Key highlights from 2016
A quick overview of natural gas world in 2016
Early signs of the emerging LNG glut appeared
Liquefaction capacity continued to increase, with an additional 31 billion cubic meters per annum (bcma) coming online in 2016. Meanwhile, in 2016, the world continued to build LNG liquefaction capacity for the future; the total under construction was 156bcma.
Global LNG trade grew strongly, by 6% in 2016.
LNG prices continued to decline and converge. This price level is below full capital recovery economics for some new LNG projects, which raises questions about the long term sustainability of such prices unless LNG capital project costs are reduced.
Gas consumption continued to rebound in Europe
European gas consumption grew by more than 6% in 2016, accelerating the rebound which emerged in 2015 following significant consumption decline from 2009-2014. This was led by the power sector in particular.
Consumption in Asia continued to grow, led by a rebound in India and continuing growth in China
Indian consumption surged an estimated 9% in 2016 and consumption in China grew by 8%, driven by government policies to expand. Excluding China and India, consumption growth across the rest of Asia was less than 1% in 2016, highlighting continuing barriers to gas consumption growth in the region relating to cost competitiveness and the availability of supply infrastructure.
Gas production rose strongly in Australia and the Middle East and levelled off in North America
In 2016, Australian gas production rose by 19% driven by LNG project completions. Production also rose in the Middle East (2.2%), driven by Iran and Saudi Arabia, and in Africa, driven by Algerian export growth. Meanwhile, marketed production marginally declined in North America, due to a fall in associated gas production given the market response to oil prices.
02 October 2017 - 11:23 CEST