Liquefied Natural Gas Producers Increasing Capacity and Moving to New Markets
Big names in the energy industry like Total and Royal Dutch Shell are considering options of building terminals and power plants up emerging new markets so that the huge supply in the market is soaked up rapidly.
Several companies have put in billions to construct plants to produce liquefied natural gas (LNG) around the world including the U. S and Australia. However, the LNG produced by the industry leaders is surpassing the demand. To add to the woes of the producers, the lower price of gas is hurting them even more.
The amount of LNG which the companies are preparing to produce is set to surpass the demand from the leading buyers like China and Japan. The focus has shifted to the downstream market where opportunities are more. Ivory Coast to distant Indonesian islands, the companies are venturing into new markets building power plants that are fuelled by gas, drawing pipelines and building storage terminals, planning to raise their outputs.
Laurent Vivier, Total's president for the gas division said, "We are ready to go downstream as much as it takes to unlock gas demand. We need to be present in downstream ourselves, to create demand and unlock bottlenecks along the chain including re-gasification, pipelines and power plants."
Simon Henry, Shell's CFO thinks that the number of LNG buying markets could increase two fold.