Study Group 1: Market Evolution – LNG Commoditization

Traditionally, LNG has been traded as long term (20 years) contracts with an oil price index. However, 10~15 years’ contracts and spot transactions have been increasing recently. In these circumstances, LNG project development strategies should be changed in the way of financing, economic models and so on. Conventional FID of an LNG project is based on long term LNG contracts and economic models through steady cash flow from these long term contracts. However new market trends may force FID momentum to change, so in Study Group 1, the topics below are to be covered.

• LNG market evolution – growing LNG spot market and commoditization
• Potential LNG hubs – growing necessity for the establishment of LNG hubs and its relationship and potential integration with existing regional LNG/NG trading hubs (e.g. JKM, NBP, TTF, etc.)
• LNG Project’s responses and strategies toward the changing market in terms of LNG sales arrangement and financing to increase project viability

Study Group 2: Carbon Neutrality Trends Impact on LNG Business, LNG Demand, and Opportunities for LNG

LNG’s role in energies is at a turning point because carbon neutrality undermines the position of fossil fuels. Furthermore, the production efficiency of renewable energies has been increasing remarkably.

Study Group 2 is going to review the LNG business in a new energy transition period to a carbon neutrality era. How much does carbon neutrality impact LNG business, technically and commercially? The facility composition or system design specification of LNG plants (liquefaction plants and receiving terminals) will be changed in accordance with this carbon neutrality trend.  The LNG market is also affected by this trend. SG2 is going to study LNG plant changes and the impact on the LNG market due to the carbon neutrality trend.

Main topics and Areas of Focus in this group will be:

• Energy Plociy review in key LNG consumption regions (EU, Northeast Asia, India and Sub-continent, Southeast Asia)
• Carbon neutrality pathways and impact on energy mixes and LNG demand
• LNG as a transition fuel to achieve carbon emission targets, focus on consumption sectors
• LNG producers/consumers decarbonization efforst throughout the LNG value chain
• Study cases of successful project implementations of LNG as a transition fuel
• Challenges and hurdles for LNG as a transition fuel

Study Group 3: Create LNG demand with the development of a new utilization sector in Developing/Under-Developed Countries

As mentioned in SG2, LNG status is changing in the energy sector. Demand increase is slowing down in developed countries, but there are still many opportunities to expand the demand in developing countries and under-developed countries. In order to develop LNG demand, cost efficient supply infrastructure should be studied in developing/ underdeveloped countries. Meanwhile, the LNG consumption sector should be developed, such as natural gas air conditioning in East Asia, industrial use in developing countries and so on. SG3 is covering the topics below.

• Current and future issues – Identify current and potential issues in near future in developing/under-developed countries
• Supply expansion strategy – How to build up cost efficient supply infrastructures (e.g. small LNG, LNG trucking, etc.)
• Demand expansion strategy – Industrial use in developing countries, CCGT Power Plant based integrated business model, natural gas air conditioning in East-Asian countries, etc.
• New technology – Identify potential new technology, application to enhance LNG supply/logistics/utilization

Sub-Task Force: The IGU World LNG Report

The committee produces the annual IGU World LNG Report. This report provides a comprehensive overview of the LNG market, including imports, exports and pricing, liquefaction plants, and LNG receiving terminals.