892mn mt/yr of global LNG capacity awaiting sanction: IGU

There is some 892.4mn metric tons/year of liquefaction capacity awaiting final investment decisions (FIDs), the International Gas Union has estimated in its World LNG Report 2021, published June 3. A further 137.3mn mt/yr is either under construction or has been sanctioned for development, the gas industry association estimates.

However, the IGU notes that a "large portion of the pre-FID projects are likely not to progress. Given the weak economic landscape in 2020, developers have pushed back on capital-intensive pre-FID liquefaction projects and reinstated their strategies." It adds "this puts small-scale LNG in the spotlight as it remains a growing segment within the wider LNG sector with significant potential."

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The US accounts for 39.4%, or 351.6mn mt/yr of the pre-FID capacity, while Canada accounts for 25.5%, or 227.8mn mt/yr. A further 5.6% is in Australia and 4.9% in Russia.

"The large inventory of proposed US projects is primarily driven by the growth in shale gas output in the US over the past few years," the IGU explains. "While most operational US LNG projects are brownfield conversion projects, the currently proposed US LNG projects are mainly greenfield projects that consist of multiple small-to-mid scale LNG trains delivered in a phased manner."

The majority of the capacity in Canada, 179.3mn mt/yr, is on the Pacific west coast of British Columbia, which is closer to Asian markets than rival schemes in the US Gulf Coast, meaning lower shipping costs.

"This is a key driver for the increase in the number of of proposed LNG export projects on the Canadian west coast, although most remain in early development stages," the IGU says. "Due to strict environmental standards, these LNG export projects have adapted various strategies to reduce their carbon emissions to comply with environmental regulations."

The Kitimat LNG and Woodfibre LNG projects will be powered by hydroelectricity, for example, while the third and fourth trains of LNG Canada will use natural gas turbines for the liquefaction process in order to minimise fuel use.

The IGU's World LNG Report 2021 can be downloaded here.