LNG Terminal Market - Growth, Trends, and Forecast (2020 - 2025)

The growth of global LNG receiving capacity, in 2018, was 22.8 MTPA, and, the size of the LNG receiving capacity, is expected to increase at a CAGR of approximately 5.9 % year on year, till 2025. The natural gas consumption grew by 5.3% in 2018 compared to the previous year. Therefore, factors such as increasing demand for natural gas coupled with its low-price characteristics, are expected to drive the market for LNG terminals during the forecast period. However, steep fall, after 2018, prices have caused concern on the supply side about the price going below the production cost.

• The floating terminals market segment is expected to be the fastest-growing market as new facilities are being constructed around the globe, especially in developing economies, including but not limited to Kaliningrad LNG Terminal in Russia and Jaigarh LNG Terminal in India. They have become more attractive as they can be constructed at low cost and less time.
• As more economies are joining in the gas network with Bangladesh and Panama becoming the newest members, in 2018. It is expected that the business will become more profitable with economies of scale, helping in increasing the profits, more so, after 2024.
• The Asia Pacific region is expected to dominate the market, with the majority of the demand coming from countries such as China and South Korea.

Key Market Trends

Floating Storage Regasification Unit to Witness Huge Growth

• Floating Storage Regasification Unit (FSRU) is constructed under a leasing contract. Capital expenditure (CAPEX) investment in such projects is much lower compared to what is required in an onshore facility. However, In the long run, it is more profitable to go for an onshore facility as it requires lower maintenance.
• Floating facilities are cheaper to build and, therefore, can become a bridge for entry of developing economies, in the use of natural gas, to provide clean energy to its citizens. The lower price of natural gas, especially after the shale gas boom, has made the market more suitable for developing economies.
• Bangladesh built its first floating facility, in 2018, in the Bay of Bengal, named Moheshkhali, which is expected to help it to use natural gas to develop its economy.
• The Floating facility segment is going to help more economies to join and, therefore, help rapidly increase the LNG Terminal Market in the forecast period of 2020-2025.

Asia-Pacific to Record the Highest Growth

• LNG import growth, in the year 2018, was driven by China and South Korea. They accounted for nearly 80% of the growth (net) in the year 2018, with a combined incremental growth of 22.2 MTPA.
• 9 out of 19 terminals, which are being built (both planned and partially constructed), in the Asia-Pacific region, till February 2019, are being made in China. Almost 20 MT is expected to be added in capacity by 2022 with new terminals, among many, opening in Shenzhen and Wenzhou.
• India is also expected to add a capacity of 19 MTPA by 2021, with new terminals being built in Mundra and Dharma Port. Ennore LNG, 5 MTPA, terminal was started in March 2019.
• The region is expected to lead the growth in LNG Terminals till 2025 and help in increasing the demand for natural gas.

Competitive Landscape

The LNG Terminal market is fragmented. Some of the key players operating in the market include Tokyo Gas Co Ltd, Petronet LNG Ltd, Royal Dutch Shell PLC, Samsung C&T Corporation and CTCI Resources Engineering Inc.

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