Industry Trend Analysis - Bucking The Global LNG Trend - APR 2017

BMI View : In contrast to the global trend, LNG demand growth in Europe will be led by developed and not emerging markets.

Global LNG demand growth will be heavily concentrated in emerging markets (EMs), supported by positive economic and demographic fundamentals, rapid energy demand growth, power diversification needs and the growing availability of lower cost and more flexible floating LNG import technologies. Europe is the one exception to this broader trend, with the rise in LNG imports to be led by the region's major developed markets (DMs).

Based on our data, Europe's net LNG imports will grow from an estimated 60.6bcm in 2016 to 95.8bcm by the end of our forecast period in 2026. Of this, 33.8bcm - or 96.0% of growth - will stem from DM demand, largely Spain, France and the UK. In part this reflects a return to pre-eurozone crisis norms; the pace of this return will be slow, due to continued weakness in the region's economy. We forecast real GDP growth averaging 1.6% in the period 2017-2021, compared to 2.0% in 2015 and 1.7% in 2016. There also remain significant downside risks to this forecast, not least elevated political uncertainty and large question marks around Brexit, which could disrupt a fragile economic recovery.

DMs Driving Demand
LNG Net Imports Forecasts, bcm
* DM = Spain, France, UK, Italy, Belgium, Portugal, Netherlands & Greece. EM = Turkey, Poland, Croatia & Lithuania. Source: BMI, National sources

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