Global Regasification Capacity Set to Exceed 160 Bcfpd in 2024: EIA

Fifty-five countries are set to have liquefied natural gas (LNG) terminals by the end of next year with a combined regasification capacity of 163 billion cubic feet per day (Bcfpd), the USA Energy Information Administration (EIA) has said.

The projected capacity is an expansion of 16 percent or 23 Bcfpd compared to 2022 with seven nations having their first import terminals, it said basing the forecasts on data by the International Group of LNG Importers and trade press.

In the first seven months of 2023 three countries started importing LNG for the first time: Germany, the Philippines and Vietnam, the EIA noted.

"By the end of next year, we expect Antigua, Australia, Cyprus, and Nicaragua to start importing LNG", it said. "Several more countries are in advanced stages of developing LNG import capacity."

The EIA expects Asia to lead the growth in global regasification capacity in 2023 and 2024 accounting for 52 percent or 11.9 Bcfpd. Europe would comprise 30 percent or 8.6 Bcfpd and the rest of the world 10 percent or 2.3 Bcfpd.

The bulk of the Asian expansion, at 8.5 Bcfpd, is projected to be in China. "China was the country that had the most LNG imports in 2021, but its LNG imports declined in 2022, mainly because of the COVID-19-related economic slowdown", the EIA said. "India expects 1.3 Bcf/d of LNG regasification capacity to be online by the end of 2023 with two new terminals: Dhamra LNG and Chhara LNG."

In new markets the Philippines and Vietnam, additions of 1.1 Bcfpd in 2023 and 0.1 Bcfpd by the end of 2024 are expected respectively.

In Europe, lower natural gas imports by pipeline from Russia would drive regasification capacity growth by one-third by the end of 2024 against 2022, the EIA said.

"Germany began importing LNG this year as operators fast-tracked construction of regasification capacity by using Floating Storage and Regasification Units", with three terminals put into operation and three more under construction for an expected startup by the end of 2023, it said. Germany's LNG terminals can regasify up to 3.7 Bcfpd collectively, according to the EIA.

"Eleven other [European] countries will each add between 0.1 Bcf/d and 0.7 Bcf/d of new or expanded regasification capacity for a combined 4.9 Bcf/d of additions", it added. "Cyprus is also expected to start importing LNG in 2024."

In the Americas, Brazil is projected to add 1.8 Bcfpd in regasification capacity in 2023, while Nicaragua and Antigua and Barbuda will together add 0.1 Bcfpd as first-time LNG importers.

Elsewhere, "Australia, although also one of the world’s three largest LNG exporters, will add 0.3 Bcf/d of regasification capacity through a new offshore terminal on its eastern coast", the EIA said.

Raising Capacity for Market Insulation

The decade to 2022 has seen global regasification capacity rise 49 percent to 140 Bcfpd across 48 countries, the EIA said.

While further expansion is expected, available regasification capacity has already been exceeding LNG import volumes with only 39 percent of the capacity used per year, according to the EIA, saying countries use spare capacity to stockpile for demand-high periods.

"Spare regasification capacity, most of which is in Japan, South Korea, and China, allows countries to meet occasional demand spikes, particularly in winter", it said. "Last year, global LNG trade used 37 percent of available regasification capacity, or 51.7 Bcf/d."

Having more terminals in different parts of the globe could also help stabilize LNG prices in the long term by achieving market integration, according to the International Monetary Fund (IMF) in a report May 23.

Natural gas has a “partially fragmented global market” because it relies mainly on pipelines for transport, “unlike the market for crude oil, which is more integrated and tends to trade at a single price in most places”, the Washington-based lender said. “Such fragmentation in the natural gas market means not only that prices differ across regions, but also that high prices in one part of the world don’t necessarily transmit to buyers in other places”.

While unstable pricing formulas can still keep prices high for consumers despite an expanded regasification capacity, the IMF said "truly global gas markets that are balanced across regions” in terms of regasification capacity help limit price increases by guarding against supply shocks.

It said “expansions to global LNG export capacity are needed to bring European and Asian prices back to historically normal levels over the longer term”.

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