Qatar is one among six LNG exporting countries that attained utilization rates of over 90 percent liquefaction capacity last year, according to the International Gas Union (IGU), a worldwide non-profit organization for the sector.
As per the 12th edition of ‘IGU World LNG report’, the global liquefaction capacity has reached 452.9 million tonnes per year (mtpy) at the end of 2020. When compared to 2019, last year has witnessed a decline in average global liquefaction capacity utilization from 81.4 percent to 74.6 percent.
A sustained period of lower LNG prices and increased competition among gas supply sources eroded margins and put pressure on gas and LNG producers, the report states.
“The gas industry has held its own. Despite having to overcome many challenges in supply chain management, maintenance and commercial matters, secure and reliable supply of gas continued uninterrupted. This demonstrates the incredible resilience, flexibility and reliability of the gas sector in bringing secure, clean and modern energy whenever and wherever it is needed, even with significant parts of the world affected by lockdowns or restrictions.”
The US faced a decline in liquefaction capacity utilization, mainly due to its flexible commercial arrangements that give off-takers the right, but not the obligation, to lift cargoes. Utilization in the US dropped from 96.9 percent in 2019 to 76.5 percent last year.
In fact, feed gas deliveries to the six major US LNG export terminals plunged to their lowest level. The largest plunge in exports was seen at Sabine Pass LNG and Corpus Christi LNG, primarily due to weak margins and the flexibility provided in the commercial structure of contracts.
Utilization rates in the US recovered quickly in the last months of 2020. Several factors like increased LNG demand due to a cold winter in key Asian and European markets as well as unplanned outages in prime LNG export markets, caused LNG prices to soar.
Further, IGU noted that Qatar Petroleum (QP) has taken the final investment decision for the North Field East (NFE), the world’s largest LNG project, which will raise the country’s LNG production capacity from 77 mtpy to 110 mtpy.
With the NFE project progressing, this will reposition Qatar as the world leader in terms of liquefaction capacity, overtaking Australia who currently has the most liquefaction capacity.