By Ben Eguzozie.
Global liquefaction capacity of Liquefed Natural Gas (LNG) grew by 4.3 percent to a total of 478.4 million tonnes per annum (MTPA) as of end-2022, according to the newly released 14th edition of the annual World LNG Report released by the International Gas Union (IGU).
Of this figure, 75 percent of the increase in 2022 came from the United States of America, giving it the largest operational liquefaction capacity worldwide of 88.1 MTPA.
However, the volume of approved liquefaction capacity declined to 25.2 MTPA compared to the 50 MTPA approved in 2021, the World LNG report added.
Europe, despite being forced to move away from Russian supplies over the Russian aggression in Ukraine, saw new regasification capacity approved, and some brought online in record time. Also, very high prices at the European market helped make the massive redirection of LNG flows from Asia to Europe possible, and balance the short-term market; while also causing demand destruction in some Asian markets.
The traditionally higher Asian spot market price benchmarks traded at a discount to the European market for the first time for 85 percent of the February 2022 to January 2023 period.
The World LNG report said Asian LNG demand reduced significantly in most locations, with the region’s two fastest growing LNG markets in recent years, China and India, reducing imports by 19.3 percent and 17.7 percent respectively.
However, the World LNG Report, the world’s most comprehensive public source of information on key developments and trends in Liquefied Natural Gas (LNG), warns of a global risk of prices (of LNG) returning to 2022 conditions.
“While prices moderated closer to historically average levels at the start of 2023, they remain elevated with an ongoing risk of a return to 2022 conditions,” the report said.
But a new analysis by Rystad Energy, a global energy research firm, said Africa, with a 2022 LNG liquefaction capacity of 77 MTPA, is projected to increase its liquefaction capacity to 146 MTPA in 2030, and 234 MTPA in 2040, if energy companies can address country-specific financing and security issues, and bring projects online in a timely manner.
Rystad Energy in its analysis said, while Mozambique, Nigeria and Mauritania have the potential to massively boost their various liquefaction capacities, Algeria, Egypt and other African producers will record incremental capacity increases during the forecast period (2030 to 2040).
In addition, in terms of investments, Rystad Energy said Africa will receive up to $90 billion in LNG-related investments between 2021 and 2030, and up to $118 billion between 2031 and 2040.
The global energy research company then advises Africa’s LNG producing countries and companies to take advantage of supply and pricing opportunities caused by Europe’s shift away from Russian supplies over the Russian-Ukraine war which has paved the way for Africa to increase exports to Europe from 45 percent in 2021 to 55 percent as of 2022, with a number of gas production and supply deals being signed between Europe and various African producing countries.
