The LNG industry now has optimistic prospects

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Delegates from various countries and industry leaders attending the 18th International Liquefied Natural Gas Conference in Perth, Australia, said that despite the current oversupply issue facing the liquefied natural gas industry, they remain cautiously optimistic about its long-term prospects. 3.jpg 　　Slumping market 　　Over the past few years, the international energy market has undergone significant changes. In the demand sector, due to the weak world economy, global demand for primary energy products has decreased. In the supply sector, a new energy revolution driven by technologies such as shale gas extraction has led to a significant increase in the production of energy sources such as natural gas ； The liquefied natural gas projects launched some time ago are gradually entering operation, which has also led to an increase in supply. Furthermore, low international oil prices have also dragged down liquefied natural gas prices. 　　For Australia, the host country of the conference, the circumstances when it secured the hosting rights 6 years ago are very different from those today. According to local media, during the boom in the mining sector, investments in liquefied natural gas projects across Australia amounted to as much as 200 billion Australian dollars (approximately 153.2 billion US dollars). Due to factors such as high initial investment and long construction periods, projects often experience issues such as cost overruns and delays in completion. Today, although several projects have achieved production capacity, the plummeting prices of liquefied natural gas have imposed a heavy debt burden on these companies. 　　Australian company Woodside Energy recently announced the suspension of the Bruce offshore liquefied natural gas project, which involves an investment of 50 billion Australian dollars (approximately 38.3 billion US dollars). The company’s CEO, Peter Coleman, said on April 12 that going forward the company will adopt a small-scale, phased approach to developing the Rolls project in order to maintain financial balance. 　　Meanwhile, energy giant Chevron in Australia has to deal with the problem of cost overruns on the Gorgon project, which amount to $54 billion. 　Shell’s CEO Van Beurden lamented the challenging prospects in the liquefied natural gas sector. A renowned rating agency, Standard & Poor’s, recently released a report predicting that the industry will continue to face difficulties in the coming years. 　　Positive factors for the future market. However, pessimism did not overshadow this conference. Both *** companies and industry giants hold a cautiously optimistic view regarding the future of the liquefied natural gas industry. 　　Josh Frydenberg, Australian Minister for Resources and Energy, said that despite the challenges faced by the liquefied natural gas industry, its fundamentals remain strong. It is estimated that over the next 5 years, 455 million people worldwide will move from rural areas to cities, which will result in a huge demand for energy. Furthermore, the International Energy Agency predicts that global demand for natural gas will increase by 50% from now until 2040. 　　Western Australia’s Governor Colin Barnett said that currently 41% of the world’s electricity comes from coal-powered generation, while only 22% comes from natural gas; in China, the proportion of electricity generated from natural gas is only 5%. The Western Australia Department of Development predicts that demand for liquefied natural gas in the Asia-Pacific region will rise from 180 million tons in 2014 to 225 million tons by 2020, and reach 245 million tons by 2025. 　　Australian Prime Minister Turnbull said that by 2020, Australia is expected to become the world’s largest exporter of liquefied natural gas, with exports reaching 75 million tons – three times the current level. 　　Marten Wesselaar, head of Shell’s natural gas business, believes there are three factors that will drive growth in demand for liquefied natural gas. First, an increasing number of ** and regions will use liquefied natural gas; it is expected that the number of ** and regions importing liquefied natural gas will rise from 30 at present to 50 by 2030 ； Secondly, liquefied natural gas will surpass electricity as a true global commodity, with its use expanding from power generation to serving as a fuel for large-scale transportation on land and at sea ； Third is the drive of global climate change; as more countries and regions formulate sustainable energy development plans, replacing coal with natural gas as the primary source of electricity is the most practical and cost-effective way to reduce emissions. The International LNG Conference is the highest-level event in the industry, held every 3 years. This conference attracted over 5,000 representatives from around the world to attend the events and exhibitions. The 19th International Liquefied Natural Gas Conference will be held in China in 2019.