LNG projects to see record high FID in 2019
Gas Asia Summit, the international conference of liquefied natural gas (LNG) sponsored by DMG was held in Singapore during Oct 30-31. Many attendees of the conference expected that the number of the final investment decision (FID) for LNG projects would hit the highest ever in 2019. The outlook came as there were persistent prospects that supply/demand fundamentals for LNG would tighten around 2025. In addition, several attendees said that the increase in the FID was in response to the downturn in the number of the FID during 2016-2018. A Singapore dealer said, "Canada's Woodfibre LNG has a high chance to reach the FID by the end of the year." Woodfibre LNG planned an LNG project in Squamish, British Columbia province in Canada.
The number of FID was believed to increase firmly in the next two years. There were several projects which were expected to reach the FID; The No.7 train in the Nigeria LNG project, the expansion plan at the Pluto LNG project in Australia, the No.3 train at the PNGLNG project in Papua New Guinea, the large scale expansion plan in Qatar, the Port Arthur project in the US, and the expansion plan at Vystosk plant by Russia's Novatek.
As for future trends in the LNG market, several market players said that low-cost LNG might be more popular, and another player prospected that US-like FOB based selling or Tolling system would also spread to other regions. Many attendees also said that contract periods could be shortened to 3-15 years. As for the contract prices, many end-users shared outlooks that the benchmark in spot prices for LNG deals in Asia would be used for setting price formulas of the contract prices. But many producers of giant projects insisted that the benchmark was unlikely to be adopted due to extremely small liquidity of LNG spot deals in Asia, so that crude oil prices and Europe's natural gas prices would continue to be used as benchmark for setting contract prices.