Liquefied natural gas production in 2011 will increase less than half as fast as this year, easing the drag on prices amid a global supply glut.
Liquefaction plants than turn gas into liquid for transport came on line this year in Qatar, Peru and Yemen, adding a total of 26.8m tons of new production to global supply and raising worldwide LNG output by 11 percent to about 375.5bn cubic meters, according to data compiled by Bloomberg. Only six LNG projects with 12.1m tons a year of capacity are currently under construction.
US gas prices at Henry Hub in Louisiana have fallen 68 percent since peaking at $13.58 in July 2008.
Global gas consumption fell 2.1 percent in 2009, according to BP Plc’s Statistical Review of World Energy.
Gas markets this year had an “acute glut”, according to the International Energy Agency. It cited increasing US gas production from unconventional sources, including shale deposits, record growth in LNG output and a drop in demand due by the economic recession.
Qatar Liquefied Gas Co is due to start work early next year on its final plant with capacity of 7.8m tons a year of capacity. Woodside Petroleum Ltd’s Pluto project in Australia is the only other facility scheduled to begin production in 2011.
Qatar, the world’s biggest LNG producer, will have the capacity to export an annual 77m tons of LNG after the Qatargas 4 unit begins production. The Gulf state loaded its first cargo for export in 1996.
The new liquefaction plants are due to begin before 2015, according to the IEA. Algeria may start an LNG plant in 2012 and another in 2013. Chevron Corp’s Gorgon plant in Australia is slated to begin in 2014, along with Exxon Mobil Corp’s Papua New Guinea project.
The number of countries importing LNG may increase by more than a third over the next decade to 30, according to GDF Suez SA. Middle Eastern countries including Kuwait and the United Arab Emirates, as well as Latin American nations such as Brazil and Argentina are turning to the fuel for power generation.
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