Investment in new LNG infrastructure is set to surge this decade Besides the U.S., Qatar, Mozambique and Russia are building out their export capacity
The new LNG projects are driven mainly by a short-term increase in natural gas demand in Europe and Asia due to Russia’s war in Ukraine and ensuing sanctions and restrictions placed on Russian gas exports. Spending on greenfield LNG projects this year and next will stay relatively flat, with $28 billion approved in 2021 and $27 billion in 2022. Investments sanctioned in 2023 will show a modest increase, nearing $32 billion, before peaking at $42 billion in 2024.
Helped by this new infrastructure, total LNG supply is expected to almost double in the coming years, growing from around 380 million tonnes per annum in 2021 to about 636 Mtpa in 2030, with several major LNG projects already underway or in the pipeline. LNG production is predicted to peak at 705 Mtpa in 2034.“Recent price surges in natural gas markets worldwide have somewhat constrained gas demand, triggering a resurgence of coal-fired power generation in many countries.
Russian volumes are primarily dependent on the successful completion of the Novatek-operated Arctic LNG 2 project, which is potentially in jeopardy as sanctions against Russia over the Ukraine conflict have led to delays in the commissioning of Train 2 and Train 3. Project partners TotalEnergies and JOGMEC have halted all financing related to the scheme in the Russia-Ukraine war, followed by the withdrawal of chemicals giant Linde as a contractor.