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LNG supply buffer to have ‘positive' impact on global gas security

 

 

NEW ORLEANS
Petroleumworld.com 01 20 2017

Two thousand and sixteen could mark the first year when actual utilization of global liquefied natural gas (LNG) export capacity (utilization of the capacity technically able to run) was not at maximum, the International Energy Agency has said in its annual Global Gas Security Review.

The presence of a supply buffer – through a period of oversupply – will have a positive impact on global gas security, according to the review.

Average utilization of LNG export plants – excluding all unavailable capacity – has remained stable at close to full rates in recent years, according to the IEA. High utilization reflects a key feature of LNG systems, mainly the fact that liquefaction facilities are built to operate base load. The result is a basic lack of additional liquefaction capacity to readily meet short-term upswing in LNG demand.

The arrival of U.S. and Australian LNG on the market just as growth in global gas demand slows is challenging these basic operational principles, it said. New capacity additions are now so large that they are outstripping both ongoing disruptions and incremental demand.

The world had an export capacity of 445 billion cubic metres (bcm) of LNG at the end of October 2016, but close to 65 bcm is off line – equal to combined exports from Malaysia and Indonesia, the IEA noted in the review. The level of unusable LNG export capacity more than doubled between 2011 and 2016, and its share relative to total installed capacity increased as well. This implies much less supply flexibility compared with that suggested by gross capacity figures.

Lack of feedstock gas is the primary reason for the large underutilization of LNG plants, accounting for roughly three-quarters of the unusable export infrastructure. The rest is attributable to a combination of hard security issues and technical problems. Extreme weather accounts for just around 1% of unavailable capacity, it said.

US plastic resins production on the rise

U.S. production of major plastic resins totaled 72.7 billion pounds in the first 11 months of 2016, a 1.8% increase on the same period the previous year, according to data released by the American Chemistry Council.

However, production reached 6.4 billion pounds during November 2016, a decrease of 0.4% compared to the same month in 2015.

Sales and captive (internal) use of major plastic resins totaled 6.5 billion pounds during November 2016, an increase of 5.2% from the same month one year earlier. Year-to-date sales and captive use was 72.7 billion pounds, a 1.5% increase as compared to the same period in 2015.

U.S. chemicals production was 1.1% lower in November 2016 than in the same month in 2015. In the Gulf Coast region, where petrochemicals and plastic resins dominate the chemicals industry, chemicals production was down 1.2% year-on-year in November 2016.

 



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