The LNG industry in 2008 witnessed some remarkable developments including the emergence of new import markets in Brazil and Argentina as well as a renewed push to develop new supply sources such as coal bed methane in Australia and new markets such as Papua New Guinea and Venezuela.

LNG flow optimization was an important aspect of LNG trading activity in 2008, as players attempted to rationalize and realign LNG trade movements.  LNG buyers and sellers alike tried to balance their seasonal swing and capitalize on arbitrage opportunities between regions. Contractual volumes destined for Europe were redirected to Asia as some players regained control over destination flexibility to arbitrage between continental spot prices and international LNG prices.

An average of 23 Bcf/d of LNG was delivered to markets during the year, a 0.8% increase over 2007. Only 0.58 Bcf/d of new LNG liquefaction capacity was brought into operation in 2008 but about 9 production trains or more than 6 Bcf/d of capacity is expected to come on stream in 2009. An additional 2.7 Bcf/d of liquefaction capacity is currently under construction and scheduled to be brought into service by the end of 2010.

In 2008, North American LNG imports averaged 1.47 Bcf/d, a 42% drop versus 2007. Nuclear outages in Asia and LNG supply disruptions in Nigeria and Algeria, directly impacted utilization in North America, where imports dropped to 1.04 Bcf/d in November and peaked in August at around 1.8 Bcf/d. Imports in 2007 averaged 2.5 Bcf/d and peaked in April at about 3.9 Bcf/d, due to a more ample supply situation, which illustrates the importance of the North American market in balancing the global market.

Up to 9 Bcf/d of new liquefaction capacity is expected to come on line by the end of 2010, creating a substantial LNG supply push. Flexibility, optionality, and access to infrastructure will continue to be the key enabler of the North American market to be the buyer that allows for global balancing.