Global regas capacity under construction hits 10-year high

Global regasification (regas) capacity under construction is expected to hit a 10-year high at 144mn t/y in 2020, says Wood Mackenzie. This includes 33 new terminals under construction, adding 92.8mn t/y, and a further 51mn t/y of capacity which is set to be added at existing terminals.  

The world’s fastest growing demand centre, China, is leading the regas capacity additions, accounting for over a third or 52.6mn t/y of total regas capacity, including 22.4mn t/y at 10 new terminals.

Wood Mackenzie Research Director Giles Farrer says: ‘Access to capacity in China is being shaken up, with the new national pipeline company, PipeChina, likely to take ownership of a number of national oil company-owned terminals soon. China also suffered from delays in capacity additions due to COVID-19, with expected expansion of the Caofeidian and Rudong terminals facing risks of slipping to 2021.’

Schedules in South Asia have also been impacted by the coronavirus pandemic, with delays to construction of pipeline infrastructure limiting send-out from some of the terminals. India is also building five new terminals with 20mn t/y of total capacity. Elsewhere, Europe may see up to 13mn t/y of additional capacity from expansion projects until 2025, across the Netherlands, Poland, France, Greece and UK. 

Wood Mackenzie expects a total of seven regas terminals to take final investment decision (FID) this year. Three new regas terminals – Cyprus LNG, and China’s Yantai LNG and Tianjin LNG – have already taken FID in 1H2020.

Farrer says: ‘We think a further four terminals have a good chance of reaching FID before the end of the year – Alexandropoulos LNG, in Eastern Greece, Hong Kong LNG, Vila do Conde terminal in Golar, located in North Brazil and Puerto Sandino, in Nicaragua.’ 

A total of four new projects have started receiving cargoes in this year. These include Brazil’s Sergipe LNG, India’s Mundra LNG, Puerto Rico’s San Juan project and most recently Myanmar’s Thanlyin project. 

Wood Mackenzie’s Asia LNG Research Analyst Otavio Veras adds: ‘South-east Asia has been an important region for regas development this year. Vietnam and Myanmar have both completed terminals in record time to help stave off looming power shortages. Hai Linh Company has completed construction of a terminal in Vung Tau, south-east Vietnam and plans to begin commercial operations by 2Q2021. In Myanmar, a small-scale terminal, located in Thanlyin, near the capital Yangon, received its first LNG cargo from Petronas, in May 2020.’

The developers of both the Vietnam and Myanmar regas projects have taken more risk to deliver their projects. Both terminals are privately owned and started construction before any sales and purchase agreements were signed. In Myanmar, novel offloading systems operated by LNG-Easy have also been used to begin imports before terminal construction is complete.  

Perhaps the most interesting development is the proposed regas in southern Mozambique targeted for construction in 1Q2021. Farrer says: ‘Although demand in southern Mozambique is presently modest, the terminal will also target demand in northern South Africa to replace decline at the Pande and Temane fields, which currently supply gas to more than 30 industries in the Maputo/Matola area and also to South Africa, through the 865 km ROMPCO pipeline.’