Industry Trend Analysis - Large-Scale LNG Still Facing Roadblocks - MAY 2017

BMI View: Expectations of a growing LNG oversupply continues to inhibit the sanctioning of major proposed LNG liquefaction projects. We only forecast four final investment decisions for LNG projects in 2017 and 2018.

Large-scale LNG projects continue to face challenges with reaching a final investment decision (FID) given the growing expectation of an impending LNG oversupply. A wave of new liquefaction capacity, largely from Australia in 2017 and then the US in 2018 and 2019, will keep the market well supplied. New gas demand will be supported by environmental policy and new LNG markets in the next five years, though growth will not match the pace expected in liquefaction capacity additions ( see ' Downside Risks Linger To LNG Supply Growth ' , March 6).

Adding to the collection of LNG project cancellations observed over 2016 ( see ' More LNG Project Delays Ahead ' , March 2 2016), two of the largest gas producers in the world are postponing projects. Shell shelved its (up to) 21mn tonne per annum (mtpa) Prince Rupert island development in Canada, while Gazprom delayed its plans for a 10mtpa facility Ust Luga export project on the Baltic.

Supply Pressures Yet To Peak
Cumulative Global Liquefaction Capacity Additions, mtpa
Source: BMI LNG Projects Database

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