Bank of America Merrill Lynch forecasts global imports of liquefied natural gas (LNG) will increase by 18 percent this year as Asia and Europe consume more of the fuel.
The financial services company also forecasts global imports of LNG to rise 9 percent in 2011, newswire Bloomberg said in a report on Thursday.
“Global LNG demand growth should be able to soak up the expected supply additions of 4.2 billion cubic feet a day or 14 percent this year, and 3.2 billion cubic feet a day or 9.6 percent next year,” analysts led by Francisco Blanch in New York said.
“In level terms, the market will remain oversupplied in 2010 as well as in 2011 as utilisation rates at global nameplate liquefaction capacity will be below 90 percent.”
The growing demand should offset new supply as Qatar, the world’s largest producer of the fuel, and Russia start new units to chill the gas and export it by tanker, Merrill said in its report.
Europe in particular has seen a massive influx of LNG imports so far this year, according to the analysts.
“The UK is now set to become the world’s fourth-largest LNG importer, with imports up 120 percent year on year, potentially exceeding 11.6 million tons, or one-sixth of UK gas supply.”
But the UK is only one of the many countries who are eyeing LNG imports in the next few years.
Qatar will supply LNG to Dubai, about 370km to the country’s east, during the summer months starting in 2011, Qatari energy minister Abdullah Bin Hamad Al Attiyah said last year.
Dubai is turning to Qatar for liquefied gas to satisfy rising electricity consumption. The Dubai Electricity and Water Authority said last month that peak power demand in the emirate increased by 9.6 percent during the seven months through July over the same period a year ago.
Qatari LNG producers are seeking new markets for their fuel as the US is forecast to need less imported gas than previously projected after boosting domestic gas output from shale rock.
The US Energy Department said in August that LNG imports will rise 8.9 percent this year to 1.35 billion cubic feet (37.8 million cubic meters) a day. That’s 1.5 percent less than its previous forecast for the country.
The world’s largest LNG producer, plans to raise its annual capacity for output of the fuel 43 percent this year to 77 million tons with the start of three of the largest plants in the world, according to Bloomberg.
Global LNG production will increase by about 4 billion cubic feet a day this year, down from as much as 5.5 billion cubic feet a day estimated at the start of the year, Barclays said earlier this month.
LNG output will rise by about 3 billion cubic feet next year, it added.
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