2019 WORLD LNG REPORT Sponsored by TABLE OF CONTENTS Message from the President of the International Gas Union 3 2. State of the LNG Industry 4 3. LNG Trade 8 4. Liquefaction Plants 26 5. LNG Carriers 48 6. LNG Receiving Terminals 64 7. The LNG Industry in Years Ahead 82 8. Special Topic: Small Scale and LNG Bunkering 86 9. Special Topic: Floating LNG 90 10. References Used in the 2019 Edition 94 Appendices 96 The trademarks and registered trademarks used to designate certain products and services in this presentation are owned by their respective companies. 1 President’s Message CLEANER ENERGY MESSAGE FROM THE PRESIDENT SOLUTIONS IN A OF THE INTERNATIONAL GAS UNION Dear colleagues, Global liquefaction build-out was causing challenges for gas to flow to CHANGING ENVIRONMENT driven largely by capacity additions demand centres. It is my honour to have been named in Australia, the United States, SHELL CARDISSA FUELLING GAGARIN PROSPECT, THE WORLD’S President of the International Gas and Russia. Between January 2018 The future looks bright for LNG, and Union (IGU) for the 2018-2021 and February 2019, 36.2 MTPA of we expect 2019 to be a benchmark FIRST CRUDE OIL TANKER TO BE POWERED BY LNG triennium. I look forward to building liquefaction capacity was added. In year for the industry, with growth on the great work that has been done an engineering milestone, the first in trade and investment. A vibrant under previous Presidencies, and project utilizing a floating liquefaction LNG industry, and the increased to intensifying collective efforts to conversion, Kribi FLNG in Cameroon, use of natural gas in general, brings advance the role of liquefied natural was brought online. great benefits to society. It improves gas (LNG) in a sustainable energy security of electricity supply and offers future. The IGU is pleased to present 2018 marked a positive turn for opportunities to meet emissions the 2019 World LNG Report at LNG19 project developers. Four projects took targets and facilitate vital access to in Shanghai, highlighting physical FIDs in 2018 (Corpus Christi LNG T3, energy in diverse markets around the and market developments in the LNG LNG Canada, Greater Tortue FLNG globe. It also has a significant impact industry around the world. and Tango FLNG), with a number of on improving quality of life by reducing significant projects expected to reach air pollution, especially as population The report demonstrates that 2018 FIDs in 2019. growth continues. A combination of was another strong year for LNG natural gas and renewables will allow by a range of metrics. For the fifth The overall global LNG fleet grew the developing world to meet the Paris consecutive year, global LNG trade set by 11.5% in 2018, and spot charter commitments affordably, without a record, reaching 316.5 million tonnes rates soared. As 51.8 MTPA of new sacrificing economic growth. (MT). This marks an increase of 28.2 liquefaction capacity is expected to MT (+9.8% year-on-year) from 2017. start up in 2019, the shipping market Our aim at the IGU is to demonstrate Specifically, non-long-term LNG trade may become tighter with only 43 that natural gas has a vital reached 99 MT in 2018, an increase newbuild deliveries targeted in the environmental and economic role to of 14.5 MT year-on-year (YOY) and year. play in the sustainable energy future, accounted for 31% of total gross LNG and that the industry is open to co- trade. This substantial expansion can Global regasification capacity has operate with the global community be attributed to increasingly flexible continued to increase, rising to 824 towards achieving this future. LNG supply. Most LNG-related prices MTPA by February 2019. Of the under- around the world followed an upward construction capacity, 36.4 MTPA of trend in 2018, influenced by rising oil much needed capacity is anticipated prices and strong LNG demand in Asia. online during 2019, much of it in India CLEANER BURNING. Shell LNG can contribute to lower local exhaust emissions and global greenhouse China and South Korea continued and China. Both markets, however, gas emissions. It also supports shipping in meeting current and expected IMO MARPOL Annex VI Sulphur to lead demand growth driven by have struggled to develop related policies to improve air quality. infrastructure at the same pace, and NOx limits. COST COMPETITIVE. Shell LNG is cost competitive with alternative compliant fuel solutions. LNG AVAILABILITY. Shell offers a worldwide LNG marine bunker network and continues to develop key supply locations to serve customers who have committed to LNG fuel as their bunker fuel. LNG EXPERIENCE & EXPERTISE. Shell is an experienced LNG supplier and works closely with many Yours sincerely, leading OEMs. Our expertise can help during ship design processes, logistics planning, emissions calculations and other marine transport challenges. CONTACT YOUR SHELL LNG EXPERT [email protected] Joe M. Kang shell.com/lngfuel President of the International Gas Union 3 IGU World LNG report - 2019 Edition State of the LNG Industry 2. State of the LNG Industry1 Barcelona LNG Terminal - Courtesy of Enagas Global Trade Short, Medium, and Long-term LNG Market Global Prices Liquefaction plants (as defined in Chapter 10) online, more than offsetting Non-long-term LNG trade 2018, this was 36% higher than LNG T3 reached commercial lower production from several reached 99 MT in 2018, an their level in May 2017. While operations in February 2019. legacy projects. Australia led increase of 14.5 MT YOY, and this resurgence is notable, spot After Russia, the most capacity all exporters in incremental accounted for 31% of total prices showed some signs of was added in Australia, where growth (+12.2 MT), supported gross LNG trade. This marks weakness toward the end of 393 MTPA two trains at Wheatstone LNG by the new Wheatstone LNG the second year in a row that 2018, as a thus far mild winter Global nominal reached commercial operations and Ichthys LNG projects. The the non-long-term market $9.78 in Asia and Europe, coupled in 2018. By mid-2019, the final United States was again the has substantially expanded, with the continued ramp-up liquefaction capacity, projects in Australia’s recent second-largest driver of LNG which can be attributed to of new supply, started to place February 2019 build-out, Ichthys LNG and supply growth, adding 8.2 MT growing LNG supply and /MMBtu downward pressure on spot Prelude FLNG, are expected to as trains at Sabine Pass LNG demand elasticity. As with Average prices, with average Northeast have reached full commercial 316.5 MT operated for the full year and total global trade, short-term Northeast Asian Asian spot prices falling by operations (a combined 12.5 Global trade Cove Point LNG came online. supply and demand growth spot price, 2018 18% between November 2018 MTPA). Still, the United States Asia remained the driver of was strongest in the Pacific and January 2019, landing at Global liquefaction capacity is poised to surpass them both in 2018 international LNG demand Basin. New liquefaction $9.36/MMBtu. European spot remains in the extended phase in incremental liquefaction growth, as China broke its own capacity added during the prices climbed for most of the of build-out that began in capacity as it brings online over record for incremental LNG by 99 MT year was contracted mostly year, though a large influx of 2016, driven largely by capacity 29 MTPA of liquefaction capacity importing an additional 15.8 MT Non-long-term to aggregators with diverse LNG in the fourth quarter of additions in Australia, the United during 2019. As of February in 2018. This was again driven trade, 2018 LNG trading portfolios. the year began to place some States, and Russia. Between 2019, 101.3 MTPA of liquefaction by the strong enforcement Particularly notable was the Most LNG-related prices around downward pressure on market January 2018 and February capacity was under-construction of environmental policies increase in short-term supply the world followed an upward prices like the United Kingdom’s 2019, 36.2 million tonnes per or sanctioned. With increasing designed to promote coal-to-gas from Australia, which had the trend in 2018, influenced by National Balancing Point (NBP), annum (MTPA) of liquefaction optimism for LNG import needs switching as well as continued largest increase in non-long- rising oil prices and strong LNG compounded by the fall in oil capacity was added, though during the 2020s, 21.5 MTPA of economic growth. Other key term exports (+6.4 MT) despite demand in Asia. Several price prices. After hitting a peak of 5.6 MTPA was assumed to liquefaction capacity reached a markets that drove global LNG holding long-term contracts markers experienced some $9.54/MMBtu in September be decommissioned. In an final investment decision (FID) For the fifth consecutive year, growth included South Korea, directly with many end- volatility in the spring and 2018 – over 50% higher than its engineering first, the first project in 2018. This includes 14 MTPA global LNG trade set a record, India, and Pakistan, which markets. The largest growth summer months, but a cold level in the previous year – NBP utilizing a floating liquefaction of capacity at LNG Canada reaching 316.5 million tonnes took in a combined 12.8 MT in non-long-term imports winter at the start of the year began to decline in October conversion, Kribi FLNG in T1-2 and 4.5 MTPA at Corpus (MT). This marks an increase of of incremental imports. The was in China, which took in an and active spot buying in China and had reached $7.44/MMBtu Cameroon, was brought online.