LNG Importers

• In 2002, 12 countries imported 5.4 Tcf (113 million tons) of LNG. ^6,7 As of late 2003, LNG-importing countries have a combined annual regasification capacity⁸ of 15.1 Tcf (310 million tons).
• Three countries in the Pacific Basin – Japan, South Korea, and Taiwan – accounted for 68 percent of global LNG imports in 2002. Seven European countries received 28 percent of global imports, while the United States imported the remaining 4 percent.
• Japan has long been the world’s largest LNG consumer, importing 2.6 Tcf (54.6 million tons) of LNG in 2002. However, the Japanese share of the global LNG trade fell from 66 percent in 1990 to 48 percent in 2002.
• In 2003, two additional countries – the Dominican Republic and Portugal – began operating regasification terminals.⁹
• Most countries with existing import terminals are expanding their import capacity either through construction of new terminals and/or through expansion of existing facilities.
• The United Kingdom, India, and China are currently building their first regasification facilities.
• Other potential LNG importers in the future could include the Bahamas, Indonesia, Jamaica, Mexico, the Netherlands, New Zealand, and the Philippines (countries in which interest in potential sites has been announced).

Pacific Basin Importers

Three Pacific Basin importers received 3.6 Tcf (76 million tons) in 2002, 68 percent of total world LNG trade. These countries — Japan, South Korea, and Taiwan — generally depend on LNG for 90 percent or more of their natural gas needs.

Japan

• Japan is the world’s largest LNG importer, accounting for 48 percent of world imports in 2002. The country’s 23 receiving terminals have a combined sendout capacity of 9.2 Tcf (188.3 million tons) per year. The terminals are owned mainly by electric and gas utilities. Natural gas supplies 12 percent of Japan’s energy needs, and more than 95 percent of that natural gas is imported as LNG. Approxi­mately two-thirds of Japan’s natural gas consumption is for power generation.

• Although few new facilities have been built in recent years, regasification capacity continues to grow through expansion of existing terminals. Japan’s largest suppli­ers are Indonesia and Malaysia, with substantial volumes from Qatar, the UAE, Australia, Oman, and Brunei Darussalam. The United States also supplies LNG to Japan from the Kenai terminal in Alaska.
• The ongoing liberalization of energy markets in Japan is encouraging significant market changes, and Japanese utilities are spearheading the drive for increased contract flexibility, including lower take-or-pay requirements and a mixture of short-, medium-, and long-term contracts. As existing contracts expire, this trend could become even more pronounced.

South Korea

• As the world’s second largest LNG importer in 2002, South Korea imports most of its LNG from Indonesia, Qatar, and Oman with smaller volumes from Malaysia, Brunei, the UAE, and Australia. South Korea has three regasification terminals owned and operated by state-owned Korea Gas Corporation (KOGAS) at Pyeongtaek, Incheon, and Tongyeong, with a combined sendout capacity of 2.0 Tcf (40.7 million tons) per year. KOGAS is adding storage capacity at Incheon and Pyeongtaek. A fourth terminal is under construction at Kwangyang by Pohang Iron and Steel Corporation, the country’s first independent LNG project.
• South Korea has strong seasonal swings in demand and is a major buyer of volumes on a short-term basis. Korean energy markets are being liberalized, and KOGAS may lose its monopoly position. Thus, like Japanese companies, KOGAS has been seeking greater flexibility in contract terms.
• Taiwan currently has one LNG regasification terminal at Yung An, with a sendout capacity of about 363 Bcf (7.5 million tons) per year. It receives cargos from Indonesia and Malaysia. A second terminal has been mentioned for the northern part of the island.
• China is building its first LNG receiving terminal in Guangdong on the southeast coast. The facility is scheduled for completion in 2006/2007 with an annual capacity of 158 Bcf (3.3 million tons). Partners in the terminal and an associated pipeline are the China National Offshore Oil Corporation (CNOOC), BP, and various local and Hong Kong companies. Initial shipments will come from Australia’s North West shelf expansion. A second terminal will be built at Fujian, which will receive LNG from the BP-led Tangguh project in Indonesia starting in 2007.
• India’s first terminal, at Dabhol, was nearly completed in 2001, but construction stopped when Enron withdrew from the project. Minority shareholders General Electric Co. and Bechtel Corp. are seeking to reactivate the project. The terminal will have an annual capacity of 122 Bcf (2.5 million tons). Construction of a terminal at Dahej on the west coast is nearing completion. Owner Petronet LNG, a consortium of several state-owned companies, will import LNG from Qatar. Shell is building a 122-Bcf-per-year (2.5-million-tpy) terminal at Hazira on the west coast, which is scheduled to go online in 2004. The LNG will initially be delivered under short-term arrangements from Shell projects in Oman, Malaysia, and elsewhere.

Atlantic Basin Importers

Atlantic Basin importers, including the United States, received 1.7 Tcf (37 million tons) in 2002, 32 percent of total world LNG trade. Regasification capacity continues to grow as most Atlantic Basin importers are planning expansions.

• France is Europe’s largest LNG importer, with imports of 511 Bcf (10.7 million tons) in 2002. State-owned Gaz de France operates two terminals at Fos-sur-Mer near Marseilles and Montoir-de-Bretagne, near Nantes. ExxonMobil has announced plans to build an additional terminal at Fos-sur-Mer with a startup date in 2006. The terminal would receive LNG from Qatar. Gaz de France has proposed an additional terminal at Fos Cavaou to receive gas from Egypt’s Idku project.
• Spain has one of the world’s most rapidly growing natural gas markets. LNG imports increased by 30 percent in 2002, with nearly half of the volume imported from Algeria. The balance was supplied by Qatar, Oman, the UAE, Libya, Nigeria, Trinidad and Tobago, Australia, and Brunei Darussalam. State-owned Enagás operates regasifi­cation terminals at Barcelona, Cartagena, and Huelva, all of which are being expanded. Bilbao, operated by a consortium of BP, Iberdrola, Repsol YPF, and EVE, received its first LNG shipment from the UAE in August 2003. When fully operational, the terminal will have an annual capacity of 131 Bcf (2.7 million tons) and would receive most of its LNG from Trinidad and Tobago. Two more plants are under construc­tion at El Ferrol and Sagunto with estimated startup dates in 2006 and 2007.
• The United States imported 229 Bcf (4.8 million tons) of LNG in 2002 with more than half that volume originating in Trinidad and Tobago. The U.S. has four LNG import terminals with a combined total regasification capacity of more than 1,200 Bcf (25.2 million tons) per year. The continental United States is discussed in more detail on page 25.
• In Italy, the state-owned gas company SNAM operates a 130-Bcf-per-year (2.6-million-tpy) facility in Panigaglia that receives LNG from Nigeria and Algeria. Several other projects are being explored, including a gravity-based offshore regasification terminal in the northern Adriatic.
• Turkey receives natural gas as LNG from Algeria and Nigeria at a 224-Bcf-per-year (4.6-million-tpy) LNG terminal at Marmara Ereglisi, adjacent to a combined-cycle gas turbine power station built and owned by state-owned BOTAS. As of October 2003, a second terminal built by an independent entrepreneur had not yet begun operation. Turkey has abundant pipeline supplies of gas and is not known to have plans to expand its LNG import capacity.
• Belgium’s sole regasification terminal at Zeebrugge received 124 Bcf (2.7 million tons) of LNG, mostly from Algeria, in 2002. Operator Fluxys is considering increas­ing capacity at the terminal as early as 2007.
• Puerto Rico, a territory of the United States, has one receiving terminal in Guayanilla Bay, which opened in 2000. Gas from the terminal is used to fuel combined-cycle electricity generation that provides 20 percent of the island’s electricity. Puerto Rico received 24 Bcf (0.5 million tons) of LNG in 2002, mainly from Trinidad and Tobago, with small volumes from Qatar.
• Greece began importing LNG in 2000, under a 21-year contractual agreement with Algeria. Greece’s sole LNG terminal at Revithoussa, near Athens, has an annual capacity of 93 Bcf (2.0 million tons).
• Portugal began receiving LNG in 2002 under a 20-year contract with Nigeria LNG. The LNG was received through Spanish terminals until October 2003, when the Sines terminal went online. The plant has a capacity of 146 Bcf (3.3 million tons) per year.

• The Dominican Republic opened its first regasification terminal at Andres in 2003 to receive LNG from Trinidad and Tobago. The 97-Bcf-per-year (2.0-million-tpy) facility supplies natural gas for electricity generation.
• In 1964, the United Kingdom was the first country to import LNG but dismantled its terminal on Canvey Island in 1990 following the arrival of North Sea oil and gas. Now, faced with a prospective gas shortage, the United Kingdom is again looking at LNG imports. National Grid Transco (NGT), operator of the U.K. gas grid, has awarded contracts for the design and construction of a terminal on the Isle of Grain east of London that will start up in early 2005 with a capacity of 161 Bcf (3.3 million tons) per year. Three additional projects, to be located at Milford Haven, have been proposed.

Potential New LNG Importers

At least seven additional countries are considering becoming LNG importers.¹⁰

Pacific Basin

• A 68-Bcf-per-year (1.4-million-tpy) LNG terminal has been discussed for the Philippines.
• New Zealand is considering importing LNG from Australia.
• Indonesia is considering building an LNG-import facility on the island of West Java.

Atlantic Basin

• In Mexico, nearly a dozen LNG terminals have been proposed, all but two targeting the Pacific Coast. The Mexican regulatory agency, CRE, has granted permits to four projects, three of them on the Pacific Coast, which would also supply U.S. markets. The fourth terminal, on the Gulf of Mexico, would be built by a team headed by Shell and would be used to supply electricity to Mexico.
• Jamaica is exploring the feasibility of importing natural gas from Trinidad and Tobago, either in small LNG carriers or via pipeline.
• Several import facilities are under consideration for the Bahamas and are discussed in the U.S. section below, as the gas would be re-exported to the United States via pipeline into Florida.
• The Netherlands is also considering building an LNG import terminal at Eemshaven.