boxscore data indicates a 76% growth in new gas processing...
TRANSCRIPT
As natural gas becomes the fastest-growing fossil fuel, the world has entered a “golden age” for gas. Growth on both the supply and demand sides has resulted in the announcement of billions of dollars of capital investment across the globe. This includes the construction of LNG export and receiving terminals, cryogenic and gas processing plants, fractionators, pipelines, storage facilities and large investments in the exploration and production sector.
These capital investments are necessary to supply forecast demand for natural gas. The US Energy Information Administration (EIA) forecasts that global gas consumption will increase annually to 185 trillion cubic feet (Tcf) by 2040. This increase is led by strong growth in non-OECD countries, which collectively account for more than 70% of the total growth in natural gas production to 2040.
With the sharp increase in natural gas demand over the next 30 years, countries are taking the necessary steps to monetize this valuable resource. The following information for the gas processing sector construction forecast was gathered primarily through Hydrocarbon Processing’s Boxscore Database.
US. The US EIA forecasts US gas production will increase from 21.6 trillion cubic feet (Tcf) in 2010 to over 37 Tcf in 2040. This development has established the US as the world’s leading gas producer and has significantly increased new project construction announcements over the past three years (Fig. 1.). This includes the construction of dozens of cryogenic and gas processing plants, NGL fractionators, small, mid-level and mega-sized GTL plants, as well as positioned the country to become one of the world’s leading exporters of liquefied natural gas (LNG) by the end of the decade.
US companies aim to construct over 200 million tons per year (MMtpy) of LNG export capacity over the next several years. Almost two dozen LNG export facilities are awaiting approval from the US Department of Energy to export LNG to non-Free Trade Agreement (non-FTA) nations. To date, only a handful has received non-FTA export approval from the US DOE. These include such projects as Sabine Pass, Dominion Cove Point LNG, Freeport LNG and Lake Charles liquefaction. If additional projects are greenlighted and completed, the US is poised to become an LNG-exporting powerhouse by the end of the decade.
Canada. Due to the recent shale gas boom, the US no longer needs to import excess natural gas from Canada. To offset this financial hit, Canada has planned over 50 MMtpy of LNG export capacity. This includes over a dozen LNG terminals to be constructed, primarily on British Columbia’s Pacific Coast at Kitimat, Prince Rupert, Lelu Island and Grassy Point. Two additional LNG terminals have been proposed in Nova Scotia on Canada’s east coast. Almost all of the country’s LNG exports will target high natural gas demand in Asian markets.
Asia-Pacific. The Asia-Pacific region is expected to surpass Europe as the world’s second-biggest natural gas market as early as 2015. Dozens of liquefaction and regasification terminals are planned or already under construction. Chinese LNG imports reached 15 MMt in 2012 and are expected to double by 2015. To prepare, China has planned over a dozen new import terminals for completion by 2020. However, plans could change should China successfully develop its domestic shale gas reserves. Due to looming threat of supply shortages, China is also investing over $13 billion (B) to construct two dozen underground gas storage (UGS) tanks by 2015. To date, China’s gas storage capacity equals about 2% of the nation’s consumption, which is much lower than the global average storage capacity of 12%. China will also focus on LNG storage expansion where UGS construction is not feasible.
Presently, Indian gas production meets about half of domestic demand. However, Indian gas demand is forecast to triple by 2017, and Reliance and ONGC have reported falling output from their
300
250
200
150
100
50
TOTAL ACTIVE GAS PROCESSING PROJECTS BY REGION 2011–2013
Africa Asia-Pacific Canada W. Europe E. Europe/Russia
Latin America
Middle East U.S.
2011
2012
2013
5
10
15
20
25
30
35
40
45
50
NEW GAS PROCESSING PROJECTS BY REGION 2011-2013
Africa Asia-Pacific Canada W. Europe E. Europe/Russia
Latin America
Middle East U.S.
2011
2012
2013
New Gas Processing Projects by Region: 2011–2013
Gas Processing Global Construction Forecast
Hydrocarbon Processing’s Construction
Boxscore data indicates a 76% growth in new gas processing project announcements within the past year.
offshore blocks. Demand from gas-consuming industries, such as power and fertilizer, are rising steadily. This scenario has forced India to import gas, mainly in the form of LNG. In response, India is expanding capacity at its LNG terminals and has proposed the construction of over a dozen LNG terminal projects in the next several years. This includes floating LNG (FLNG) facilities such as the Kakinada LNG Import Terminal, and the industry’s first barge-based FLNG regasification unit offshore Andhra Pradesh.
Australia is investing over $160 B in LNG terminal construction and an additional $85 B for FLNG facilities, such as Shell’s Prelude FLNG vessel. The majority of these projects are scheduled to be operational by 2017, but high labor costs and cost overruns could threaten construction time lines.
Indonesia is also expanding its LNG export capacity with the Donggi-Senoro LNG project and the Tangguh LNG Train 3 expansion project. Combined, these projects will add 6 MMtpy of LNG export capacity by 2019, at a cost of $15 B.
Singapore has a rich history as an oil trading hub, and it plans to become the region’s first LNG trading hub. Singapore LNG competed construction on its $1.7-B bidirectional LNG terminal at Jurong Island in mid-2013; construction on additional storage tanks is ongoing until 2017. Due to high demand, a second terminal is planned. Operations are scheduled to begin sometime between 2025 and 2030.
Directly challenging Singapore’s plan to become a regional LNG trading hub is Malaysia. Malaysia is constructing its own bidirectional LNG terminal at Pengerang. Additional Malaysian gas projects include a ninth train at Bintulu and two FLNGs – PFLNG 1 and PFLNG 2.
Europe. The European region is the second largest gas market in the world, but is forecasted to be overtaken by the Asia-Pacific region by 2015. Natural gas production in OECD Europe is in decline and has forced European countries to become more dependent on LNG imports. Conversely, non-OECD countries, primarily Russia will see a dramatic rise in LNG terminal construction. Russia alone is spending over $50 B to reach at least 40 MMtpy of LNG export capacity by 2020. This includes LNG projects at Yamal, Pechora, Sakhalin and Vladivostok. If completed, this capacity would raise Russia’s global LNG market share from 5% to 11% in just six years.
Poland, Ukraine and Uzbekistan have all announced major gas processing projects. These projects are mainly being constructed to reduce dependency on gas imports from Russia. Once completed, these projects will represent almost 20 billion cubic meters per year (Bcmy) of additional capacity at a cost of over $7 B.
Additional capital intensive gas projects are also taking place in Western Europe. This includes LNG receiving terminal construction such as EDF’s Dunkirk LNG terminal project and Estonia and Finland’s construction of joint terminals on either side of the Gulf of Finland.
Africa. Gas production in Africa surpassed 210 Bcm in 2013, and production is expected to double to over 400 Bcm by 2040. Even with increased production, natural gas consumption in Africa accounts for a little over half of the region’s supply. With hefty development plans in place, exports will play a vital role in the African gas industry. Installed LNG export capacity equals just over 70 MMtpy.
Major gas finds in East Africa, specifically Mozambique and Tanzania, have opened a new chapter in Africa’s gas industry. From exploration and production activities to onshore mega-LNG export terminals, East Africa has become a hotbed for large capital investments. Plans are in place to construct the world’s largest LNG export facility in the Cabo Delgado province Mozambique and a $15 B, 10-MMtpy LNG export terminal in the southern Lindi region of Tanzania. With both countries accounting for nearly 90 Tcf of recoverable gas resources, East Africa has the potential to become a major global gas hub.
Latin America. Latin and South America rely on natural gas for power generation. South America’s gas demand is forecasted to surge 29% between 2011 and 2017. Petrobras is planning several LNG projects that could make Brazil a Latin American LNG hub. Brazil is constructing several floating production units such as FPSO and FSRU vessels to operate in Brazil’s pre-salt fields. In 2014, Excelerate Energy will deliver the VT3 vessel which is the largest FSRU vessel in the industry. Petrobras is also working with HRT Participacoes to deliver LNG to remote inland destinations using small river barges. If the concept is adopted, this method could be utilized throughout South America to ensure that LNG cargoes reach isolated areas.
Middle East. The Middle East holds more than 40% of the world’s proven natural gas reserves. Forecasts show regional demand should double through 2035 on increased power needs and industrial use. Major active capital intensive projects include the $10.5 B Barzan Gas project in Qatar, the $18 B Basra Gas development and FLNG plant in Iraq, the $1.6 B Khazzan CFP project which is part of BP’s $24 B Khazzan field development in Oman and the Jazan Integrated Gasification Combined Cycle project in Saudi Arabia.
300
250
200
150
100
50
TOTAL ACTIVE GAS PROCESSING PROJECTS BY REGION 2011–2013
Africa Asia-Pacific Canada W. Europe E. Europe/Russia
Latin America
Middle East U.S.
2011
2012
2013
5
10
15
20
25
30
35
40
45
50
NEW GAS PROCESSING PROJECTS BY REGION 2011-2013
Africa Asia-Pacific Canada W. Europe E. Europe/Russia
Latin America
Middle East U.S.
2011
2012
2013
Total Active Processing Projects by Region: 2011–2013
Gas Processing Global Construction Forecast
www.ConstructionBoxscore.com
Expanded Detail and Scope
This Report Powered by:
Hydrocarbon Processing’s Construction
For more than 60 years, Hydrocarbon Processing’s Construction Boxscore Database has been the definitive resource to locate project details for construction activity in the global hydrocarbon processing industry. Updated daily, the database includes comprehensive data on active gas processing and LNG projects all over the globe. Hydrocarbon Processing’s Construction Boxscore Database is used by engineers, contractors, business developers and marketing personnel to identify active construction projects around the world for lead generation, market research, trend analysis and planning. New and updated project related information is posted daily and search results can be exported to Excel in a CVS format.
Project information includes:• Contact information for key personnel
• Total and per unit project cost
• Project location: region, country/state, city
• All companies associated with the project (operator, EPCs, licensors, etc.)
• Project scope/history
• Capacity
• Status of project
• Estimated year of completion
• Maintenance/expansion codes
www.ConstructionBoxscore.com
The Opportunities are Limitless.Discover how Hydrocarbon Processing’s Construction Boxscore Database can help you make informed business decisions, recognize trends and increase sales to the global gas processing and LNG industries.
Construction Boxscore Database Subscriber Benefits:• Full access to the Construction Boxscore Database’s searchable online database of global construction projects in the gas processing and LNG industries
• Project details including scope, associated companies, investment costs, key personnel contact information, status, capacities, location and more
• Strategic personnel finder research. If you need a specific contact for a project, our global staff of researchers will find it
• Complimentary construction archived reports
• Project news published daily and available on the website
• The weekly Boxscore Newsletter with project alerts and trend analysis
• Unlimited access to HydrocarbonProcessing.com and GasProcessingNews.com’s powerful archives of technical articles, reference information, process handbooks and more
Sign up for a Boxscore DemoConstructionBoxscore.com/Demo
Subscribe Today
ConstructionBoxscore.com/Subscribe
Lee NicholsDirector of Data Division
Phone/Fax: +1 (713) 525-4626