The natural gas world has gathered in Singapore this week to promote LNG as the fuel source of the future that is very much here in the present.
Some of the largest names in the energy sector both exhibited and made presentations to a growing audience at the Singapore Expo Centre.
The answer to the headline question – is there a bright future for LNG? – is a resounding yes, but the growth pattern is significantly different to that anticipated by producers, shippers and equipment suppliers alike.
After a slow start on day one, most companies and stands were reporting increased booth footfall during day two. This perhaps reflects the industry as a whole; after a bullish start 3-4 years ago, the rapid drop in oil prices in the past 18 months has definitely slowed the roll out of use, production and distribution of LNG.
Many of the industrial gas equipment manufacturers have built upon their cryogenic knowledge and moved into this space – plenty expect LNG to provide significant growth to their business and several report such growth, accounting for up to 50% of their business in a relatively short time.
However, the bullish forecasts have been toned back as the impact of lower oil prices and, in some regions such as the US, lower natural gas prices has impacted on LNG plans and projects – resulting in a reduction in growth expectations going forward.
It is clear that some companies in the gases industry were betting heavily on LNG as the growth driver – some appear to have paid a heavy price and have had to make significant adjustments to their future plans and business. A prime example of this is Taylor-Wharton; the company positioned itself to move rapidly into the LNG space and compete with its fellow equipment contemporaries, yet found itself filing for Chapter 11 in the US in recent weeks.
Companies such as Chart Industries and Cryogenic Industries have also been notably affected, and especially so in a North American market which has been impacted by lower global oil prices and, in turn, LNG development prospects.
Certainly those companies exhibiting at Gastech 2015 expressed the continued importance of LNG on their businesses – particularly in Asia and Europe. Many did, however, express reservations about the return to the rapid growth of 3-4 years ago and spoke of a slow rebound. The position they once expected to be in by 2016/17 may not now be realised until 2020, it is felt.
So the answer to the question posed by Gastech this week is still very much ‘yes’ – a bright future is inevitable, but at a slower pace until oil prices recover.
The latest cryogenic technologies and products were all on show at the event, demonstrating that the industry continues to innovate and adjust to market conditions.
For more information on Gastech, visit www.gastechsingapore.com