grow from 49% in 2015 to 54% by 2035. Gas ral gas reserves in the world, but sanctions have severely lim-
is expected to remain the leading fuel in power generation, with ited trade. The country plans to boost natural gas production
its share increasing from 61 % in 20 15 to 74% in 2030 as crude and exports, but lacks the necessary infrastructure to move its
oil's share drops from 33% to 17%. natural gas to market. The country has only one LNG terminal,
Although several Middle Eastern nations have expanded which is only half-completed. If the project were to be restarted,
production, domestic gas shortages have arisen as a result of LNG exports would not begin until at least 2018. Regardless,
rapidly escalating consumption. Regional demand is antici- Iran has vast amounts of natural gas resources and is actively
pated to double over the next two decades on increased power pitching to major oil and gas companies to invest money and,
needs and industrial use, spurring some countries to establish more importantly, technology to increase natural gas produc-
policies prioritizing domestic gas use over exports. tion and infrastructure builds.
Qatar, the world's largest producer and exporter ofLNG and
the second-largest natural gas producer in the Middle East after US. The shale gas boom has established the US as the world's
Iran, is facing competition from the shale gas boom in the US leading gas producer and is responsible for billions of dollars
and planned LNG projects in Australia. However, Q!itar is likely of investments in the US gas processing industry. This con-
to remain on top of the LNG sector for some years yet. struction includes dozens of new cryogenic and gas processing
In early December 2015, Bahrain's Oil and Gas Authority plants, NGL fractionators and hundreds of miles of new pipe-
awarded a consortium comprising Teekay LNG, Samsung C&T line infrastructure.
and Gulflnvestment Corp. a contract to develop an LNG floating The abundance of domestic natural gas has also created a
storage unit (FSU). The FSU will have a capacity of800 MMe- surge in LNG export terminal projects. US companies have
18 JANUARY 2016 I HydrocarbonProcessing.com
- Business Trends
announced over 30 LNG export terminals. These projects
equate to over 330 MMtpy of LNG export capacity by 2025.
This represents nearly $200 Bin announced LNG export ter-
minal construction over the next decade. Projects that have
submitted an application with the US Department of Energy
(DOE) to export LNG to non-PTA nations are listed in FIG. 5.
The overwhelming majority of these projects are located along
the US Gulf Coast. At the time ofthis publication, the US DOE
has only approved one third of non-FTA applications. Projects
that have been awarded non-FTA approval include:
• Sabine Pass LNG ( Cheniere Energy)
• Freeport LNG
• Lake Charles Exports (Trunkline)
• Dominion Cove Point LNG
• Jordan Cove (Coos Bay)
• Cameron LNG
• OregonLNG
• Corpus Christi LNG (Cheniere Energy)
• Alaska LNG
• American LNG
In February 2015, Lake Charles Exports announced that it
will delay FID until mid-2016.
With over 330 MMtpy of LNG export capacity announced
in the US, it is highly unlikely that the majority will be built.
Low oil prices likely will have a negative effect on the US LNG
export industry. LNG export markets are tied to oil indexing,
and, with crude oil prices decreasing by 50% over the past year
20 JANUARY 2016 I HydrocarbonProcessing.com
and a half, the US Henry Hub market is losing its p rice advan-
tage. This not only minimizes projected LNG export revenues,
but it also makes financing capital-intensive LNG facilities
more difficult. The US also has steep comp etition from other
LNG-exporting powerhouses, such as Australia. The projects
that can secure, or that have already secured, supply contracts
are more likely to move forward. T he US has the advantage of
being able to offer a full array of benefits to the global LNG
market. This includes ample gas supplies, low production and
liquefaction costs, an advanced natural gas pipeline network,
geographical positioning to be able to supply both Europe and
Asia-Pacific markets, and destination flexibility clauses woven
into supply contracts.
The billion-dollar question is: W hat will be built? The
US is expected to add approximately 46 MMtpy of LNG to
the global market by 2019 ( TABLE 2) . A second wave of LNG
capacity additions, if built, could add 30 MMtpy. This would
include additional liquefaction trains at Sabine Pass and Free-
port, and the startup ofCheniere's $11.5-B, 15-MMtpy Corpus
Christi LNG p roject. Outlier projects include the grassroots
Jordan Cove and Oregon LNG terminals. Both projects have
non-FTA approval, but both must be built from the ground
up. This includes the construction of connector pip elines for
natural gas feedstock to reach the facilities. If built, these fa-
cilities are not likely to begin exports before 20 19. Regardless,
the US is on track to become the third-largest LNG exporter
in the world by the end of t he decade . ...P