Global Gas Perspectives: LNG plant cost reduction between 2014 – 18

In his recent papers for OIES on the future of gas in Europe and the global energy economy, Jonathan Stern identified affordability as a key factor in determining whether gas would play a major role in Non-OECD countries. As the majority of traded gas will be LNG, the key question is therefore whether the cost of developing new liquefaction projects can be low enough to allow the gas to be competitive when it reaches the end consumer.

This paper by Brian Songhurst aims to address this issue. His 2014 paper on the same topic identified the key causes behind the dramatic increase in costs seen in the period 2010-2014, and he now updates his analysis to look at the changes that have occurred in the period 2014-2018. The conclusions that he provides are vital to an understanding of whether project developers will be confident enough to proceed with new schemes that, according to Stern, must be able to deliver gas to market at a price less than $8/mmbtu. While Songhurst suggests that there are certainly reasons for optimism, it is clearly a topic that merits continued research as the LNG industry moves into a critical phase of new FIDs for the 2020s.

DOWNLOAD the full paper LNG Plant Cost Reduction 2014 – 18 by Brian Songhurst, Research Associate, OIES

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