GIIGNL: 2022 LNG imports rose 4.5 percent to 389.2 million tons

Global LNG imports reached 389.2 million tons in 2022, increasing by 4.5 percent compared with the previous year, according to the newest annual report by the international group of LNG importers, GIIGNL.

GIIGNL’s previous report showed that global LNG imports rose 4.5 percent in 2021 to 372.3 million tons.

According to the group, in 2022, European buyers had to turn to the LNG market to replace pipeline supplies from Russia, which shifted global LNG trade flows, while Asian countries turned to alternative energy sources at the expense of LNG.

The annual growth rate reached 4.5 percent, with Europe absorbing most of the supply increase.

Record high prices led to changes in import strategies and triggered LNG demand destruction in price sensitive countries, such as India, Pakistan, and Bangladesh.

The most significant decrease was seen in China due to Covid-related lockdowns, increased domestic production and pipeline imports, which resulted in a remarkable drop in spot LNG purchases.

El Salvador joined the ranks of LNG importers. In total, 45 markets imported LNG volumes from 20 exporting countries, the group said.

US LNG growth

In 2022, the United States continued to lead LNG supply increases, adding 8.4 MT of LNG to the market, from a total of 16.9 MT globally.

LNG supplies from the United States grew by 12.6 percent thanks to the ramp up of Train 6 of the Sabine Pass liquefaction project and the commissioning of Calcasieu Pass.

However, maintenance at some liquefaction sites and the outage at the Freeport facility led to a lower than-expected supply increase from the United States, GIIGNL said.

Start-up of the Portovaya LNG project in Russia (+0.3 MT out of a total increase of +2.5 MT in total for the country) contributed to new LNG supply.

Increased production in Qatar (+2.1 MT), Malaysia (+2.7 MT) and the restart of Hammerfest LNG in Norway (+2.5 MT) provided additional LNG volumes to a tightening market.

Moreover, Indonesia, Papua New Guinea, Peru, Trinidad & Tobago, Egypt, Equatorial Guinea, and Oman also contributed to incremental LNG supplies in smaller quantities.

In addition, Coral South FLNG in Mozambique came onstream towards the end of the year.

Nigeria and Algeria recorded greatest declines in LNG exports

The greatest declines in LNG exports were recorded by Nigeria (-2.2 MT) due to security issues and extensive flooding, which led to the declaration of force majeure and cancellation of some LNG cargoes, the group said.

Algeria recorded a 15 percent decline (-1.7 MT) due to stronger domestic gas demand and pipeline gas exports, followed by Brunei (-0.8 MT) which experienced a decline in feedstock.

The three basins, the Atlantic, Pacific and the Middle East, all experienced growth in 2022, adding 10.5 MT, 4 MT and 2.5 MT respectively.

Also, the Pacific Basin remained the largest source of LNG supplies to the global market with 148 MT or 38 percent market share, closely followed by the Atlantic Basin with 146 MT or 37 percent share, and the Middle East with 96 MT or 25 percent market share.

As production and exports from the US continue to increase, the supply gap between the Pacific and the Atlantic Basins has substantially narrowed over the last two years from 29 MT in 2020, to 8.6 MT in 2021 and only 2 MT in 2022, GIIGNL said.

Qatar and Australia remain the leading exporting countries with 79 MT and 78.5 MT respectively.

The United States came third, supplying 75.4 MT of LNG. It is likely to become the largest LNG exporter in 2023, it said.

Russia came fourth with 32 MT, followed by Malaysia with 27.6 MT. In a similar trend to 2021, Qatar, Australia and the United States together accounted for almost 60 percent of global LNG supply.

Demand destruction in Asia

For the first time since 2015, Asia recorded a decrease in LNG imports with demand falling by 7.6 percent (-20.6 MT) compared to the previous year, GIIGNL said.

LNG imports decreased in major LNG importing countries, in China and Japan.

Price sensitive countries such as India, Bangladesh and Pakistan also experienced strong declines in LNG import volumes.

Slower economic growth and switching to coal for power generation due to high LNG prices were the main reasons for demand destruction in the region, it said.

China experienced the greatest decline in LNG imports, which dropped from 79.3 MT in 2021 to 63.3 MT in 2022, a 20 percent reduction.

Demand for LNG fell as a result of high regional spot prices, which triggered more pipeline imports and domestic gas production.

A Covid outbreak at the beginning of the year and ensuing restrictions also contributed to demand reduction, it said.

Spot LNG down

In 2022, spot and short-term transactions reached 135 MT (-1.5 MT or -1.1 percent) compared with the previous year), GIIGNL said.

This volume represented 35 percent of total trade, compared with 36.6 percent in 2021.
Faced with a severe energy crisis, Europe relied on spot and short-term LNG imports to help replace Russian pipeline gas, the group said.

Spot and short-term LNG trade was muted in Asia in 2022, largely due to high spot prices. As such, flexible volumes were freed to meet European LNG and gas demand.

The United States remains the leading exporter of spot and short-term LNG with a 34 percent share in global spot and short-term volumes.

Australia kept its second position for the third consecutive year with a 15 percent market share in 2022, the group said.

Following the restart of exports from Hammerfest LNG, Norway increased spot and short-term sales from 0.2 MT to 2 MT compared to the previous year.

“True” spot volumes (i.e, volumes delivered within three months from the transaction date) reached 28 percent of total imports in 2022 or 108 MT, a decrease of 6 percent compared to 2021 (116 MT), GIIGNL said.

In 2022, re-exports of LNG increased to 4.1 MT compared with 3.5 MT in 2021.

In 2022, 15 countries re-exported LNG and 26 countries received reexported volumes. Spain remains the leader in terms of volumes reloaded (1.4 MT in 2022 vs 1 MT in 2021), followed by Indonesia (0.7 MT), and China (0.5 MT).

The reloaded volumes from Spain were mostly destined for the European region.
Asia, driven by China and Japan, remains the main destination for reloaded volumes globally, it said.

734 vessels

The total LNG tanker fleet consisted of 734 vessels at the end of 2022, GIIGNL said.

It included 49 FSRUs and 70 vessels (43 LNGBVs + 27 small-scale LNG carriers) of equal or less than 30,000 cubic meters.

Total cargo capacity at the end of 2022 stood at 108.7 million cubic meters.

Moreover, total operational capacity (vessels known to be in service) amounted to 107.8 million cubic meters, it said.

In 2022, the average spot charter rate for 160,000-cbm LNG carrier stood at around $131,500/day, compared to an average of around $89,200/day in 2021, the group said.

A total of 35 vessels were delivered in 2022, compared with 68 vessels in 2021, it said.

The number of new orders reached a total of 178 units, compared with 111 new orders in 2021, according to GIIGNL.

At the end of 2022, the orderbook consisted of 332 units (53.8 million cubic meters) including 5 FSRUs and 23 LNGBVs.

The orderbook represented 49 percent of the existing LNG carrier fleet.

GIIGNL added that 63 of the units on order were scheduled for delivery in 2023. It included 4 FSRUs and 13 LNGBV.

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