SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
TABLE OF CONTENTS
1 INTRODUCTION........................................................................................................ 14
1.1 OBJECTIVES OF THE STUDY ...........................................................................................................14
1.2 MARKET DEFINITION.....................................................................................................................14
1.3 SCOPE OF THE STUDY ...................................................................................................................15
1.3.1 MARKETS COVERED .......................................................................................................15
1.3.2 YEARS CONSIDERED FOR THE STUDY..............................................................................16
1.4 CURRENCY...................................................................................................................................16
1.5 PACKAGE .....................................................................................................................................16
1.6 LIMITATIONS ................................................................................................................................16
1.7 STAKEHOLDERS ...........................................................................................................................17
2 RESEARCH METHODOLOGY...................................................................................... 18
2.1 RESEARCH DATA ..........................................................................................................................18
2.1.1 SECONDARY DATA..........................................................................................................19
2.1.1.1 Key data from secondary sources.......................................................................19
2.1.2 PRIMARY DATA...............................................................................................................20
2.1.2.1 Key data from primary sources ...........................................................................20
2.1.2.2 Key industry insights..........................................................................................21
2.1.2.3 Breakdown of primary interviews........................................................................21
2.2 MARKET SIZE ESTIMATION............................................................................................................22
2.2.1 BOTTOM-UP APPROACH .................................................................................................22
2.2.2 TOP-DOWN APPROACH...................................................................................................23
2.3 DATA TRIANGULATION ..................................................................................................................24
2.4 RESEARCH ASSUMPTIONS ...........................................................................................................25
3 EXECUTIVE SUMMARY.............................................................................................. 26
4 PREMIUM INSIGHTS ................................................................................................ 30
4.1 ATTRACTIVE OPPORTUNITIES IN THE SMALL-SCALE LNG MARKET ..................................................30
4.2 SMALL-SCALE LNG MARKET GROWTH, BY REGION (2016–2021) ..................................................31
4.3 SMALL-SCALE LNG MARKET: MAJOR COUNTRIES VS END USERS ..................................................31
4.4 SMALL-SCALE LNG MARKET ATTRACTIVENESS ..............................................................................32
4.5 SMALL-SCALE LNG MARKET, BY END USER...................................................................................33
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
5 MARKET OVERVIEW.................................................................................................. 34
5.1 INTRODUCTION ............................................................................................................................35
5.2 MARKET SEGMENTATION..............................................................................................................35
5.2.1 MARKET SEGMENTATION, BY TYPE..................................................................................35
5.2.2 MARKET SEGMENTATION, BY END USER .........................................................................35
5.2.3 BY REGION.....................................................................................................................36
5.3 MARKET DYNAMICS......................................................................................................................36
5.3.1 DRIVERS ........................................................................................................................37
5.3.1.1 Energy cost advantage of LNG over alternate energy sources for end
users.................................................................................................................37
5.3.1.2 Environmental benefits......................................................................................38
5.3.1.3 Fiscal regime and subsidies...............................................................................38
5.3.2 RESTRAINTS...................................................................................................................38
5.3.2.1 Highly capital-intensive LNG systems and supply infrastructure ..........................38
5.3.3 OPPORTUNITIES ............................................................................................................. 39
5.3.3.1 Evolving LNG supply/demand............................................................................39
5.3.3.2 Integration of new technologies .........................................................................39
5.3.4 CHALLENGES .................................................................................................................39
5.3.4.1 Expensive supply chain......................................................................................39
5.4 IMPACT ANALYSIS ........................................................................................................................40
5.4.1 SHORT-TERM SCENARIOS ..............................................................................................40
5.4.2 MIDTERM SCENARIOS....................................................................................................40
5.4.3 LONG-TERM SCENARIOS ................................................................................................41
6 INDUSTRY TRENDS .................................................................................................. 42
6.1 INTRODUCTION ............................................................................................................................42
6.2 VALUE-CHAIN ANALYSIS ...............................................................................................................42
6.3 PORTER’S FIVE FORCES ANALYSIS................................................................................................43
6.3.1 THREAT OF NEW ENTRANTS ............................................................................................44
6.3.2 THREAT OF SUBSTITUTES................................................................................................44
6.3.3 BARGAINING POWER OF SUPPLIERS ..............................................................................45
6.3.4 BARGAINING POWER OF BUYERS ...................................................................................45
6.3.5 INTENSITY OF COMPETITIVE RIVALRY ..............................................................................45
6.4 MACROECONOMIC OVERVIEW......................................................................................................46
6.4.1 INTRODUCTION ..............................................................................................................46
6.4.2 LNG EXPORTS ................................................................................................................46
6.4.3 LNG IMPORTS ................................................................................................................47
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
7 SMALL-SCALE LNG MARKET, BY TYPE (SUPPLY SIDE) ................................................ 48
7.1 INTRODUCTION ............................................................................................................................49
7.2 LIQUEFACTION TERMINAL.............................................................................................................50
7.3 REGASIFICATION TERMINAL .........................................................................................................50
8 SMALL-SCALE LNG TERMINAL MARKET, BY END USER (DEMAND SIDE).................... 52
8.1 INTRODUCTION ............................................................................................................................53
8.2 HEAVY-DUTY VEHICLES .................................................................................................................54
8.3 ELECTRIC POWER GENERATION ....................................................................................................55
8.4 MARINE TRANSPORT ....................................................................................................................56
8.5 OTHERS .......................................................................................................................................57
9 SMALL-SCALE LNG MARKET, BY REGION .................................................................. 58
9.1 INTRODUCTION ............................................................................................................................59
9.2 NORTH AMERICA ..........................................................................................................................61
9.2.1 U.S. ...............................................................................................................................63
9.2.2 CANADA.........................................................................................................................64
9.2.3 MEXICO .........................................................................................................................64
9.3 EUROPE .......................................................................................................................................65
9.3.1 U.K. ...............................................................................................................................68
9.3.2 FRANCE .........................................................................................................................68
9.3.3 SPAIN ............................................................................................................................69
9.3.4 PORTUGAL .....................................................................................................................70
9.3.5 NORWAY ........................................................................................................................70
9.3.6 ITALY..............................................................................................................................71
9.3.7 REST OF EUROPE ...........................................................................................................72
9.4 ASIA-PACIFIC ...............................................................................................................................72
9.4.1 CHINA............................................................................................................................76
9.4.2 JAPAN ............................................................................................................................ 76
9.4.3 INDIA .............................................................................................................................77
9.4.4 SOUTH KOREA................................................................................................................78
9.4.5 TAIWAN..........................................................................................................................78
9.4.6 SINGAPORE ...................................................................................................................79
9.4.7 REST OF ASIA-PACIFIC ...................................................................................................80
9.5 MIDDLE EAST & AFRICA (MEA)......................................................................................................80
9.5.1 UAE ...............................................................................................................................82
9.5.2 ISRAEL...........................................................................................................................83
9.5.3 KUWAIT..........................................................................................................................84
9.5.4 REST OF MIDDLE EAST & AFRICA ....................................................................................85
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
9.6 SOUTH AMERICA ..........................................................................................................................85
9.6.1 BRAZIL...........................................................................................................................87
9.6.2 CHILE.............................................................................................................................88
9.6.3 ARGENTINA .................................................................................................................... 89
9.6.4 COLOMBIA.....................................................................................................................89
9.6.5 REST OF SOUTH AMERICA ..............................................................................................90
10 COMPETITIVE LANDSCAPE ....................................................................................... 91
10.1 INTRODUCTION ............................................................................................................................91
10.2 COMPETITIVE SITUATIONS AND TRENDS........................................................................................92
10.3 MARKET SHARE ANALYSIS FOR THE KEY PLAYERS .........................................................................94
10.4 COMPETITIVE LANDSCAPE............................................................................................................95
10.4.1 AGREEMENTS ................................................................................................................95
10.4.2 EXPANSIONS..................................................................................................................96
10.4.3 JOINT VENTURES ............................................................................................................97
11 COMPANY PROFILES................................................................................................ 98
11.1 INTRODUCTION ............................................................................................................................98
11.2 THE LINDE GROUP ........................................................................................................................99
11.2.1 BUSINESS OVERVIEW.....................................................................................................99
11.2.2 PRODUCTS OFFERED....................................................................................................100
11.2.3 RECENT DEVELOPMENTS..............................................................................................100
11.2.4 SWOT ANALYSIS...........................................................................................................101
11.2.5 MNM VIEW...................................................................................................................101
11.3 WÄRTSILÄ CORPORATION...........................................................................................................102
11.3.1 BUSINESS OVERVIEW...................................................................................................102
11.3.2 PRODUCTS OFFERED....................................................................................................103
11.3.3 RECENT DEVELOPMENTS..............................................................................................103
11.3.4 SWOT ANALYSIS...........................................................................................................104
11.3.5 MNM VIEW...................................................................................................................104
11.4 HONEYWELL INTERNATIONAL INC................................................................................................105
11.4.1 BUSINESS OVERVIEW...................................................................................................105
11.4.2 PRODUCTS OFFERED....................................................................................................106
11.4.3 RECENT DEVELOPMENTS..............................................................................................106
11.4.4 SWOT ANALYSIS...........................................................................................................107
11.4.5 MNM VIEW...................................................................................................................107
11.5 GENERAL ELECTRIC....................................................................................................................108
11.5.1 BUSINESS OVERVIEW...................................................................................................108
11.5.2 PRODUCTS OFFERED....................................................................................................109
11.5.3 SWOT ANALYSIS...........................................................................................................109
11.5.4 MNM VIEW...................................................................................................................110
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
11.6 ENGIE ........................................................................................................................................111
11.7 11.6.1 BUSINESS OVERVIEW...................................................................................................111
11.8
11.9 11.6.2 PRODUCTS OFFERED....................................................................................................112
11.10
11.11 11.6.3 RECENT DEVELOPMENTS..............................................................................................112
11.12
11.13 11.6.4 SWOT ANALYSIS...........................................................................................................113
11.6.5 MNM VIEW...................................................................................................................113
IHI CORPORATION ......................................................................................................................114
11.7.1 BUSINESS OVERVIEW...................................................................................................114
11.7.2 PRODUCTS OFFERED....................................................................................................115
11.7.3 RECENT DEVELOPMENT................................................................................................115
GAZPROM ..................................................................................................................................116
11.8.1 BUSINESS OVERVIEW...................................................................................................116
11.8.2 PRODUCTS OFFERED....................................................................................................117
11.8.3 RECENT DEVELOPMENT................................................................................................117
SKANGAS AS..............................................................................................................................118
11.9.1 BUSINESS OVERVIEW...................................................................................................118
11.9.2 PRODUCTS OFFERED....................................................................................................118
11.9.3 RECENT DEVELOPMENTS..............................................................................................119
SOFREGAZ S.A. ..........................................................................................................................120
11.10.1 BUSINESS OVERVIEW...................................................................................................120
11.10.2 PRODUCTS...................................................................................................................120
DRESSER-RAND GROUP, INC......................................................................................................121
11.11.1 BUSINESS OVERVIEW...................................................................................................121
11.11.2 PRODUCTS OFFERED....................................................................................................121
11.11.3 RECENT DEVELOPMENTS..............................................................................................121
PROMETHEUS ENERGY ...............................................................................................................122
11.12.1 BUSINESS OVERVIEW...................................................................................................122
11.12.2 PRODUCTS OFFERED....................................................................................................122
11.12.3 RECENT DEVELOPMENT................................................................................................122
OTHER PLAYERS IN THE MARKET.................................................................................................123
11.13.1 PLUM ENERGY .............................................................................................................123
11.13.2 EXCELERATE ENERGY L.P..............................................................................................123
11.13.3 CRYOSTAR SAS ............................................................................................................123
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
12 APPENDIX.............................................................................................................. 124
12.1 INSIGHTS FROM INDUSTRY EXPERTS ..........................................................................................124
12.2 DISCUSSION GUIDE ...................................................................................................................125
12.3 KNOWLEDGE STORE: MARKETSANDMARKETS SUBSCRIPTION PORTAL........................................129
12.4 INTRODUCING RT: REAL-TIME MARKET INTELLIGENCE.................................................................131
12.5 AVAILABLE RT SNAPSHOT ...........................................................................................................132
12.6 RELATED REPORTS .....................................................................................................................132
12.7 AUTHOR DETAILS........................................................................................................................133
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
LIST OF TABLES
TABLE 1 SMALL-SCALE LNG MARKET SIZE, BY TYPE 2014–2021 (MTPA) 49
TABLE 2 50
TABLE 3 SMALL-SCALE LNG MARKET SIZE IN LIQUEFACTION TERMINAL, BY REGION 51
TABLE 4 2014–2021 (MTPA) 54
TABLE 5 55
TABLE 6 SMALL-SCALE LNG MARKET SIZE INREGASIFICATION TERMINAL, BY REGION, 55
TABLE 7 2014–2021 (MTPA) 56
TABLE 8 57
TABLE 9 SMALL-SCALE LNG MARKET SIZE, BY END USER, 2014–2021 (MTPA) 60
TABLE 10 60
TABLE 11 SMALL-SCALE LNG MARKET SIZE IN HEAVY-DUTY VEHICLES, BY REGION, 61
TABLE 12 2014–2021 (MTPA) 61
TABLE 13 62
TABLE 14 SMALL-SCALE LNG MARKET SIZE IN ELECTRIC POWER GENERATION, BY REGION, 62
TABLE 15 2014–2021 (MTPA) 62
TABLE 16 63
TABLE 17 SMALL-SCALE LNG MARKET SIZE IN MARINE TRANSPORT, BY REGION, 64
TABLE 18 2014–2021 (MTPA) 65
TABLE 19 65
TABLE 20 SMALL-SCALE LNG MARKET SIZE IN OTHER END USERS, BY REGION, 66
TABLE 21 2014–2021 (MTPA) 66
TABLE 22 67
TABLE 23 SMALL-SCALE LNG MARKET SIZE, BY REGION (SUPPLY SIDE), 2014–2021 (MTPA) 67
TABLE 24 68
TABLE 25 SMALL-SCALE LNG MARKET SIZE, BY REGION (DEMAND SIDE), 69
2014–2021 (MTPA)
8
NORTH AMERICA: SMALL-SCALE LNG LIQUEFACTION TERMINAL CAPACITY (SUPPLY-
SIDE), BY COUNTRY, 2014–2021 (MTPA)
NORTH AMERICA: SMALL-SCALE LNG REGASIFICATION TERMINAL CAPACITY
(SUPPLY-SIDE), BY COUNTRY, 2014–2021 (MTPA)
NORTH AMERICA: SMALL-SCALE LNG MARKET SIZE (SUPPLY-SIDE), BY TYPE,
2014–2021 (MTPA)
NORTH AMERICA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY COUNTRY,
2014–2021 (MTPA)
NORTH AMERICA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE),
BY END USER, 2014–2021 (MTPA)
U.S.: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
CANADA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
MEXICO: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
EUROPE: SMALL-SCALE LNG MARKET SIZE IN LIQUEFACTION TERMINAL
(SUPPLY-SIDE), BY COUNTRY, 2014–2021 (MTPA)
EUROPE: SMALL-SCALE LNG MARKET SIZE IN REGASIFICATION TERMINAL
(SUPPLY-SIDE), BY COUNTRY, 2014–2021 (MTPA)
EUROPE: SMALL-SCALE LNG MARKET SIZE (SUPPLY-SIDE), BY TYPE,
2014–2021 (MTPA)
EUROPE: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY COUNTRY,
2014–2021 (MTPA)
EUROPE: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
U.K.: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
FRANCE: SMALL-SCALE LNG MARKET SIZE (DEMAND–SIDE), BY END USER,
2014–2021 (MTPA)
April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
TABLE 26 SPAIN: SMALL-SCALE LNG MARKET SIZE (DEMNAD-SIDE), BY END USER, 69
TABLE 27 2014–2021 (MTPA) 70
TABLE 28 71
TABLE 29 PORTUGAL: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER, 71
TABLE 30 2014–2021 (MTPA) 72
TABLE 31 74
TABLE 32 NORWAY: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER, 74
TABLE 33 2014–2021 (MTPA) 74
TABLE 34 75
TABLE 35 ITALY: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER, 75
TABLE 36 2014–2021 (MTPA) 76
TABLE 37 77
TABLE 38 REST OF EUROPE: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), 77
TABLE 39 BY END USER, 2014–2021 (MTPA) 78
TABLE 40 79
TABLE 41 ASIA-PACIFIC: SMALL-SCALE LNG LIQUEFACTION TERMINAL CAPACITY 79
TABLE 42 (SUPPLY-SIDE), BY COUNTRY, 2014–2021 (MTPA) 80
TABLE 43 81
TABLE 44 ASIA-PACIFIC: SMALL-SCALE LNG REGASIFICATION TERMINAL CAPACITY 81
TABLE 45 (SUPPLY-SIDE), BY COUNTRY, 2014–2021 (MTPA) 81
TABLE 46 82
TABLE 47 ASIA-PACIFIC: SMALL-SCALE LNG MARKET SIZE (SUPPLY-SIDE), BY TYPE, 82
TABLE 48 2014–2021 (MTPA) 83
TABLE 49 83
TABLE 50 ASIA-PACIFIC: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY COUNTRY, 84
TABLE 51 2014–2021 (MTPA) 85
9
ASIA-PACIFIC: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
CHINA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
JAPAN: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
INDIA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
SOUTH KOREA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
TAIWAN: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
SINGAPORE: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
REST OF ASIA-PACIFIC: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE),
BY END USER, 2014–2021 (MTPA)
MEA: SMALL-SCALE LNG LIQUEFACTION TERMINAL CAPACITY (SUPPLY-SIDE),
BY COUNTRY, 2014–2021 (MTPA)
MEA: SMALL-SCALE LNG REGASIFICATION TERMINAL CAPACITY (SUPPLY-SIDE),
BY COUNTRY, 2014–2021 (MTPA)
MEA: SMALL-SCALE LNG MARKET SIZE (SUPPLY-SIDE), BY TYPE,
2014–2021 (MTPA)
MEA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY COUNTRY,
2014–2021 (MTPA)
MEA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
UAE: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
ISRAEL: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
KUWAIT: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
REST OF MEA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
TABLE 52 SOUTH AMERICA: SMALL-SCALE LNG LIQUEFACTION TERMINAL CAPACITY 85
TABLE 53 (SUPPLY-SIDE), BY COUNTRY, 2014–2021 (MTPA)
TABLE 54 86
TABLE 55 SOUTH AMERICA: SMALL-SCALE LNG REGASIFICATION TERMINAL CAPACITY
TABLE 56 (SUPPLY-SIDE), BY COUNTRY, 2014–2021 (MTPA) 86
TABLE 57 86
TABLE 58 SOUTH AMERICA: SMALL-SCALE LNG MARKET SIZE (SUPPLY-SIDE), BY TYPE,
TABLE 59 2014–2021 (MTPA) 87
TABLE 60
TABLE 61 SOUTH AMERICA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY COUNTRY, 87
TABLE 62 2014–2021 (MTPA) 88
TABLE 63
TABLE 64 SOUTH AMERICA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER, 89
2014–2021 (MTPA)
90
BRAZIL: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER, 90
2014–2021 (MTPA) 95
96
CHILE: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER, 97
2014–2021 (MTPA)
ARGENTINA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
COLOMBIA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE), BY END USER,
2014–2021 (MTPA)
REST OF SOUTH AMERICA: SMALL-SCALE LNG MARKET SIZE (DEMAND-SIDE),
BY END USER, 2014–2021 (MTPA)
AGREEMENTS, 2014–2016
EXPANSIONS, 2014–2016
JOINT VENTURES, 2014–2016
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
LIST OF FIGURES
FIGURE 1 SMALL-SCALE LNG MARKET: RESEARCH DESIGN 18
FIGURE 2 22
FIGURE 3 MARKET SIZE ESTIMATION: BOTTOM-UP APPROACH 23
FIGURE 4 24
FIGURE 5 MARKET SIZE ESTIMATION: TOP-DOWN APPROACH
26
FIGURE 6 SMALL-SCALE LNG MARKET: DATA TRIANGULATION
27
FIGURE 7 REGASIFICATION TERMINAL TO DOMINATE SMALL-SCALE LNG MARKET BETWEEN
2016 AND 2021 28
FIGURE 8
HEAVY-DUTY VEHICLES TO DOMINATE SMALL-SCALE LNG MARKET DURING THE 30
FIGURE 9 FORECAST PERIOD
31
FIGURE 10 ASIA-PACIFIC TO BE THE LARGEST SMALL-SCALE LNG MARKET BETWEEN
2016 AND 2021 31
FIGURE 11
SMALL-SCALE LNG MARKET TO WITNESS RAPID GROWTH BETWEEN 32
FIGURE 12 2016 AND 2021
33
FIGURE 13 ASIA-PACIFIC SMALL-SCALE LNG MARKET TO REGISTER THE HIGHEST CAGR
BETWEEN 2016 AND 2021 37
FIGURE 14 40
FIGURE 15 JAPAN ACCOUNTED FOR LARGEST SHARE OF SMALL-SCALE LNG MARKET 42
FIGURE 16 GLOBALLY IN 2015 46
FIGURE 17 47
FIGURE 18 ASIA-PACIFIC TO BE FASTEST-GROWING SMALL-SCALE LNG MARKET BETWEEN
2016 AND 2021 49
FIGURE 19
HEAVY-DUTY VEHICLES ACCOUNTED FOR THE LARGEST SHARE OF THE SMALL- 53
FIGURE 20 SCALE LNG MARKET IN ASIA-PACIFIC
59
FIGURE 21 DRIVERS, RESTRAINTS, OPPORTUNITIES, AND CHALLENGES IN THE SMALL-SCALE
LNG MARKET 73
FIGURE 22
FACTORS INFLUENCING SHORT TERM, MIDTERM, AND LONG TERM SCENARIOS 91
FIGURE 23
SMALL-SCALE LNG: VALUE-CHAIN ANALYSIS 92
FIGURE 24
LNG EXPORTS AND MARKET SHARE BY COUNTRY (MTPA), 2015 93
FIGURE 25
LNG IMPORTS AND MARKET SHARE BY COUNTRY (MTPA), 2015 94
FIGURE 26 98
FIGURE 27 REGASIFICATION TERMINAL TO DOMINATE SMALL-SCALE LNG MARKET BETWEEN 99
FIGURE 28 2016 AND 2021 101
FIGURE 29 102
HEAVY-DUTY VEHICLES TO DOMINATE THE SMALL-SCALE LNG MARKET BETWEEN 11
2016 AND 2021
REGIONAL SNAPSHOT (2016–2021): CHINA AND SINGAPORE ARE THE EMERGING
HOTSPOTS
ASIA-PACIFIC MARKET SNAPSHOT: CHINA IS THE FASTEST-GROWING SMALL-SCALE
LNG MARKET
AGREEMENTS WAS THE MOST PREFFERED GROWTH STRATEGY BY KEY PLAYERS
BETWEEN 2014 AND 2016
2016 WAS OBSERVED TO BE MOST ACTIVE YEAR IN TERMS OF DEVELOPMENTS
WITHIN THE SMALL-SCALE LNG MARKET
MAJOR GROWTH STRATEGIES IN THE GLOBAL SMALL-SCALE LNG MARKET,
2014-2016
TOP 5 MARKET PLAYERS ACCOUNTED FOR MORE THAN HALF OF THE MARKET
SHARE IN 2015
GEOGRAPHIC REVENUE MIX OF TOP 5 MARKET PLAYERS
THE LINDE GROUP: COMPANY SNAPSHOT
THE LINDE GROUP: SWOT ANALYSIS
WÄRTSILÄ CORPORATION: COMPANY SNAPSHOT
April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
FIGURE 30 WÄRTSILÄ CORPORATION: SWOT ANALYSIS 104
FIGURE 31 HONEYWELL INTERNATIONAL INC.: COMPANY SNAPSHOT 105
FIGURE 32 HONEYWELL INTERNATIONAL INC.: SWOT ANALYSIS 107
FIGURE 33 GENERAL ELECTRIC: COMPANY SNAPSHOT 108
FIGURE 34 GENERAL ELECTRIC: SWOT ANALYSIS 109
FIGURE 35 ENGIE: COMPANY SNAPSHOT 111
FIGURE 36 ENGIE: SWOT ANALYSIS 113
FIGURE 37 IHI CORPORATION: COMPANY SNAPSHOT 114
FIGURE 38 GAZPROM: COMPANY SNAPSHOT 116
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
LIST OF ABBREVIATIONS
ABBREVIATION FULL FORM
ABNT Brazilian National Standards Association
APAC Asia-Pacific
BCGA British Compressed Gases Association
BOG Boil-Off Gas
CAGR Compound Annual Growth Rate
ECA Emission Control Areas
EPA Environmental Protection Agency
EU European Union
FERC Federal Energy Regulatory Commission
GCC Gulf Cooperation Council
GDP Gross Domestic Product
HFO Heavy Fuel Oil
ICEP Installation Classified for Environmental Protection
ICPE Installation Classified for Environmental Protection
IGEM Institutions of Gas Engineers and Managers
IMO The International Maritime Organization
INGL Israel Natural Gas Lines Company
INMETRO National Institute of Metrology
ISO International Organization of Standardization
LNG Liquefied Natural Gas
MARPOL Marine Pollution
MEA The Middle East & Africa
MGO Marine Gas Oil
MTPA Million Metric Tons Per Annum
NDRC National Development and Reform Commission
NFPA National Fire Protection Association
NOx Nitrogen Oxide
OIML International Organization of Legal Metrology
OISD Oil Industry & Safety Directorate
PESO The Petroleum & Explosives Safety Organization
PHMSA Pipelines and Hazardous Materials Safety Administration
R&D Research and Development
SECA Sulphur Emission Control Area
SMPV Static & Mobile Pressure Vessel
SOx Sulphur Oxide
U.K. United Kingdom
U.S. United States
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April 2017 © MarketsandMarkets
SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
1 INTRODUCTION
1.1 OBJECTIVES OF THE STUDY
To define, describe, and forecast the global small-scale LNG market in terms of volume (MTPA)
To provide detailed information regarding major factors influencing the growth of the market
(drivers, restraints, opportunities, and industry-specific challenges) and also market outlook
which includes short-term, mid-term, and long-term scenarios
To evaluate the small-scale LNG market on the basis of type and end user
To forecast the value of market segments with respect to five main regions (along with
countries), namely, North America, Europe, Asia-Pacific, the Middle East & Africa, and South
America.
To analyze micromarkets1 with respect to individual growth trends, prospects, and contribution
to the total market
To analyze the opportunities in the market for the key players and details of the competitive
landscape for the market leaders
To profile the key players and comprehensively analyze their market shares and core
competencies2
To analyze competitive developments such as agreements, joint ventures, mergers &
acquisitions, new product developments, and R&D in the small-scale LNG market
1.2 MARKET DEFINITION
Small-scale LNG terminals can be regarded as the facilities including liquefaction and regasification
terminals with a capacity of less than 1 million tons per annum (MTPA). It is the LNG produced from large-
scale or small-scale liquefaction terminals and is regasified at small-scale regasification terminals to serve
end users such as heavy-duty transport and electric power generation. Favorable government policies
supporting the adoption of LNG, increasing exploration & production activities, and growing demand from
remote areas are some of the major factors anticipated to aid the global small scale LNG market.
Currently, small-scale LNG infrastructure is in the development stage in many countries such as Norway,
Sweden, Canada, and Malaysia. In 1964, first commercial LNG cargo was shipped from an LNG export
terminal in Algeria. Since then, LNG has evolved into a global commodity. The small-scale LNG market is
mainly driven by economies of scale in the design and construction of facilities. Small-scale LNG has
gained attractiveness in recent years, due to several factors including environmental emission policies and
modification of existing LNG terminals.
1. Micromarkets1 are defined as the segments and subsegments of the small-scale LNG market included in the report
2. Core competencies2 of the companies are captured in terms of their key developments and key strategies adopted by them
to sustain their position in the market
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1.3 SCOPE OF THE STUDY
1.3.1 MARKETS COVERED
SMALL-SCALE LNG MARKET
BY TYPE BY END USERS BY REGION
• Liquefaction Terminal • Heavy-duty Vehicles • North America
• Regasification Terminal • Electric Power Generation • Europe
• Maritime Transport • Asia-Pacific
• Others* • Middle East & Africa
• South America
Note: Others include rail transport, space heating, and air conditioning.
Source: MarketsandMarkets Analysis
The small-scale LNG market is segmented on the basis of region, as follows:
BY REGION
NORTH EUROPE ASIA-PACIFIC MIDDLE EAST SOUTH
AMERICA & AFRICA AMERICA
U.S. U.K. China UAE Brazil
Canada France Japan Israel Chile
Mexico Spain India Kuwait Argentina
Portugal South Korea Rest of MEA Colombia
Norway Taiwan Rest of South
Italy
Rest of Europe Singapore America
Rest of Asia-Pacific
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1.3.2 YEARS CONSIDERED FOR THE STUDY
2021-p
2016-e
2015
2014
HISTORICAL YEAR BASE YEAR ESTIMATED YEAR PROJECTED YEAR
1.4 CURRENCY
The currency used in the report is United States dollar with the market size indicated in USD
million For companies reporting their revenue in USD. The revenues were collected from their
annual reports and investor presentations.
For companies reporting their revenues in other currencies, average annual currency
conversion rate was used to convert the value into USD.
Currency rates are converted into USD by using the average exchange rates for respective years
till 2015.
1.5 PACKAGE
The unit considered in this report is in terms of Million Metric Tons Per Annum (MTPA).
The unit is expressed in terms of the total capacity additions of small-scale liquefaction and
regasification terminals and natural gas demand from the end users.
1.6 LIMITATIONS
Certain company figures, such as plant operating factors and revenues, were inaccessible
because of restrictions placed by the companies. Hence, the figures were estimated based on
regional trends, company product portfolios, and secondary and primary sources. The prices of
small-scale LNG vary by type, company, and region.
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1.7 STAKEHOLDERS
Small-scale LNG producers
Trader, distributors, and suppliers of small-scale LNG
Small-scale LNG companies
LNG Associations
Natural gas suppliers
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2 RESEARCH METHODOLOGY
2.1 RESEARCH DATA
This technical, market-oriented, and commercial research study of the small-scale LNG market involves the
use of extensive secondary sources such as encyclopedia, directories, and databases to identify and
collect information. Primary sources that include selected experts from related industries and selected
suppliers have been interviewed to obtain and verify important information as well as to assess growth
prospects.
FIGURE 1 SMALL-SCALE LNG MARKET: RESEARCH DESIGN
HISTORICAL DATA MARKET SIZE REGIONAL USAGE PATTERN
EVOLUTION COMPETITIVE LANDSCAPE
FOR THE SMALL-
SCALE LNG
MARKET
INFLUENCING MARKET DRIVERS: MARKET RESTRAINTS: MARKET OPPORTUNITIES:
FACTORS • Energy cost advantage of • Highly capital-intensive • Evolving LNG
(Market Trends and LNG over alternate energy LNG systems and supply supply/demand
Dynamics) sources forend-users. infrastructure • Integration of new
• Environmental benefits
• Fiscal regime and • AGREEMENTS & technologies
subsidies CONTRACTS:
23 deals in the last three COUNTRY-WISE ECONOMIC
MARKET CHALLENGES years INDICATORS
• Expensive supply chain
• AGREEMENTS: More than
5 new product launches
in the last three years
FORECAST HISTORICAL DATA FOR THE MARKET SIZE & FORECAST: ARRIVE AT THE MARKET
MARKET • By Type SIZE, SHARE, AND CAGR
• By End User FOR THE SMALL-SCALE LNG
HIGH GROWTH SEGMENTS • By Region
MARKET
Source: Secondary Literature, Expert Interviews, and MarketsandMarkets Analysis
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2.1.1 SECONDARY DATA
In the secondary research process, various sources have been referred to for identifying and collecting
information for this study. Secondary sources include annual reports, press releases, and investor
presentations of companies; white papers; certified publications; articles from recognized authors; and
gold & silver standard websites.
Secondary research has mainly been used to obtain key information about the supply chain of the industry,
the total pool of key players, market classification & segmentation, according to the industry trends to the
bottom-most level, regional markets, and key developments from the market-oriented perspective.
2.1.1.1 Key data from secondary sources
PARAMETER SOURCE
MARKET SIZE • Company Financials
• Magazines
(Volume) • Journals
• Press Releases
• Paid Databases, and
• MarketsandMarkets Data Repository
REVENUE OF COMPANIES • Annual Reports
• Company Websites
QUALITATIVE INFORMATION • Public Databases, and
• MarketsandMarkets Data Repository
(Market Dynamics and
Market Trends) • Company Websites
• Annual Reports
• Press Releases, and
• MarketsandMarkets Data Repository
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2.1.2 PRIMARY DATA
In the primary research process, various sources from both supply and demand sides have been
interviewed to obtain qualitative and quantitative information for this report. The primary sources from the
supply side include industry experts such as CEOs, vice presidents, marketing directors, technology &
innovation directors, and related key executives from various key companies and organizations operating
in the ink additives market. Primary sources from the demand side include experts and key persons from
the end user industries.
After the complete market engineering process (which includes calculations of market statistics, market
breakdown, market size estimations, market forecasts, and data triangulation), extensive primary research
was conducted to gather information and to verify and validate the critical numbers arrived at. Primary
research has also been conducted to identify the segmentations, applications, Porter’s Five Forces, key
players, competitive landscape, and key market dynamics such as drivers, opportunities, industry trends,
and strategies of the key players.
2.1.2.1 Key data from primary sources
TYPE PARAMETER KEY DATA
GEOGRAPHIC Overall market and The global small-scale LNG market, by region–
SPLIT subsegments in 2015 North America
Europe
CAGR of each region during Asia-Pacific
the forecast period Middle East and Africa
(2016–2021) South America
GLOBAL The global market size for The global small-scale LNG market, by type
MARKET SIZE the year 2015 Liquefaction Terminal
Regasification Terminal
CAGR during the forecast
period (2016–2021)
MARKET Global small-scale LNG Global small-scale LNG market, by end user
SPLIT market, by type, by end Heavy-duty Vehicles
user, and by region Electric Power Generation
Marine Transport
Others
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2.1.2.2 Key industry insights
“Increasing deployment of
refueling infrastructure is expected
to drive the demand for small-scale
LNG in North America
““
“ Chief Manager,
LNG Terminal Company
“Shale evolution has “Increasing demand for LNG in
marine transport is expected to drive
stipulated the production of LNG in the small-scale LNG market in
the U.S. Europe.
General Manager, Vice President,
Leading LNG Terminal Company Leading LNG Terminal Company
2.1.2.3 Breakdown of primary interviews
BY COMPANY TYPE BY DESIGNATION BY REGION
3% 24% 10%
25% 76% 25%
C Level Manager Level
20%
72%
45%
Tier 1 Tier 2 Tier 3 North America Eu rope
Asia- Paci fic ROW
Note 2: Tier 1, Tier 2, and Tier 3 companies are classified based on their market share, product portfolio, and regional & global
presence.
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2.2 MARKET SIZE ESTIMATION
Both the top-down and bottom-up approaches have been used to estimate and validate the sizes of the
small-scale LNG market for their various applications in each region. The key players in the market have
been identified through secondary research, and their shares in respective regions have been determined
through primary and secondary research methods. This entire procedure includes the study of annual and
financial reports of the key market players and extensive interviews for insights from industry leaders such
as CEOs, vice presidents, directors, and marketing executives. All percentage shares, splits, and
breakdowns have been determined using secondary sources and verified through primary sources.
The following figures are illustrative representations of the overall market size estimation process
employed for this study.
2.2.1 BOTTOM-UP APPROACH
FIGURE 2 MARKET SIZE ESTIMATION: BOTTOM-UP APPROACH
Global Total Market Size (MTPA) =
Market
Value North America (Volume of product segment 1) + Europe
(Volume of product segment 2) + ...........
Summation of
A x B of all Regions
Average Selling Price (ASP) PRIMARY SOURCES:
per Region for Each Type of Demand and Supply Side Experts
Product Segment (B) SECONDARY SOURCES:
Annual Reports, Presentations,
Volume Estimation for Small-Scale Press Release, Journals, Paid
LNG Regional Production Volume (A) Databases, and
MarketsandMarkets Repository
Regional Study Production and Demand
Trends
Market Identification
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2.2.2 TOP-DOWN APPROACH
FIGURE 3 MARKET SIZE ESTIMATION: TOP-DOWN APPROACH
Global Small-Scale LNG Market (MTPA) GLOBAL SMALL-SCALE LNG MARKET SIZE IS VALIDATED
THROUGH PRIMARIES
(Demand & Supply Side Experts)
Percent Splits for Segments of the PRIMARY SOURCES:
Small-Scale LNG Market Demand and Supply Side Experts
Regional Split SECONDARY SOURCES:
Annual Reports, Presentations,
Regional Press Release, Journals,
Market Paid Databases, and
MarketsandMarkets Repository
The bottom-up approach has been used to arrive at the overall market size of small-scale LNG market from
the revenue of key companies and their shares in the market.
The calculations based on the revenues of the key companies identified in the market have led to the
overall market size. This overall market size has been used in the top-down approach to estimate the sizes
of other individual markets (mentioned in the market segmentation by type, end user industry, and region)
via percentage splits from secondary and primary research methods. For the calculation of each type of
specific market segment, the most appropriate immediate parent market size has been used for
implementing the top-down approach.
The bottom-up approach has also been implemented for the data extracted from secondary research to
validate the market sizes obtained of the segments, in terms of value. The market shares have then been
estimated for each company to verify the revenue shares used earlier in the bottom-up approach. The
exact values of the overall parent market size and individual market sizes have been determined and
confirmed in this study with the data triangulation procedure and validation of data through primary
interviews. The data triangulation procedure implemented for this study is explained in the next section.
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2.3 DATA TRIANGULATION
After arriving at the overall market size from the estimation process explained above, the total market was
split into several segments. To complete the overall market engineering process and arrive at the exact
statistics for all segments, data triangulation, and market breakdown procedures have been employed,
wherever applicable. The data has been triangulated by studying various factors and trends from both the
demand and supply sides. In addition, the market has been validated by using both the top-down and
bottom-up approaches.
FIGURE 4 SMALL-SCALE LNG MARKET: DATA TRIANGULATION
DEMAND SIDE PRIMARY SOURCES SECONDARY SOURCES
INTERVIEWS WITH: MnM KNOW* • Annual reports, presentations,
and company websites
SUPPLY SIDE • Vice presidents PRIMARY DATA
• Purchase managers in end- SOURCE TRIANGULATION • Press release and news articles
• Industry journals and paid
use sectors SESCEOCNODNADRAYRY
• Marketing and business SOSUORUCRECE databases
development managers • Energy Information
Administration (EIA)
INTERVIEWS WITH:
• United Nations Economic
• Vice presidents Commission for Europe
• Marketing directors (UNECE)
• Sales managers
• Technology and innovation • International Gas Union (IGU)
directors and related key
executives from various key
companies and
organizations operating in
the market
INFORMATION SOURCED
Key Players Competitive Landscape Opportunities/ Market Size and
Challenges Market Share (2015)
Drivers/Restraints Forecasts Regional
Analysis
MnM KNOW* stands for MarketsandMarkets’ 'Knowledge Asset Management' framework. In this context, it stands for existing
market research knowledge repository of over 5,000 granular markets, our flagship competitive intelligence and market
research platform "RT", subject matter experts, and independent consultants. MnM KNOW acts as an independent source
that helps us validate information gathered from primary and secondary sources.
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2.4 RESEARCH ASSUMPTIONS
PARAMETER ASSUMPTION
ECONOMIC STABILITY A positive economic climate has been assumed to continue in all the
regions until 2021
The growing economy has been estimated to attract key companies in
the market
EXCHANGE RATE The average USD exchange rate of all the foreign countries has been
taken for the year 2015. It is assumed that the fluctuation of the USD
value will not be significant enough to affect the projections to a
notable extent.
PRICING TREND Inflation has not been considered for pricing. The values are rounded-
off at subsequent levels.
Region-wise different prices have been considered and it was assumed
to be constant for countries within the same region.
POLITICAL STABILITY A stable political environment has been assumed to prevail in the key
regions.
QUALITATIVE ANALYSIS The qualitative analysis done from the quantitative data arrived at is
solely based on the understanding of the market and its trends by the
team of experts involved in making this report.
COMPOUND ANNUAL GROWTH The CAGR is calculated on the basis of the natural gas demand from
RATE (CAGR) the end-use applications and is not considered in case of total capacity
installations as in some countries total capacity is expected to remain
CAPACITY ADDITIONS the same during the forecast period.
The capacity additions in this report is in terms of MTPA and is
estimated on the basis of the ongoing small-scale LNG projects and
the upcoming projects that are under construction and is expected to
come online in the coming years.
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3 EXECUTIVE SUMMARY
Small-scale LNG terminals are the facilities that include liquefaction and regasification terminals with a
capacity of less than 1 million tons per annum (MTPA) and vessels with an LNG storage capacity of less
than 30,000 cubic meters. Presently, small-scale LNG infrastructure is in the development stage in many
countries such as Norway, Sweden, Canada, and Malaysia.
In 1964, first commercial LNG cargo was shipped from an LNG export terminal in Algeria. Since then, LNG
has evolved into a global commodity. The small-scale LNG market is mainly driven by economies of scale in
the design and construction of facilities. Small-scale LNG has gained attractiveness in the recent years,
due to several factors including environmental emission policies and modification of existing LNG
terminals.
The global small-scale LNG market is witnessing growth on account of increasing applications,
technological advancements, and increasing demand in Asia Pacific region. Significant demand from the
developing countries such as China, India, and Taiwan is driving the global small-scale LNG market.
In terms of volume, the global market size of small-scale LNG was 256.5 MTPA in 2015 and is projected to
reach 299.2 MTPA by 2021, at a CAGR of 2.7% between 2016 and 2021.
FIGURE 5 REGASIFICATION TERMINAL TO DOMINATE SMALL-SCALE LNG MARKET BETWEEN
2016 AND 2021
250.0
200.0
M arket Size (MTPA) 150.0
100.0
50.0
0.0 Regasification Terminal Liquefaction Terminal
186.1 62.8
2016 207.4 87.1
2021
Source: Secondary Research, Expert Interviews, and MarketsandMarkets Analysis
Small-scale regasification terminal accounted for the largest share of 75.0% of the global market in 2015.
Increasing demand for LNG from the remote locations and global commoditization of LNG are some of the
major factors that are driving the demand for LNG from small-scale regasification terminals. Some of the
other driving factors include the development of downstream infrastructure and logistics, remote
regasification terminals, trucking stations, and bunkering.
New liquefaction and distribution facilities are being constructed and operated across the globe. The
development and optimization of a wide range of processes and equipment helped to counter the
diseconomy and reduce initial investment costs associated with small-scale LNG. For instance, the
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application of pressurized LNG tanks is a more cost effective means for storing small parcels of LNG,
compared to the atmospheric flat bottom tanks.
FIGURE 6 HEAVY-DUTY VEHICLES TO DOMINATE SMALL-SCALE LNG MARKET DURING
THE FORECAST PERIOD
200.0 M arket Size (MTPA)
180.0
160.0 Heavy Duty Electric Power Maritime Transport Others
140.0 Vehicles Generation
120.0 40.4 19.8
100.0 160.2 42.0 45.4 23.9
2.40% 3.80%
80.0 181.6 48.2
60.0
40.0 2.50% 2.80%
20.0
0.0
2016
2021
CAGR (2016-2021)
Note: e –estimated and p - projected
Source: Secondary Research, Expert Interviews, and MarketsandMarkets Analysis
Heavy-duty vehicles accounted for the largest share of 61.1% of the small-scale LNG market globally in
2015. For heavy-duty vehicles, fuel costs are one of the major concerns, which is strongly dependent on
excise taxation. Stringent emission standards for heavy-duty vehicles, such as Euro 6 can easily be met
with natural gas depending on the engine technology. The price of natural gas strongly depends on local
tax regimes, since the share of the excise duties in the road fuel prices can be large. Similarly, there is an
additional potential for small-scale LNG in heavy-duty vehicles when supplied as CNG at fuel stations.
Since the past few years, natural gas as a transport fuel has been used increasingly. Direct use of LNG,
instead of CNG, helps to extend the driving range of vehicles. This makes LNG an attractive fuel for heavy-
duty vehicles as compared to diesel.
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FIGURE 7 ASIA-PACIFIC TO BE THE LARGEST SMALL-SCALE LNG MARKET BETWEEN
2016 AND 2021
NORTH AMERICA EUROPE
16.6% 24.1%
1.9% 2.1%
SOUTH AMERICA ASIA-PACIFIC
12.0% 33.6 %
3.2% 3.3%
MIDDLE EAST AND AFRICA
13.6%
2.6%
MARKET SHARE %
CAGR
Source: Secondary Research, Expert Interviews, and MarketsandMarkets Analysis
Asia-Pacific accounted for the largest share of 33.6% of the global market, in terms of volume, in 2015,
followed by Europe with a share of 24.1%. Asia-Pacific has emerged as an important consumer due to the
increasing demand for small-scale LNG on the domestic front in end users such as heavy-duty vehicles and
electric power generation. Traditionally, LNG production has been considered as a significant business in
Asia-Pacific, North America, and Europe. Partnerships and agreements between the market players are
expected to benefit the small-scale LNG industry, mainly for LNG customer (regasification terminals) to
become the independent pipeline natural gas suppliers.
In Europe, countries such as Spain and the U.K. have proposed building new small-scale liquefaction and
regasification terminals, supported by the EU subsidies, which are approximately 10 to 20% of the total
development costs. Additionally, enforcement of environmental benefits imposed by government through
regulations and policies is expected to augment the demand for LNG from small-scale utilities, globally.
The gap between the supply and demand can be met by importing LNG from large-scale liquefaction
terminals to the small-scale regasification plants, as small-scale regasification terminals can import LNG
from both large and small-scale liquefaction terminals. All the regions import LNG from large-scale
regasification terminals to their small-scale regasification terminals to meet the required demand. It
typically serves a wider range of end users such as heavy-duty vehicles, electric power generation, marine
transport, and others.
The construction of small-scale liquefaction terminals to provide LNG as a transportation fuel has
increased in China, the U.S., and other countries. LNG is being increasingly utilized in marine
transportation within the Baltic and Scandinavian region, especially in the emission control areas (ECA).
Chartersand LNG vessel owners will have to comply with Sulphur Emission Control Area (SECA) regulation
to operate LNG vessels in ECA zones. In regions such as Asia-Pacific and South America, it is economically
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feasible to build a small-scale LNG terminal and distribution network in remote locations than import LNG
from large-scale terminals.
Agreements and expansions in terms of building small-scale regasification and liquefaction terminals and
distributing small-scale LNG to remote locations are the key strategies adopted by industry players to
achieve growth in the small-scale LNG market. These strategies accounted for a share of 70% and 26%,
respectively, of all the growth strategies adopted by the market players. The rising demand for small-scale
LNG and the high growth in the heavy-duty transport and electric power generation applications in
developed countries encourage companies to adopt these strategies.
Market players are making heavy investments in R&D activities to suffice the needs of marine and energy
markets. The Linde Group (Germany), Wärtsilä Corporation (Finland), Honeywell International Inc. (U.S.),
General Electric (U.S.), and Engie (France) are some of the leading market players that have adopted these
strategies to develop their small-scale LNG business.
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4 PREMIUM INSIGHTS
4.1 ATTRACTIVE OPPORTUNITIES IN THE SMALL-SCALE LNG MARKET
FIGURE 8 SMALL-SCALE LNG MARKET TO WITNESS RAPID GROWTH BETWEEN
2016 AND 2021
256.5 299.2 MTPA ATTRACTIVE MARKET OPPORTUNITIES
MTPA
2021-p The global market size of small-scale LNG is
2016-e projected to reach 299.2 MTPA by 2021, at a
CAGR of 2.7% during the forecast period.
Energy cost advantage of LNG over alternate
energy sources for end users acts as a major
driver for the small-scale LNG market.
Upgrading traditional infrastructure, evolving
LNG supply/demand, reducing capital costs of
small-scale LNG projects are expected to provide
huge opportunities for the growth of the small-
scale LNG market.
Source: Secondary Sources, Expert Interviews, and MarketsandMarkets Analysis
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4.2 SMALL-SCALE LNG MARKET GROWTH, BY REGION (2016–2021)
FIGURE 9 ASIA-PACIFIC SMALL-SCALE LNG MARKET TO REGISTER THE HIGHEST CAGR
BETWEEN 2016 AND 2021
M arket Size (MTPA) 400.0 CAGR CAGR
350.0 2.7% (2016-2021)
300.0
250.0 3.2%
200.0 2.6%
150.0
100.0 3.3%
50.0 2015 2016 2.1%
0.0 Europe Asia-Pacific Middle East and Africa 1.9%
2014 2021
South America
North America
Source: Secondary Sources, Expert Interviews, and MarketsandMarkets Analysis
4.3 SMALL-SCALE LNG MARKET: MAJOR COUNTRIES VS END USERS
FIGURE 10 JAPAN ACCOUNTED FOR LARGEST SHARE OF SMALL-SCALE LNG MARKET
GLOBALLY IN 2015
SMALL-SCALE LNG MARKET SIZE,
2015= 256.5 MTPA
Heavy-Duty Vehicles Japan
Electric Power Generation U.S.
Marine Transport South Korea
15.4% 16.0% 61.1% 16.6% 14.0% 8.4%
Market Share of Top Three End Market share of Top Three
Users Globally Countries Globally
Note1: Others* include end users such as rail transport, space heating, and air conditioning, which constitute the remaining 7.5% of
the left side of petal
Note2: The other countries considered globally constitute the remaining 61.0% of the right side of petal
Source: Secondary Sources, Expert Interviews, and MarketsandMarkets Analysis
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4.4 SMALL-SCALE LNG MARKET ATTRACTIVENESS
FIGURE 11 ASIA-PACIFIC TO BE FASTEST-GROWING SMALL-SCALE LNG MARKET BETWEEN
2016 AND 2021
1.5% Norway
0.8% Canada U.K. 5.9% 3.9% Germany South
France 2.9% 8.4% Korea
Spain 6.7% 1.6% Italy
14.0% U.S. 3.4% China 16.6%Japan
5.3%
1.8% Mexico 2.6% 4.4% Kuwait 1.2% Taiwan
0.9% Colombia UAE 2.3%
Israel
India
0.5% Singapore
Brazil 5.1% Australia & 4.2%
3.2% Argentina New Zealand
Chile 1.7%
< 3.5% Market Share
3.5% - 4.5% Market Share
> 4.5% Market Share
Note: CAGR for each region is in terms of volume.
Source: Secondary Sources, Expert Interviews, and MarketsandMarkets Analysis
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4.5 SMALL-SCALE LNG MARKET, BY END USER
FIGURE 12 HEAVY-DUTY VEHICLES ACCOUNTED FOR THE LARGEST SHARE OF THE SMALL-
SCALE LNG MARKET IN ASIA-PACIFIC
Total Market Share (2015): 256.5 MTPA
100% 42.7 MTPA 61.9 MTPA 86.3 MTPA 35.0 MTPA 30.7 MTPA
90%
80% 2.7 5.8 6.5 2.3 1.9
70% 3.1 4.9 1.8 0.9
60% 5.1 28.9 7.6 2.6
50% 21.1
Market Share (%) 40% 31.8 25.2
30% 4.6 67.3
20% North America
10% 22.5 9.9
0%
Europe Asia-Pacific Middle East & Africa South America
Heavy Duty Vehicles Electric Power Generation Maritime Transport Others
Source: Secondary Research, Expert Interviews, and MarketsandMarkets Analysis
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5 MARKET OVERVIEW
KEY FINDINGS
Small-scale LNG industry has regained attractiveness due to new environmental emissions
policies and arbitrage in oil and gas prices, which have led many regions such as Asia-Pacific
and North America to began building up small-scale infrastructures.
The wide availability of LNG due to new project developments and modification of existing
regasification terminals to enable redistribution of LNG can also be contributed to the
development of small-scale LNG globally.
The major challenge related to small-scale LNG business is relatively expensive supply chain
due to the absence of economies of scale.
The growth of the small-scale LNG market is attributed to the energy cost advantage of LNG
over alternative energy sources for end users and its environmental benefits.
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5.1 INTRODUCTION
Small-scale LNG is considered as a potential fuel for small electric power generation plants on islands and
remote locations. Some of the possible locations for establishing the small-scale liquefaction and
regasification terminals are Indonesian islands, Caribbean islands, Mediterranean Islands, Philippines, and
so on. Environmental regulations to implement clean fuel instead of HFO or coal are one of the major
drivers augmenting the demand for small-scale LNG globally.
In the past few years, the small-scale LNG industry has regained attractiveness due to new environmental
emission policies and arbitrage in oil and gas prices. This, in turn, has led regions such as Asia-Pacific and
North America to start building up small-scale infrastructures. In addition, the wide availability of LNG due
to new project developments and modification of existing regasification terminals to enable redistribution
of LNG are also the factors contributing to the development of the small-scale LNG terminals globally. The
major challenge related to the small-scale LNG market is relatively expensive supply chain due to the
absence of economies of scale.
5.2 MARKET SEGMENTATION
5.2.1 MARKET SEGMENTATION, BY TYPE
Type Description
Liquefaction Terminal
Regasification Terminal The liquefaction terminal operator buys raw natural gas from a gas supplier. The
operator liquefies the gas and sells LNG to the market.
LNG cargoes are unloaded at the regasification terminal and stored in the small-scale
tanks. Regasified LNG is further utilized by consumers as a fuel.
5.2.2 MARKET SEGMENTATION, BY END USER
End user Description
Heavy Duty Vehicles
In heavy duty vehicles, LNG vehicle fuel system uses liquefied natural gas (LNG) or
Electric Power compressed natural gas (CNG) as an alternative to conventional fossil fuels such as diesel.
Generation
Natural gas has become a popular fuel for the generation of electricity due to its clean
Maritime Transport burning nature. Similarly, natural gas has become a fuel of choice for new power plants,
Others due to economic, environmental, and technological changes.
In the global shipping sector, small-scale LNG is used as a shipping fuel for LNG carriers
and passenger/freight shipping in the Baltic region.
Other end users are rail transport, space heating, air conditioning, and others.
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5.2.3 BY REGION
BY REGION
NORTH AMERICA EUROPE ASIA-PACIFIC MIIDLE EAST & AFRICA SOUTH AMERICA
Source: Secondary Research, Expert Interviews, and MarketsandMarkets Analysis
5.3 MARKET DYNAMICS
The global small-scale LNG market is expanding and is projected to witness a stagnant growth between
2016 and 2021. The growth of this market is attributed to the energy cost advantage of LNG over
alternative energy sources for end users and its environmental benefits. Factors such as upgrading
traditional infrastructure, evolving LNG supply/demand, and reducing capital costs of projects are expected
to provide huge opportunities for the growth of the small-scale LNG market. Furthermore, the market size
of small-scale LNG has increased due to the growing demand for natural gas in the Asia-Pacific region.
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FIGURE 13 DRIVERS, RESTRAINTS, OPPORTUNITIES, AND CHALLENGES IN THE SMALL-
SCALE LNG MARKET
D DRIVERS • Energy cost advantage of LNG over alternate energy sources for
end-users
• Environmental benefits
• Fiscal regime and subsidies
R CHALLENGES OPPORTUNITIES RESTRAINTS • Highly capital-intensive LNG systems and supply infrastructure
O • Evolving LNG supply/demand
• Integration of new technologies
C • Expensive Supply Chain
p
Source: Secondary Research, Expert Interviews, and MarketsandMarkets Analysis
5.3.1 DRIVERS
5.3.1.1 Energy cost advantage of LNG over alternate energy sources for
end users
Heavy duty transport companies are said to save approximately 30% on fuel costs for LNG fueled trucks,
compared to diesel, and produce 30% fewer emissions. Air pollution from diesel engines is one of the
biggest concerns, especially in areas that struggle to meet air-quality standards. On the other hand, natural
gas causes complete combustion and fewer emissions than diesel. It is estimated that the cost of diesel
vehicles is likely to increase the adoption of green diesel technologies such as natural gas. In the case of
electric power generation, natural gas engines below 150 KW are more cost effective.
Fuel cost is one of the major drivers for road transportation, which is strongly dependent on excise
taxation. For power generation, stringent emission standards such as US 2010 and Euro 6 can easily be
met with natural gas based on the engine technology. As a result, oil-fueled stationary power plants are
being replaced by small-scale LNG. Furthermore, the existing huge difference in the LNG prices in different
regions is expected to converge in the coming years, owing to the increase in the supply volume and the
expected transition to short-term contracts.
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5.3.1.2 Environmental benefits
The environmental benefits of LNG in terms of CO2, SOx, NOx, and particulate emissions are much more
significant when compared to fossil fuels such as diesel. The growth of the small-scale LNG market is
predicted mainly on the implementation of robust environmental regulations. Small-scale LNG can benefit
not only the gas production and end users (LNG for transport/power & heating generation) but also the
environment compared to alternative fossil fuels. The government mainly imposes environmental policies
or regulations, especially in emission control areas (ECA) zones. Some of the key environmental
requirements that can stimulate the development of small-scale LNG terminal globally are:
Sox scrubbers: enabling ship operators to continue using low-cost HFO
SCR deNOx systems: so that NOx requirements can be met in ECAs
LNG dual-fuel engines: flexible fuel engines which can use LNG in ECAs and also use the most
economical fuel outside ECA
Dedicated LNG engines: spark-ignition and pilot diesel injection LNG engines meeting NOx
requirements
LNG tanks systems for ships
LNG bunkering ships and other facilities
In France, small-scale LNG terminals are registered as Installation Classified for Environmental Protection
(ICPE) as requested by the code of environment, based on the capacity. Additionally, the use of LNG as a
marine bunker fuel is stimulated by the Environmental NOx-Agreement 2008–2017 in Norway.
5.3.1.3 Fiscal regime and subsidies
Small-scale LNG production projects can help to develop natural gas both as a temporarily supply or to
feed remote areas that are not connected to the main transportation grids. Therefore, the local authorities
provide attractive fiscal packages that support LNG development. Various European countries have
proposed building small-scale import terminals, supported by the EU subsidies that could be as large as
10-20% of the terminal development cost. Alternatively, more polluting fuels may be subject to higher
taxation. The MEA region relies heavily on natural gas subsidies which increase demand and improve
efficiency by keeping the price of natural gas lower than renewable energy.
5.3.2 RESTRAINTS
5.3.2.1 Highly capital-intensive LNG systems and supply infrastructure
LNG systems and supply infrastructure are more expensive than those of conventional fuels due to the
utilization of complex technologies and equipment. The small-scale LNG industry faces a constantly
changing regulatory environment. A small scale LNG carrier’s investment cost is higher per ton LNG
compared to large scale LNG vessels. According to the Oxford Institute for Energy Studies, it is estimated
that the investment cost or capital expenditure for a 215.000 m3 LNG carrier is approximately USD 250
million, for 135.000 m3 LNG carrier is approximately USD 170 million, and for a 28.000 m 3 LNG carrier is
approximately USD 80 million. This means that the capital expenditure for small-scale LNG ships is typically
in the range of 5 to 15 thousand per ton compared to the large-scale LNG ships that are typically in the
range of 2 to 5 thousand per ton. The operational expenditures of small scale LNG carriers are also higher
per ton LNG per mile compared to large scale LNG vessels.
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5.3.3 OPPORTUNITIES
5.3.3.1 Evolving LNG supply/demand
Natural gas is a leading fuel of choice and LNG is a significant component of the natural gas supply chain.
In the U.S., shale gas supply development and the country’s transition from a net importer to a net exporter
of energy has created a game changing market shift. Currently, an excess of LNG supply exists on the order
of 100 MTPA. This excess supply has created unutilized capacities, and large imbalance in the supply
chain that is expected to grow as more LNG projects will be commissioned in the coming years. This excess
gas supply is shaping the picture of global LNG supply and trade.
In the countries such as the U.S. and Canada, several LNG receiving and regasification terminals were built
and never utilized or brought on-stream. Some of these terminals are being converted to liquefaction
terminals for LNG export. The majority of the natural gas in North America is being exported to Asia-Pacific,
South America, and Europe. This growth is being further facilitated by the opening of a parallel Panama
Canal branch, which will lower shipping costs to Asia.
5.3.3.2 Integration of new technologies
For small-scale LNG terminals, tremendous opportunities exist to reduce costs in the critical areas of the
value chain. For instance, prefabricated tanks can be used in small-scale facilities instead of large capacity
storage tanks. Small-scale LNG terminals can also replace atmospheric storage tanks with pressurized
storage tanks. Pressurized storage tanks are available off-the-shelf from multiple suppliers in increments
of 1,000 m3, which are suitable for small-scale LNG terminals.
One of the major advantages of pressurized storage tanks is boil-off gas (BOG) handling. For small-scale
LNG terminals, the generated BOG is put directly into the gas pipeline or into electricity generation to
supplement utilities. The BOG handling cost can be considerably reduced in small-scale LNG terminals, by
allowing the pressure to increase in the storage tanks. Subsequently, the high-pressure gas can be put into
the pipeline or burned for auxiliary power generation. Unlike conventional LNG terminals, LNG vaporization
for small-scale LNG terminals can be simply executed with an atmospheric vaporizer using ambient air.
This technology has been available in nitrogen facilities for many years.
5.3.4 CHALLENGES
5.3.4.1 Expensive supply chain
The challenge related to the small-scale LNG business is a relatively expensive supply chain due to the
absence of economies of scale. However, small-scale LNG terminal is increasingly becoming the preferred
delivery method for LNG, as LNG can be produced in remote areas and distributed to end users located at
remote locations conveniently. The supply chain can rather be expensive due to the relatively small size of
the small-scale LNG market and diseconomy of this business. As technology solutions such as small-scale
LNG mature, competitiveness, standardization, and modularization in the natural gas industry are expected
to increase.
Distribution of natural gas in remote areas can only become feasible with a complete development of
supply chain, from production to end users. Therefore, the challenge is to operate and design all elements
within such a supply chain effectively and competitively. As a result, the development of cost-effective,
modularized, and standardized supply networks is crucial to overcome this challenge.
39
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5.4 IMPACT ANALYSIS
FIGURE 14 FACTORS INFLUENCING SHORT TERM, MIDTERM, AND LONG TERM SCENARIOS
HIGH Energy cost
advantage of LNG
over alternate Implementation of Evolving LNG
supply/demand
MARKET DRIVERS energy sources for Environmental economic Fiscal regime and
markets
IMPACT end users benefits incentives subsidies
LOW SHORT TERM MEDIUM TERM LONG TERM
MARKET RESTRAINTS Highly capital intensive
LNG Systems and
IMPACT
Supply Infrastructure
HIGH
Source: Secondary Research, Expert Interviews, and MarketsandMarkets Analysis
5.4.1 SHORT-TERM SCENARIOS
The total small-scale LNG production capacity installed is expected to be 248.9 MTPA by 2017, with
approximately 100 small-scale LNG liquefaction terminals globally. This is approximately 5% of the global
conventional LNG production. Currently, there are 24 LNG carriers in operation with less than 30,000 m3
cargo capacity globally, and the order book is filled with 14 new small-scale LNG carriers. The total number
of regasification terminals is in thousands, mainly located in Japan, Turkey, Spain, and Northern Europe.
The small-scale LNG wholesale and retail has been dominated by players such as Linde AG (Germany),
Wärtsilä Corporation (Finland), Honeywell International Inc (U.S.), General Electric (U.S.), and Engie
(France).
5.4.2 MIDTERM SCENARIOS
The small-scale LNG market is expected to continue expanding toward 2021, with a 30 MTPA business in
addition to conventional small-scale LNG production capacities globally. The growth is predicted on the
implementation of economic incentives and robust environmental regulations, and on the sustainability of
a competitive price difference between natural gas and oil. The development of downstream infrastructure
and logistics, remote regasification terminals, bunkering, and trucking stations are some of the key factors
which are projected to drive the market for small-scale LNG terminals between 2016 and 2021.
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5.4.3 LONG-TERM SCENARIOS
Governments and multinational entities are putting in place a comprehensive legal framework and fiscal
regime for the expansion of the small-scale LNG industry in the coming decade. This allows for the
construction of basic infrastructure in accordance with the best technologies available and consequently
assuring an environment favorable to small-scale LNG investment. Specific standards for training and
certification accreditation mechanisms are expected to be developed for the personnel working in small-
scale LNG facilities. Furthermore, technical development across the value chain is necessary to minimize
costs and to make the small-scale LNG industry more competitive and resistant to oil price fluctuations in
the coming decades.
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6 INDUSTRY TRENDS
6.1 INTRODUCTION
The movement of LNG by small-scale carriers is an emerging phase of the LNG value chain and is served
by a fleet of tankers. Small-scale LNG carrier’s capacity ranges between 500 m3 and 12,000 m3, and the
cargo tank of small LNG carriers can have a membrane, prismatic, and spherical structures. Materials
used for these cargo tanks can be aluminum, plywood, balsa wood, stainless steel, invar or nickel steel,
with perlite and polyurethane foam. Small-scale LNG carriers can deliver cargoes to ports that are near to
the end users and cover a wide range of market requirements. Small-scale LNG carriers are also expected
to meet air emission targets set by national, regional, and international regulatory authorities, especially to
the scope of greenhouse gas emission limitations.
Small-scale LNG carriers can operate within the value chain in a comparatively uncomplicated way, serving
natural gas to end users for whom pipeline access is uneconomical. Additionally, these carriers can enable
natural gas producers to monetize stranded gas, and therefore exploit natural gas fields, which are too
small for conventional large-scale LNG terminals.
6.2 VALUE-CHAIN ANALYSIS
The value-chain for small-scale LNG describes the entities involved in various stages of natural gas supply
to the end users. The value chain shows the value added to the product at each stage of production before
it is finally utilized by the end users. It also summarizes the deliverables these entities produce and
explains their relationship with the preceding and succeeding entities across the entire value chain.
FIGURE 15 SMALL-SCALE LNG: VALUE-CHAIN ANALYSIS
Contributes major value
addition to retail price of
natural gas
Gas Supply Liquefaction Regasification End-customer
Upstream Midstream Downstream
• Processing • Regasification • Distribution
• Production • Shipping • Power
consumption
• Industrial
consumption
• Transport fuel
Source: Secondary Literature, Expert Interviews, and MarketsandMarkets Analysis 42
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SMALL-SCALE LNG MARKET - GLOBAL FORECAST TO 2021
Natural gas is produced at the wellhead and transported locally through pipeline systems from gas fields to
the liquefaction plant and terminal. In the liquefaction process, natural gas is cooled to -161°C, at which
natural gas becomes a liquid due to atmospheric pressure. The resulting liquefied natural gas (LNG) is
stored in cryogenic tanks before shipping. LNG is received in aboard tankers where it is cryogenically
stored and is transported overseas to import terminals. LNG is further regasified for use in local markets.
In the small-scale LNG market, cryogenically capable trucks, rail cars or barges are used to transport LNG.
At regasification terminals, LNG is received and cryogenically stored in the liquid phase. The LNG is then
warmed, or vaporized, and the resulting natural gas is injected into pipeline systems for delivered to end
users. In small-scale LNG value chain, buyers and traders undertake and safeguard LNG trading activities
to move LNG to end users in required volumes at economical commercial terms. Traders participate in
both financial and physical trading to enhance LNG movements and minimize commercial risks.
6.3 PORTER’S FIVE FORCES ANALYSIS
The competitive environment of the market is represented through Porter’s Five Forces Analysis. This
model is used to analyze the presence of players, suppliers, consumers, competitors, and new entrants in
the small-scale LNG market.
THREAT OF
SUBSTITUTES
(MEDIUM)
BARGAINING POWER INTENSITY OF BARGAINING POWER
OF SUPPLIERS COMPETITIVE OF BUYERS
(HIGH) RIVALRY (LOW)
(HIGH)
THREAT OF
NEW ENTRANTS
(HIGH)
Source: Secondary Literature, Expert Interviews, and MarketsandMarkets Analysis
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6.3.1 THREAT OF NEW ENTRANTS
The small-scale LNG industry is characterized by high entry barriers THREAT OF NEW ENTRANTS
on account of huge capital investment, economies of scale, and (HIGH)
extensive distribution channels. The threat of new entities entering
the LNG industry is insignificant, despite the attractiveness of the • Huge capital investment
industry. Huge capital requirements are associated with the • Economies of scale
activities performed by small-scale LNG producers, most of which • Distribution channels
are vertically positioned in almost all upstream, midstream, and • No product differentiation
downstream activities. Enormous fixed up-front investments are
required to set-up small-scale LNG production facilities.
Due to the increased unit costs in the exploration and production
of natural gas, only major LNG producers who can take advantage of economies of scale can survive. Thus,
the threat of new entrants in the small scale LNG market is high.
6.3.2 THREAT OF SUBSTITUTES
Natural gas has an advantage over diesel in terms of
environmental benefits and safety impacts. As exploration and THREAT OF SUBSTITUTES
production technology is getting more sophisticated, which is going (MEDIUM)
to outperform rising depletion costs, natural gas is likely to be one • Availability of substitutes
of the cheapest sources of energy in the coming years. Substitutes such as coal, renewable
of natural gas, though, become a threat when the price of natural energy, and nuclear energy
gas increases significantly. The most used substitute fuels are
coal, renewable energy (the wind, solar, bio-fuels, hydro-power, and • Significant market share in
tidal energy), and nuclear energy. Natural gas is expected to have a the industrial, residential, and
commercial sectors
higher growth rate than oil, based on the Energy Information
Administration. It is projected that the natural gas is going to gain
significant market share in the industrial, residential, and commercial sectors.
The costs of exploiting and using coal are only going to rise in the upcoming years, due to environmental
regulations, such as the Kyoto Protocol. On the other hand, renewable energies such as the wind and hydro
power or hydrogen are expected to increase their market share in the coming years. However, without
major proactive governmental policies, adoption of renewable energies on a large scale is going to be
rather slow. Thus, the threat of substitutes in the small scale LNG market is medium.
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6.3.3 BARGAINING POWER OF SUPPLIERS
Major LNG producers have a complex chain of suppliers ranging
from suppliers of natural gas from fields to suppliers of BARGAINING POWER OF
engineering, pipeline installations, field development SUPPLIERS (HIGH)
management, specific equipment and materials, and even • Complex chain of suppliers
scientific researchers and engineers. Additionally, there is less
number of suppliers in the small-scale LNG market as compared to • Significant bargaining powers
the number of buyers, as there are few countries such as Qatar owned by countries such as
Qatar and Indonesia
holding both operational and untapped natural gas reserves.
Similarly, forward integration is possible by the natural gas
suppliers such as Royal Dutch Shell plc, to liquefy natural gas by
itself and export it to the end users globally. Natural gas producing
countries such as Qatar and Indonesia own significant bargaining power in the small-scale LNG industry.
Stringent policies in these countries can, in fact, make small-scale LNG producers go out of business as
companies experience drying out of natural gas reserves. Thus, bargaining power of suppliers in the small
scale LNG market is high.
6.3.4 BARGAINING POWER OF BUYERS
Buyers can influence the profitability of the industry, as they can
bid down prices and demand higher quality by bargaining among BARGAINING POWER OF BUYERS
competitors. However, the small-scale LNG industry is a specific (LOW)
one where the price of natural gas is determined on a global level,
based on the economic relationship between global demand and • Buyers to influence the
profitability of the industry
supply of natural gas. Natural gas is traded over-the-counter • Natural gas price determined
between two parties at the global price. Buyers of natural gas on a global level
include major LNG producers, marketers, distributors, and traders.
Countries themselves can also be buyers. Large consumers such
as the U.S., China, and Japan, can be in a position to exert some
degree of bargaining power, through different volumes of demand.
Thus, bargaining power of buyers in the small scale LNG market is low, owing to the price standardization
in the small-scale LNG industry.
6.3.5 INTENSITY OF COMPETITIVE RIVALRY
The small-scale LNG industry is fragmented and comprises many
market participants. The key players in the market include INTENSITY OF COMPETITIVE
companies such as The Linde Group (Germany), Wärtsilä RIVALRY (HIGH)
Corporation (Finland), Honeywell International Inc. (U.S.), General • Few leading small-scale LNG
Electric (U.S.), and Engie (France). The competitive environment in producers
the small-scale LNG industry can be described as having few major • Customer do not easily switch
and strong players and several smaller players with less power.
High exit barriers keep the firms in the small-scale LNG industry between suppliers due to
brand loyalty
engaged in spite of below average or negative rates of return.
Likewise, high fixed costs and lack of product differentiation are
some of the factors contributing to the rivalry among competitors
in the small-scale LNG industry. Thus, the intensity of competitive rivalry in the small scale LNG market is
high.
45
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6.4 MACROECONOMIC OVERVIEW
6.4.1 INTRODUCTION
This section includes macroeconomic factors which directly or indirectly influence the small-scale LNG
market. Macroeconomic indicators are economic statistics that are periodically published by private and
government organizations. These indicators provide insight of the economic performance of a specific
region or country and have a noteworthy influence on the Forex market.
6.4.2 LNG EXPORTS
In 2015, only 17 countries exported LNG down from 19 in 2014. This is owing to the postponement in
exports from Egypt and Angola, which were shut down for repair work and feedstock loss. In 2015, several
new plants started up which helped to increase total LNG trade by 4.7 MTPA, despite the decrease in a
number of exporting countries. In total, new plants added 6.0 MTPA to the LNG market in 2015, which
were delivered to Asia-Pacific and the Middle East & Africa. In 2016, Qatar maintained its status as the
largest LNG exporter with exports of 77.8 MTPA. In 2015, Australia surpassed Malaysia to become the
second-largest exporter globally, at 29.4 MT. Although both countries have multiple new LNG liquefaction
projects under construction, liquefaction projects in Australia are greater in both number and capacity.
Malaysia has three projects under construction, with a capacity of 6.3 MTPA, whereas the capacity of
liquefaction projects in Australia is of 46 MTPA.
FIGURE 16 LNG EXPORTS AND MARKET SHARE BY COUNTRY (MTPA), 2015
13% 32% Qat ar
3% 12% Aus tralia
5% Malaysia
5% Nigeria
5% In donesia
Trinidad
7% Algeria
8% Rus sia
10% Oman
Ot hers
Note: Others include countries such as Canada, Norway, Netherlands, U.S., Egypt, and Germany.
Source: Oxford Economics and MarketsandMarkets Analysis
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6.4.3 LNG IMPORTS
In 2015, the number of importers grew as four new markets took in LNG cargoes, in contrast to the
declining number of exporters. Although Asia-Pacific is still the largest market as of 2015 at 139.8 MTPA, it
also showed the biggest decline, falling by 5.1 MTPA to 57% of LNG consumption globally. Japan is
currently the largest market globally, followed by South Korea and Taiwan. In 2015, China, India, and
Pakistan imported a combined capacity of 35.6 MTPA, which accounted for almost 15% of the global LNG
trade. LNG imports in Europe stood at 37.5 MTPA, which showed an increase by 4.6 MTPA from 2014 as
re-export activity slowed. Jordan added nearly 1.8 MTPA of new imports in 2015 in the global LNG market,
owing to its gas shortage as well as that of neighboring Egypt. Importing countries such as Kuwait and the
UAE also had significant incremental growth that added nearly 0.8 MTPA, as they capitalized on lower
import prices to feed growing demand.
FIGURE 17 LNG IMPORTS AND MARKET SHARE BY COUNTRY (MTPA), 2015
17% Japan
South Korea
2% 8% 34% China
222%%% 13% In dia
4% Ta iwan
UK
4% Spain
Tu rk ey
6% Bra zil
6% Mexic o
Franc e
Ot hers
Note: Others include countries such as Germany, Italy, U.S., Russia, Ukraine, Netherlands, Canada, and Belgium.
Source: Oxford Economics and MarketsandMarkets Analysis
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7 SMALL-SCALE LNG MARKET, BY TYPE (SUPPLY SIDE)
KEY FINDINGS
Regasification terminals dominated the market with a share of 75.0% in 2015.
Increasing demand of LNG from the remote locations and global commoditization of LNG are
some of the major factors that are driving the demand for LNG from small-scale regasification
terminals.
Proposed small-scale liquefaction capacity has expanded dramatically and totaled to 62.2
MTPA in 2015.
The development of small-scale LNG technology is a key driver of the small-scale LNG market,
as more efficient and cost-effective small-scale liquefaction processes are being developed.
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7.1 INTRODUCTION
The global small-scale LNG market is segmented on the basis of type into liquefaction terminal and
regasification terminal. The small-scale LNG market has emerged in the recent years. New liquefaction and
distribution facilities are being constructed and operated across the globe. The development and
optimization of a wide range of processes and equipment helped to counter the diseconomy and reduce
initial investment costs associated with small-scale LNG. For instance, the use of pressurized LNG tanks
for storing small parcels of LNG is a more cost effective means, compared to the atmospheric flat bottom
tanks.
The small-scale LNG technology is a key driver of the market, as more efficient and cost-effective small-
scale liquefaction processes are being developed. Additionally, gas engine technology is rapidly developing
for the use of LNG as a transport fuel. Furthermore, significant small-scale LNG import and regasification
facilities are already present in the countries such as China, Japan, Portugal, Turkey, and Norway.
FIGURE 18 REGASIFICATION TERMINAL TO DOMINATE SMALL-SCALE LNG MARKET BETWEEN
2016 AND 2021
250.0
M arket Size (MTPA) 200.0
150.0
100.0
50.0
0.0 Regasification Terminal Liquefaction Terminal
186.1 62.8
2016 207.4 87.1
2021
Source: Related Research Publications, Government Publications, Expert Interviews, and MarketsandMarkets Analysis
TABLE 1 SMALL-SCALE LNG MARKET SIZE, BY TYPE 2014–2021 (MTPA)
Type 2014 2015 2016 2017 2018 2019 2020 2021
58.5 62.2 62.8 62.8 62.8 62.8 86.6 87.1
Liquefaction 173.9 186.1 186.1 186.1 186.1 186.1 205.4 205.4
Terminal 232.3 248.3 248.9 248.9 248.9 248.9 292.0 292.5
Regasification
Terminal
Total
Source: Related Research Publications, Government Publications, Expert Interviews, and MarketsandMarkets Analysis
Regasification terminal dominated the market, with a share of 72.5% in 2015. Increasing demand of LNG
from the remote locations and global commoditization of LNG, are some of the major factors that are
driving the demand for LNG from small-scale regasification terminals. Similarly, the development of
downstream infrastructure and logistics, remote regasification terminals, trucking station, and bunkering
are some of the key factors for building up a robust market for small-scale LNG.
49
April 2017 © MarketsandMarkets
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