The LNG industry GIIGNL ANNUAL REPORT 2019 REPORT GIIGNL ANNUAL GIIGNL ANNUAL REPORT2019 GIIGNL is a non-profit organisation whose objective is to promote the development of activities related to LNG: purchasing, importing, processing, transportation, handling, re-gasification and its various uses. The Group constitutes a forum for exchange profile of information and experience among its 81 members to enhance safety, reliability and efficiency of LNG import activities and the operation of LNG import terminals in particular. GIIGNL has a worldwide focus and its membership is composed of nearly all companies in the world active in the import and regasification terminalling of LNG. Key Figures 02 LNG trade in 2018 04 Contracts concluded in 2018 06 Medium-term and long-term contracts in force in 2018 08 LNG shipping 14 LNG imports in 2018 24 Liquefaction plants 32 contents Regasification terminals 37 World LNG Maps 46 Retail LNG in 2018 50 About GIIGNL 51 © GIIGNL - International Group of Liquefied Natural Gas Importers All data and maps provided in this publication are for information purposes and shall be treated as indicative only. Under no circumstances shall they be regarded as data or maps intended for commercial use. Reproduction of the contents of this publication in any manner whatsoever is prohibited without prior consent of the copyright owners. (Photo credits: © Elengy_Arnaud Brunet, Höegh LNG (cover) ; Inpex Corporation Mitsui O.S.K. Lines Ltd. ; Novatek ; Tokyo Gas Co. Ltd. ; AES) EDITORIAL The LNG industry in 2018 by the EU and US statement of intent in July or by the reciprocal tariff increase between US and China in September. In this context, affordability and flexi- bility are essential for governments and consumers. For LNG importers, long-term partnerships, destination and volume flexi- bility as well as the ability to optimize, or arbitrage, between Asian and European markets remain key. Notwithstanding the geopolitical tensions, the uncertainties regarding nuclear power in certain countries and the competitive pressure from cheap coal and renewables, big surges in LNG supply and demand are on the horizon. In China, in India and South East Asia, in particular, LNG’s environ- "For LNG importers, mental benefits and its versatility make it long-term partnerships particularly attractive as a destination fuel for thermal power generation and cogen- and flexibility remain eration, in the industrial and commercial key". sectors as well as in a growing variety of fields like marine and road transportation. Jean-Marie Dauger President Many long-term supply contracts are starting to expire and as new supply comes on-stream, our industry is on the verge Dear Colleagues, of profound changes in terms of market In 2018, the LNG market growth accel- tions in 2018, the commoditization of LNG structure. « The second gas revolution » , erated at a rate of 8%, with deliveries could still require some years to become recently projected by the International amounting to 314 MT or more than three a reality, although with several trains due Energy Agency, could well become « the times the level reached in 2000. to come on-stream in the US over the first LNG revolution », as the Japanese next two years, the additions of destina- minister of Economy observed in his state- New additions in liquefaction capacity, tion-free and non-oil indexed volumes will driven mostly by Australia, the United ment to the General Assembly of GIIGNL be substantial, and further enhance the in Fukuoka in November of last year. In States and Russia, were not as high as liquidity of the LNG market. might have been initially expected, due this (r)evolution, our industry will need to to some delays in start-ups in the United On the demand side, two new countries become more innovative and efficient in States. As in 2017, new volumes continued - Bangladesh and Panama - joined the trading and fully embrace opportunities to be absorbed by large Northeast Asian importers’ ranks last year, bringing the offered by digital technology. buyers, in particular by China where policy total number of importing countries to decisions to improve air quality contrib- 42, compared with only 18 ten years ago. Since 1964, more than 97 000 cargoes uted to a sharp increase in LNG imports Several other countries are planning to have been safely delivered. As the LNG for the third year in a row. commission or build onshore or floating industry is maturing, I am confident in LNG import infrastructure. As in 2017, GIIGNL’s ability to address the challenges In general, 2018 saw the return of an policy choices in the Asia-Pacific region ahead and to continue fulfilling its active market for LNG, with higher oil and largely drove the growth in LNG imports, missions: addressing issues common to spot LNG prices for most of the year and fostered by measures to improve air quality importers, diffusing knowledge and best record-high charter rates for spot shipping in China and by uncertainties regarding practices, with a particular and continuing during the last quarter. nuclear power in South Korea. In Europe, focus on safety and on the contribution cross-basin arbitrage opportunities Investment activity also rose with 3 FIDs continued to determine the level of LNG of LNG to a sustainable energy future. taken (LNG Canada, Corpus Christi Train inflows as the reduction of price spreads 3 and Tortue LNG) and a concomitant led to a strong rise of import activity in Yours Sincerely, increase in long-term contracting activity Northwest Europe towards the end of the spurred by large Asian and European year. Inversely, the combined LNG imports buyers, portfolio players as well as by emerging countries decreased last year, commodity traders. Besides signaling Jean-Marie Dauger mainly due to rising domestic production the industry’s renewed focus on strate- in Egypt and in Argentina, showing that gies to grow their supply portfolios, such LNG demand remains hard to predict. President activity was also a sign that security of supply remains a strong motivation for Last year we were also reminded that LNG LNG importers. In spite of a significant - as most energies – can become entwined increase in spot and short-term transac- in global politics, as evidenced for instance GIIGNL ANNUAL REPORT 2019 EDITION 2018 KEY FIGURES 313.8Mt imported 42 importing countries 20 exporting countries +8.3% growth vs. 2017 99.3Mt imported on a spot or short-term basis 2018Key figures 2 GIIGNL ANNUAL REPORT 2019 EDITION 2018 KEY FIGURES 76% of global LNG demand in Asia 44% of global LNG supplied from the Pacific Basin 32% of global LNG imported on a spot or short-term basis 2 10 new importing new regasification countries terminals 868MTPA total regasification capacity 406MTPA total liquefaction capacity GIIGNL ANNUAL REPORT 2019 EDITION 3 LNG TRADE IN 2018 LNG trade in 2018 In 2018, global LNG imports reached 313.8 million tons (MT), an increase of 24 MT or 8.3% compared with the previous year, the third largest annual increase behind 2010 and 2017. One new country (Cameroon) started exporting LNG in 2018, the number of exporting countries is now 20. Two new countries imported LNG for the first time (Bangladesh and Panama), bringing the total number of importing countries to 42. 5th consecutive year 24.2 MT to 8.4 MT because of the increase of LNG supply growth in US and Russian LNG production. New LNG supply volumes were mostly In 2019, the share of Atlantic Basin LNG driven by new production from Australia, supply in global trade is expected to !52% the United States and Russia. Many of the continue to increase, as 21 MT of new legacy projects did not perform as well liquefaction capacity is scheduled to come of US exports delivered as they did in 2017. While increased feed online in the United States. to Asia. 28% to the Americas. gas supply contributed to higher exports 13% to Europe and 7% to from Oman (+1.8 MT) and Trinidad (+1.4 China and South Korea continue the Middle East MT), a number of countries including Algeria, Nigeria, Malaysia and Papua New to drive global demand Guinea experienced a decline in exports. In 2018, Asia firmed up its position of In the Pacific Basin, Australia was the only leading importing region with a 76% country to record an increase in exports share of global LNG imports, up from (+11.1 MT). LNG supplies from Algeria (-2.2 73% in 2017. Asian LNG imports grew MT) decreased mainly due to an arbitrage by 13% to 238.6 MT. Japan remained the in favor of pipeline exports. Malaysian LNG leading importing country, with 82.5 MT exports (-2.2 MT) were constrained by or a 26.3% market share, followed by pipeline problems which affected natural China (54 MT). As was the case in 2017, 82.5!MT gas supply to the plant and in Papua New global LNG import growth in 2018 was imported into Japan, Guinea (-1.1 MT) the LNG plant was offline followed by China (54 MT) led by China and South Korea, the world’s for nearly two months following a major second and third largest LNG importers, earthquake in the Highlands region which which together received 21 MT more LNG damaged some of the project’s facilities. than in 2017. China’s policy of substituting Eight new onshore liquefaction trains coal by gas to reduce air pollution in major were commissioned in 2018: 3 in Australia cities and to complement domestic gas (Wheatstone Train 1 and Ichthys Train 1 production, meant that it consolidated its & 2), 3 in the United States (Sabine Pass position as second largest LNG importer Train 5, Cove Point and Corpus Christi globally and increased LNG demand by +38% Train 1) and 2 in Russia (Yamal Train 2 & 3).