Global LNG Production May Increase 14% in 2009 on New Projects

By Dinakar Sethuraman

Aug. 18 (Bloomberg) -- Global liquefied natural gas output may rise by about 14 percent next year as ventures in countries including Qatar and Indonesia start production, said a London- based consultant.

Output of LNG, gas chilled to liquid form for transport by tankers, may climb about 25 million metric tons to about 208 million tons next year, Andy Flower, an industry consultant and a former executive at BP Plc's LNG business, said in an interview in Singapore. The increase may suffice to meet annual demand from South Korea, the world's second-biggest LNG buyer.

Global LNG trade rose 7.3 percent to 165.3 million tons last year, according to the BP Statistical Review of World Energy June 2008. Demand for the cleaner-burning fuel will increase 10 percent a year through 2015, more than five times as fast as crude oil, Citigroup Inc. analysts led by James Neale said in an April report.

``Consumption of LNG this year may reach about 183 million tons from 173 million last year,'' Flower said in Singapore on Aug. 15. ``New projects are starting up in Qatar, Indonesia, Yemen, Australia and Russia.'' Flower's output estimates for last year are higher than that of BP Plc. Projects from Australia to Nigeria may have produced about 88 million tons in the first six months of 2008, he said.

LNG is natural gas that has been reduced to one-six- hundredth of its original volume at minus 161 degrees Celsius (minus 259 Fahrenheit), for transportation by ship to destinations not connected by pipeline. On arrival, it is turned back into gas for distribution to power plants, factories and households.

To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net