The global LNG market for 2015 is set to grow between 2.1% to 2.5% in 2015 according to the latest forecasts from CEDIGAZ.
Compared to the previous year, the first quarter of 2015 showed changing dynamics – with the second quarter confirming this trend.
The Asian market remained soft, with lower demand and increased output in the Pacific Basin. European net imports grew, during this period, as gross imports increased and re-exports collapsed – with emerging players integrated in the market.
Interestingly, their data indicates the rush for LNG in the United States is coming to an end.
Overall, from January to June, average import prices fell by 43.2% in Japan, 36.2% in South Korea and 14.2% in China. In Japan, Cedigaz expects long-term prices to decline further, from $9.8/mmbtu in October to $7.2/mmbtu in December and average import prices to reach $8.5/mmbtu on average in Q4 2015, assuming an average spot LNG price of $7.4/mmbtu.
LNG purchases of the Asian top-three buyers (Japan, South Korea and China) decreased by 6.2% year-on-year in the second quarter of 2015, from 32.4 million tons to 30.3 million tonnes.
The decrease was pulled by a 7.5% drop year-on-year in Japan (-1.5 million tonnes) and a 7.5% drop in South Korea (-0.5 million tonnes). In South Korea, demand for LNG fell due to above average temperatures, the negative impact of Asian economic turmoil on industrial production and increased competition from coal in the power sector.
In China, imports grew by 2.5% year-on-year in Q2 2015 but decreased overall by 3.8% year-on-year in H1 2015 from 9.9 million tonnes to 9.5 million tonnes as a consequence of the slowdown of natural gas demand growth in the country and increased pipeline imports.
In Europe, LNG net imports grew by 16.8% year-on-year in Q2 2015, following a 35.9% year-on-year growth in Q1. In Q2 2015, Europe imported 8.71 million tonnes of LNG against 7.46 million tonnes in Q2 2014. To a lower extent than in the first quarter of the year, Northwest European markets continued to absorb flexible LNG diverted from Asia. In Spain, the largest importer in Europe, LNG net imports rebounded significantly, from 1.31 million tonnes in Q2 2014 to 2.07 million tonnes in Q2 2015 (+57.9%), as reloaded volumes collapsed by 66.4%, from 1.4 million tonnes to 0.47 million tonnes and as natural consumption was boosted by the power sector.
In the rest of the world, the weight of LNG new players has grown over the second quarter of 2015. During this period, the group of three new importers composed of Pakistan, Egypt and Jordan received about 1 million tonnes of LNG, including 0.68 million tonnes from Qatar. In the United States, signs of the end of the rush for LNG projects begin to show: no new project has applied for an export license to the Department of Energy during the quarter (this had not happened since Q1 2011), the first withdrawal from the FERC process by a project was announced by Excelerate Energy, and more FID schedules are facing increasing delays.