Posted on 02/28/2007 8:41:00 AM PST by thackney
LONDON (AFX) - The global market for liquefied natural gas is expected to grow rapidly until the end of the decade, doubling in size over five years to 2010, according to a report published today by PriceWaterhouseCoopers.
That will mean LNG will be contributing around 40 pct of the anticipated growth in global gas supply between 2005 and 2010, it said.
Qatar, Nigeria and Australia will lead the growth, said Michael Hurley, head of the Global LNG team at PwC.
'The rise of Qatar is a key factor in a more global market, with supplies able to serve both the Atlantic and Pacific markets. In addition, new LNG capacity is planned to be developed in Iran, the Russian Federation and Yemen,' he added.
But the report also highlighted the risks facing companies involved in the LNG business such as BG Group PLC (nyse: BRG - news - people ), stressing that previous LNG activity has been the subject of 'enormous ups and downs', with some infrastructure built in the 1970s remaining unused until the 1990s.
'LNG remains a price-taker not a price-setter on most of the gas markets and its value depends on the balance between the main oil and gas price, the price of other fuel sources such as coal or nuclear, and the cost of carbon,' it said.
The report added technology will be key in determining the future shape of the market and a series of developments may transform the role of LNG still further, which will aid growth.
'Alongside the difficulties of managing large infrastructure investment in sometimes uncertain geo-political contexts, there is the added complexity and choice that comes from changing market conditions. Current market conditions are rather tight, however longer term, we are still facing a future where LNG can be accessed by utility companies in more locations, in greater volumes and in more flexible delivery modes,' stressed Hurley.
(The way I figure it, if they're right, the other guys will come to the same conclusion and confirm it for me.)
TS
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