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The IEA sees LNG supply, demand and investment all growing. But the factors required for the development of a truly ‘global’ gas price will remain unsatisfied.
Recently-finalized plans to build a 2,500km-plus pipeline connecting Russian gas resources to the Chinese market have brought gas transportation costs – which typically run 700-1,000% higher than those for oil – into the spotlight.
If gas is to be transported over very long distances, and where a seaborne route is feasible, the economics favor LNG over pipelines.
The IEA says in its recently published World Energy Investment Outlook that cumulative spending on LNG through 2035 will be $735bn (out of a total of $2.6 trillion needed for gas transportation), with $640bn set to be spent on liquefaction and regasification and about $90bn on LNG tankers (see chart). Global LNG trade will rise from 330 bn cu ms of gas in 2013 to 560 bn cu ms in 2035.
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