I want to start todays post with a Happy New Year to all readers! I hope the celebration stood in good relation to the great year for LNG in 2011. In a few weeks here in China, we will move from the year of the rabbit to the year of the dragon – sounds like a pretty good change if you ask me.
First and foremost, 2011 was the year when the LNG industry got to demonstrate that it has grown into a large industry with flexibility to adapt as the market changes. When the nuclear power plants in Japan shut down following the devastating earth quake, most of the energy shortage was covered by increased LNG imports. Throughout the year, natural gas prices outside of US continued to increase, creating more confidence in future liquefaction projects in Australia and various parts of Asia and Africa. This growing price disparity between US and the rest of the world also was fuel to the proposals for LNG export projects based on US shale gas supply. I feel confident that LNG trade will continue to grow in 2012. And I feel confident that analysts will continue to debate whether or not LNG is a commodity yet.
Even if the growing volumes of LNG trade has a big impact on global energy markets, it is probably the downstream developments that ensure that “LNG” is suddenly a term known to the masses. The implementation of LNG in the transportation and industrial generator sectors has opened the door for this industry to a whole new set of people. And this development has brought about the need for blog posts like “What is LNG?”. Judging the amount of interest we see, particularly for the maritime applications of LNG as a fuel, there should be absolutely no doubt that this topic will become even hotter in 2012.
I will not make projections for 2012, other than to say that I believe China will continue to have a big impact. The year of the dragon symbolizes some characteristics like ambition and power, but also self-sufficiency. So you can use it to argue either strong continued growth in LNG imports or quick developments of domestic shale gas. In a later blog post we may investigate whether Chinese horoscopes or energy analysts have the better track record.
May 2012 bring more strong developments for LNG! But also some suprises, please!