In “The World LNG & GTL Report”, John Westwood of international energy analysts Douglas-Westwood said annual expenditure on LNG facilities was forecast to increase dramatically from $7.2 billion in 2004 to $17.5 billion in 2009.

About $31 billion would be spent on constructing 27 new liquefaction trains while nearly $14.5 billion was expected to be spent on 37 new import terminals (including eight offshore facilties) and six expansion projects, according to report author Steve Robertson.

“By 2009 the LNG carrier fleet is expected to number over 300 vessels and the total cost of the newbuild vessels over the next five years is expected to exceed $21 billion," Robertson said.

"Despite the unprecedented levels of demand, intense competition between Asian LNG shipbuilders (particularly those in Korea and Japan) is expected to keep prices for LNG carriers steady.

“A significant push to achieve economies of scale is evident throughout the supply chain. New liquefaction process technology will see train sizes of nearly 8 mmtpa being achieved over the forecast period, whilst the current orderbook shows that the largest LNG carriers will take a leap in size from 145,000 cubic metres to 216,000 cubic metres capacity.

“Additional orders for vessels up to 260,000 cubic metres are also expected to be placed to service new projects in Qatar."

Declining domestic gas production has created a need to construct additional import capacity in North America and many parts of Western Europe, the authors said.

But attempts to site new terminals onshore were being made increasingly difficult by local opposition to such plans, despite the LNG industry's excellent safety record.

“As a result we are seeing a diverse range of proposals for offshore terminals and we expect eight such terminals to come to fruition over the period to 2009,” the report said.

The report is based on analysis of data contained in “The LNG & GTL Projects Database”, part of the OGPOD service managed by Douglas-Westwood and OTM Consulting. Annie Hairsine of OTM, manager of the data service, remarked that, “the identified prospects on our database reveal an enormous potential for growth in the LNG sector.”

“For instance, the capacity of all the prospective LNG liquefaction trains for the 2005-2009 period amounts to some 191 (mmtpa) of additional output. Whilst it is inevitable that not all of the prospects will go ahead on time, and some will not go ahead at all, the outlook seems very positive.”

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