The Global LNG Market in 2015: Q2 First Estimates and Outlook

In the first quarter of 2015, first estimates of global LNG market announced changing dynamics compared to the previous year. Second quarter estimates confirm this trend as the Asian market remains soft with lower demand and increased output in the Pacific Basin. In Europe, Q2 saw net imports grow as gross imports increased and re-exports collapsed. New players such Egypt, Pakistan and Jordan are now integrated in the market while in the United States, Q2 seemed to mark the beginning of the end of the LNG rush. Overall, first outlook for 2015 sees a 2.1% to 2.5% growth year-on-year of the global LNG market to 240-241 million tons.

The Asian market remains soft

In Q1 2015, following the collapse of oil prices and under the influence of softening market conditions, LNG average import prices declined significantly in Asia. In Japan, prices plummeted by 19.4% from January to March and in South Korea, prices fell by 8.4% over the same period.

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The European LNG market in H1 2015: imports grew, reloads dwindled

European LNG net imports: + 27.8% year on year in H1 2015

LNG Gross Imports in EuropeLNG net imports increased significantly to 15.9 million tons in the first half of 2015 against 12.4 million tons in H1 2014 due to more deliveries and less reloads. Gross imports showed a two-digit growth rate or even more in all countries but France and Spain – where they decreased by 5% and 15.3% respectively – thanks to the capacity of liquid markets of Northwest Europe to absorb the LNG left available by Asian buyers. Overall, gross imports grew by 11.9%, mostly driven by imports in Belgium, the Netherlands and the United Kingdom. Together, these three countries received 6.88 million tons of LNG in H1 2015 against 5.04 million tons in H1 2014 (+36.7%), mostly from Qatar. The latter, which is diverting flexible LNG from Asia, exported 9.8 million tons of LNG to Europe in H1 2015 against 7.85 million tons in H1 2014 (+24.9%).

The Global LNG Market in 2015: Q1 First Estimates and Outlook

In 2014, the LNG year was somehow a replica of the previous one as it was characterized by rising Asian demand, decreasing European demand and a high price differential between the two biggest LNG markets. In 2015, as the trade data of Q1 show, the dynamics are likely to be different. First data show that the pressure on the Asian market is falling due to lower demand and growing production in the Pacific basin. In addition, gross imports are increasing in Europe while the re-export business is collapsing. Elsewhere in the world, the LNG industry continues to develop, as new projects keep coming on stream.

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