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Major investment boom expected in LNG, gas shipping: conference

Monday, 13 February 2012 | 00:00
A major demand-driven investment boom in LNG is likely toward the end of this decade, estimated at some $263 billion, Graham Hartnell, manager of LNG and gas consulting at consultants Poten & Partners, said.
Hartnell was speaking at the European Gas Conference in Vienna, organized by The Energy Exchange.
He said that given the changes in the financial world, "this will require higher prices for gas." Predicting fewer sources of financing, he said the investments would involve "mainly project financing with greater participation by the principals involved."
Meanwhile, most of the new LNG capacities coming on line will focus on projects being completed in Australia, mainly to serve growing Asian markets, he said.
Dramatic expansion of transportation facilities will be needed to move gas to market, with the available shipping fleet to double within the coming 15 years, Hartnell said.
Speakers at the conference noted the current lack of transportation as one of the key factors limiting LNG expansion, although Ane de Arino Ochoa, strategic planning and control director at Repsol Gas Natural LNG, said the problem is the market, not supply. In Spain, she said, renewable energy is partly pushing out generation anticipated from gas.
Tim Gould, senior energy analyst at the International energy Agency, said LNG growth would be influenced by politicians. He said "the prospects are more dependent on governments and policies than on the markets," an example being the role of renewables as a replacement for fossil fuels.
Guy Broggi, head of LNG supply at Total Gas & Power, sees the North American market as becoming increasingly self-sufficient and isolated from global considerations.
Participants were in agreement that while substantial cutbacks of nuclear generating capacity in Japan and Germany could boost gas demand, this was not a critical factor in projecting market growth for LNG.
Shigeki Terada, senior manager for natural gas and upstream project development at Mitsubishi Corporation International Europe, pointed to a broad range in public estimates of the size of the global LNG market by 2020.
At the end of the day speakers were in general agreement that demand would certainly increase as would prices for gas and that new players would appear on the scene.
Source: Platts
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