prices will fall as world production will rise by 30% by end-2009.
The Houston-based firm, which tracks and analyses LNG markets, said 2.8 trillion cubic feet of new LNG production capacity will come onstream in the first half of 2009, if all projects remain on schedule.
“While 2009 will start slow, we expect a 30% rise in total LNG production worldwide by year end,” said Steve Johnson, president of Waterborne Energy.
“We don’t believe Asia and Europe will be able to absorb this new production, despite 11 new regasification terminals under construction. And the economic downturn will limit power demand in Europe, Asia and the US.”
He added that by May 2009, excess global LNG will begin to move toward US import facilities simply because it has no place to go.
“Lake Charles and Cove Point will be first to receive LNG cargoes by summer. Monthly US imports will average about 40 bcf by July and could reach 64 bcf by year end.
“The LNG tanker market will face some challenges in 2009. Forty-five new tankers are scheduled to be delivered from the yard next year, adding length to an already long market, although some of the new capacity will be dedicated to new projects.
“We see fewer long-haul voyages and an increase in shorter voyages; spot tanker rates should maintain an average of about $45,000 per day.”
Mr Johnson said US import volumes in 2010 will exceed the 2007 record import year of 2.1 bcf per day levels.
US import volumes hit a five-year low in 2008, averaging only about 0.95 bcf per day, due to delays in global liquefaction projects and production plant outages, combined with sharp increases in Asian and European demand.
LNG shipments to Asia rose to 5.7 tcf in 2008 from 5.3 tcf in 2007, while European imports were up to 2.1 tcf from 1.9 tcf over the same period.