In this article, we aim to explain how this industry works, providing all the details of the three involved components: demand, supply, and transportation. We analyze the demand from the 53 countries that have regasification plants, providing details of all the regasification plants that have been built and those planned, including portable FRSUs, storage capacity of major countries, and discussing the key companies in this part of the chain. We do the same for the export side, where, in addition to countries, we also show all operating and planned FLNG projects. Similarly, we have all operating LNGCs in the spreadsheet and data on those under construction until 2028. Finally, we discuss the current situation, what is expected in the short and medium term, and our point of view regarding portfolio management.
To achieve this, we have built a comprehensive database that includes the names, owners, and characteristics of all 734 LNG vessels (including the 49 FRSUs), all existing and planned liquefaction plants worldwide, regasification facilities, FLNG projects, and data on all countries involved in the industry. We’ve compiled all this information into an Excel file, which is available – via our website – to all our premium subscribers.
Demand / Imports
The demand for LNG has experienced significant growth in the last 20 years, going from barely 10 billion cubic feet per day (Bcf/d) in 2000 to 50 Bcf/d today. During this period, the primary driver of this growth has been Asia, driven by the expansion of China and other emerging markets. As of today, Asia accounts for 65% of LNG demand, although it has lost some market share in the past year due to China’s slow reopening and increased LNG imports in Europe as a result of the conflict in Ukraine. The main contributors to this demand are Japan, South Korea, and China. However, India (which is experiencing tremendous growth in the number of LNG terminals) and Taiwan are also notable consumers, each representing approximately 5% of global consumption.
In Europe, due to the conflict in Ukraine and sanctions against Russia, the region now accounts for slightly over 30% of global demand. France, Spain, and the United Kingdom stand out, collectively representing 16% of global demand among the three of them.
Note: Different units
However, a significant difference among countries lies in their storage capacity, which is an important point to understand and consider. Japan, the largest LNG importer, does not have underground storage, and its capacity is limited to what is associated with its import facilities, specifically 12 billion cubic meters (bcm), enough to cover only about 36 days of average winter demand. This makes Japan an active player in the purchase of new cargoes (we discuss this further in the LNG Shipping section). South Korea faces a similar situation with storage capacity at 6.56 bcm. China’s storage capacity is somewhat higher (and growing) at 19.8 bcm, but it still only covers 10% of its demand. It’s also worth noting that India, despite its rapid growth in the LNG industry, has not yet developed strategic reserves.
In Europe, the situation varies significantly between the UK, which has storage capacity for approximately 3% of its demand (2.3 bcm), and the European Union, which, with 103 bcm, covers one-third of its winter demand.
In general, the impact of a colder-than-normal winter (due to limited storage) and the ongoing need for LNG supply can be observed.
Regarding regasification capacity (which is necessary to introduce the received LNG into the local network), Asia has capacity for 611 MTPA, Europe for 221.9 MTPA, the Americas for 216 MTPA, and the Middle East for 51 MTPA.
Out of this regasification capacity, 177.3 MTPA is provided by floating storage and regasification units (FSRUs). There are 49 FSRU vessels operated by 22 different companies, with Höegh ($HLNG.OL – acquired by Morgan Stanley), Excelerate Energy ($EE), and Energos Infrastructure (a joint venture between Apollo and New Fortress Energy $NFE) being the three most significant players in this space.