Date – 22 / 05 / 2024

LNG Trade in the Atlantic Basin:

Situation and perspectives

By Eloy Álvarez Pelegry[1] and Macarena Larrea Basterra[2]

In 1959, the first Liquefied Natural Gas (LNG) cargo was shipped from Lake Charles, Louisiana (US) to Canvey Island in the UK[1]. This can be considered the beginning of the development of the sector. However it is not until 1964 when the first commercial cargo of LNG was shipped from Arzew (Algeria) to Canvey Island (UK) (BG Group, 2014). Since then natural gas trade has made enormous progress in terms of volume of transport.

Worldwide the total volume of traded gas has grown from 4.4% of production in 1970 to nearly 30% in 2015. LNG has increased continuously its share in the volume of total traded gas, from 5.9% in 1970 to 21.4% in 1999 and to 31.1% in 2015, as well as its share of total gas production from practically nonexistent in 1970 to 9% currently.

Curiously, as mentioned LNG trade began in the Atlantic Basin, but later this area lost importance in global terms. However nowadays the dramatic increase in shale gas production in the US and the increasing needs of gas imports in Europe have revitalized trade and commerce in the Atlantic Basin, especially in the North.

In this sense in February 2016, US LNG exports started with the first cargo from Sabine Pass liquefaction plant (Cheniere) to Brazil. Four other liquefaction plants are currently under construction in the US that in 2020 could become the third largest exporter in the world after Australia and Qatar (Cornot-Gandolphe, 2016).

Furthermore the production and LNG exports from Africa (mainly from the Gulf of Guinea) and the Caribbean (Trinidad and Tobago) and the regasification projects with the corresponding gas imports in Latin America (Colombia and Brazil with floating storage and regasification units [FSRU] and Argentina) have also made significant contributions to the trade in the Atlantic Basin. The above mentioned elements stress the increasing role of the Atlantic Basin.

[1] The world’s first LNG tanker, The Methane Pioneer, a converted World War II liberty freighter built in 1945, carried 5,000 cubic meters of LNG in five 7,000 bbl aluminum prismatic tanks (BG Group, 2014).

[1] Member of the Spanish Royal Academy of Engineering.

[2] Deusto Business School, Universidad de Deusto, Av. de las Universidades, 24, 48007, Bilbao. 

Orkestra-Fundación Deusto, Av. de las Universidades, 24, 48007, Bilbao.

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