Out of just over 55 MMT/Y of new LNG production previously was scheduled to become available in 2008 only a third is expected to make it to market before the end of the year, while two-thirds (i.e. Qatargas' train 4: 7.8 MMT/Y, Rasgas' train 6: 7.8 MMT/Y, Sakhalin LNG: 9 MMT/Y, Yemen LNG: 6.7 MMT/Y, Tangguh LNG: 7.6 MMT/Y) is unlikely to reach commercial levels of production until 2009.

Of the current liquefaction capacity in the world, 86% is committed to a specific destination and 14% is flexible.

Chiyoda, a major LNG facilities constructor reported a net profit of $150 million for the first nine months of the April 2007-March 2008 fiscal year, a 4.8% decrease year on year. The company partly attributed the dip to falling productivity related to a shortage of skilled engineers, particularly in the Middle East.

In Jan. 2008, Technip announced that it was recording a charge of €200 million on its 2007 fourth quarter results, citing execution problems at the Qatargas 2 project. The move suggests further delays in the implementation of the project and the subsequent LNG projects in Qatar. Technip posted a 2007 fourth quarter loss of € 97.5 million compared with a profit of € 63 million a year earlier and annual profits dropped 37 percent because of “unpredictable cost escalation and a severe shortage of resources” affecting the contractor's projects in Qatar i.e. the Qatargas II, RasGas III, and Qatargas III&IV projects.

In Feb. 2008, CERA cut projected U.S. imports from 3.2 BCF/D as of last fall to 2.6 BCF/D. The 18.75% reduction in CERA's previous forecast is concurrent with EIA's 16% downward adjustment of the US LNG import outlook. However, CERA and EIA have reported that the US could set another record for LNG imports in 2008 and CERA still expects the US LNG imports will increase in the long run, reaching 13.5 BCF/D by 2015.

In Feb. 2008, EIA anticipated that Henry Hub spot gas prices would average $8.18/MCF in the first quarter, 10% more than the $7.41/MCF average price during last year’s first quarter. EIA has predicted that full-year spot price average of $7.83/MCF, up a nickel from its month-ago forecast. EIA forecasted that US LNG imports would total to just over 16 MMT, the equivalent of 788 BCF this year, because of competition for diverted cargoes from Europe and Asia and delays in new liquefaction projects coming on stream. That estimate is down sharply from more than 19 MTPA (937 BCF) LNG imports the agency forecast in its last year report. The 2008 rise in LNG imports is now expected to be a more conservative 1.8 percent.

In Feb. 2008, American Terminal Survey (NATS) reported that overall LNG imports in countries of the Atlantic Basin in 2007 (except Italy and Portugal) were up 15% over 2006. The US imported 17.1% of the Atlantic Basin volume. Spain remains the largest LNG importer in the Atlantic Basin with 44.5% of all the imports. Trinidad and Tobago, with 58.5% of market share, remain the largest single country of origin for US LNG imports. Egypt and Nigeria were close seconds. However Trinidad and Tobago was the most costly source of supply. The least costly LNG came from Equatorial Guinea, a new entrant into the LNG supply picture in 2007. Some 8.2 BCF/D (62.5 MMT/Y) of new North American regasification capacity come on stream this year, and another 3.8 BCF/D will come in 2009.

In May 2008, GLNGI researches show that technical failures in the Snohvit project, delays at the Tangguh project start up and feed-gas shortages in the Nigerian LNG will cause supply shortage in this year and even in the first quarter of 2009. Snohvit project has been running at only 55% of its installed capacity since its commissioning in 2007 and StatoilHydo revealed that it is now shut for another two months for maintenance. The maintenance duration may be extended for one year, industry sources predicted.  NLNG plant's train 6 which was commissioned in 2007 has not started its commercial operation due to feed-gas shortages at the end of May 2008.

In June 2008, the US EIA reports in its Short-Term Energy Outlook that LNG imports to the US in 2008 are expected to total about 530 BCF, a decline of about 240 BCF from the 2007 total.  However, in 2009, LNG imports are expected to reach about 850 BCF as new liquefaction capacity increases world supply. Rising oil prices, flagging LNG imports and a gas storage inventory deficit continue to force US gas prices higher, EIA reported. The agency raised its 2008 gas price estimates, projecting that spot prices would average about $11/MCF for all of 2008, up $1.30/MCF, or 13.3%, from the previous month’s projection and about $3/MCF higher than the actual 2007 average.

In June 2008, Waterborne Energy predicted a staggering fall in the US LNG imports in 2008. Two of the factors contributing to this situation are demand spikes in Spain and Japan. Spain has been suffering from a long drought that has dried up much of its hydroelectric power while, in Japan, a prominent nuclear power plant has been shut down for a prolonged length of time. Delays to LNG projects in Russia, Qatar, Yemen, Nigeria, Norway and Australia have also strangled supply. This year, LNG imports will not exceed 420 BCF, Waterborne reported.

In June 2008, the US investment bank Goldman Sachs, predicted that demand spikes in South Korea and Spain will keep LNG deliveries in the US low, which will be bullish to US gas prices. The bank's analysts,  Samantha Dart and Jeffery Currie expect Henry Hub prices to average $12.80/MMBTU during the summer and peak at $13.80/MMBTU during coming winter--before falling back to $10/MMBTU in June 2009 because the Asian and European markets pulls US prices up. "Both Mexico and the US showed declines in LNG imports earlier this year relative to our expectations," analysts said. "Going forward, we believe this will still be the case, as the drivers underlying the stronger than expected global demand for natural gas, such as the vulnerability of non-OECD Asia's power infrastructure and rapidly increasing oil prices, will continue in the medium term," Goldman said.

In June 2008, president of the American Bureau of Shipping (ABS) , Patrick Chaney said there is a peak in LNG ships deliveries in 2008 and 2009, with more than 100 new ships set to be delivered and added to the world's fleet. Some of those vessels would likely be idle for at least several years until a number of planned liquefaction projects are completed. "We expect to see about 20 new vessels annually going into 2015 and by 2017 the number of LNG carriers worldwide would reach 535 ships, almost double from the existing fleet size of about 276.

On 15 Aug. 2008, Bloomberg reported that LNG prices in Asia may climb about 80% this year as new projects get delayed and some exporting countries like Indonesia and Egypt have reduced their exports. LNG price may rise to as much as $25/MMBTU in the Northern Hemisphere winter. Production at Russian Sakhalin LNG, Yemen LNG and Indonesian Tangguh LNG, with a combined capacity of about 24 MMT/Y, will be delayed until next year instead of starting in the second half. Supplies will be limited just as South Korea increases imports 3.5 percent and Japan boosts purchases after an earthquake shut down its largest nuclear plant.

According to the EIA's short-term energy outlook (published in September 2008):

• The LNG deliveries to the US are expected to be about 350 BCF, or 6.8 MMT in 2008, a decline of more than 50% from last year. In the next year, LNG imports are expected to rise to about 8.7 MMT, as new global LNG supply is added to the market.

• Total US marketed natural gas production is expected to increase by 7.8 percent in 2008 and by 3.8 percent in 2009. 

• Total US natural gas consumption is expected to increase by 2.7 percent in 2008 and by 2.2 percent in 2009.

• The Henry Hub spot price is expected to average about $9.71/MMBTU in 2008 and $8.55/MMBTU in 2009, a decline of $0.33 and $0.46, respectively, from the agency's previous forecast.

According to the IEA's 2008 review of natural gas markets (Published in September 2008):

• Uncertainty over investment, rising costs and project delays continue to be a threat to long-term security of supply in the world's natural gas markets. The report warns of insufficient investment, particularly in the years beyond 2010.

• Project delays were being caused by an escalation in the EPC costs, the tightness of the engineering market and risks in producing countries.

• Demand for gas is growing, particularly for electricity generation, in both OECD and non-OECD countries – despite rising prices.

• The last 18 months have been tumultuous for natural gas markets, with gas prices high and volatile in all regional markets. Prices in all regional markets continued to rise in 2007 and the first half of 2008, because of higher oil prices, weather conditions, and supply and demand imbalances.

• In the US, gas rose to more than $7/MMBTU in 2007, and looks set to average around $10/MMBTU this year, even with the recent sharp price falls. In the UK, after a period of low gas prices last year, is now seeing prices well above $10/MMBTU. In the Pacific, spot prices are more than $15/MMBTU for LNG cargoes.”

According to the EIA's short-term energy outlook (published in October 2008):

• EIA lowered its forecast for the US natural gas production and consumption growth in 2008. It expected that U.S. marketed natural gas production this year to rise 3.7 BCF/D to 58.91 BCF/D, up 6.7% from last year but down from a 7.8% gain in its previous forecast. It expected domestic consumption this year to increase by about 1.53 BCF/D, or 2.4%, to 64.69 BCF/D, down from the 1.7 BCF/D gain forecast last month.

• EIA said the US LNG imports have been reduced this year because demand growth in Europe and Asia combined with limited global supply increases to date continue to weigh on the market. For the year, the LNG imports are expected to fall more than 50% to about 350 BCF. The US LNG imports hit a record high 770 BCF in 2007.

• EIA projecting Henry Hub spot prices to average $9.67/MCF this year and $8.17/MCF in 2009.

On 8 Oct. 2008, FACTS Global Energy reported that:

• Global liquefaction capacity in the first half of the year increased just 1.9% in compared to the same period in 2007, to 87.8 MMT/Y as major projects were delayed but those and other projects should come online by the middle of next year, providing about 40 MMT/Y of new capacity and making it easier for buyers to procure spot and short-term cargoes in the near term.
• The majority of projects originally slated to come online this year would come online next year. Those include Tangguh, Sakhalin 2, Yemen LNG, Qatargas 2’s train 2 and RasGas 3’s train 1.
• Asia had the largest year-on-year growth in absolute volumes, importing 59.9 MMT in the first half, 9% more than the 54.9 MMT it imported in the first half of last year. Japan, the world’s largest LNG market, showed solid demand growth as imports increased 6% to 34.7 MMT in the first half, while China posted the largest growth in imports in the Asia region, up 51.1% to 1.5 MMT due to greater spot purchases ahead of the Olympic Games.
• For the first half of the year, the largest growth in LNG production occurred in the Atlantic Basin, primarily because the Equatorial Guinea LNG plant came online about mid-2007. The Atlantic Basin produced 32.4 MMT in the first half, 6.2% more than the 30.5 MMT it produced in the same period last year.
• Production in the Middle East has increased 1.6% on the year to 22.3 MMT. Qatar produced 0.7 MMT more on the year, but that gain was offset by decreased production in Abu Dhabi and Oman, which also face feed gas shortages.
• LNG production in the Pacific Basin decreased 1.7% on the year to 33.1 MMT, primarily because of less production in Malaysia and Australia.

On 12 Dec. 2008, Andy Flower said that the world LNG production rose just 0.4% in the first nine months of 2008 compared with a year earlier and the production may increase at the slowest pace in 28 years because of equipment breakdowns, reduced gas supplies and delays in new projects. This year’s output growth may be less than 2%. This is the lowest since 1980-81 when LNG output fell after the collapse of Algeria-US LNG trade,” Flower said. Growth in LNG trade has slowed after expanding 7.3% last year because of technical problems in Algeria and Norway, limited gas supplies to feed liquefaction plants in Nigeria and Egypt, and the delayed commissioning of new ventures in Qatar, Russia and Yemen. The global recession may also cut LNG demand as it curtails electricity use in Asia. “The crisis may weaken demand and slow project approvals,” Flower said. The annual increase may suffice to meet yearly demand from South Korea, the world’s No. 2 importer of the fuel, he said. Asia increased imports of the fuel from the Atlantic Ocean area by 7 MMT in the first nine months of 2008 to about 11.2 MMT, Flower said. Shipments to Asia from the Atlantic Basin including Nigeria, Algeria, Equatorial Guinea and Egypt may fall in the fourth quarter to about 2.5 MMT after a cooler summer damped demand and inventories increased in South Korea and Japan, the world’s top LNG importer, he said.

On 17 Dec. 2008, OGJ quoted IHS Inc. and CERA as reported in their most recent upstream capital costs index (UCCI) and downstream capital costs index (DCCI) that despite the global recession, construction costs for upstream oil and gas facilities have reached a record high, as have those for the design and construction of refining and petrochemical projects. Continued high activity levels and tightness in the upstream services and equipment markets across the board led upstream costs to increase 9.2% in the past 6 months—a rate 3.2% higher than the previous 6 months. The latest increase raised the IHS-CERA UCCI to 230 points from its previous high of 210 (in 2000). Driven by high demand and escalating fuel prices, cost increases reached even higher points during July and August, but have moderated as of the end of the third quarter. Of the seven localities tracked by the IHS-CERA UCCI, Asia, Russia, South America, and Africa saw the highest levels of cost change, registering increases of 11.8%, 10.3%, 10.3%, and 10.1%, respectively. The DCCI rose to 187 points from 176 over the past 6 months—an increase of 6%. The values are indexed to the year 2000, and the index has risen 87% since then, meaning that a project that cost $100 in 2000 would cost $187 today. "While some markets had significant increases, engineering and project management and labour both showed only small increases in the past 6 months, with any local inflation being offset by the recent strengthening of the US dollar." Of the 18 localities tracked by the DCCI, China and the US Gulf Coast saw the highest levels of cost change in the past 6 months, registering increases of 8.5% and 7.9%, respectively. "Although the current credit crisis did little to slow construction costs this period, we expect growing credit issues and slower global growth to lead to lower costs for constructing downstream projects in the next period," CERA said. "Credit issues will almost certainly have a growing and noticeable impact on future general construction activity in the United States and other regions."

On 19 Dec. 2008, Waterborne Energy president, Steve Johnson, said that the US LNG import volumes hit a five-year low in 2008, averaging only about 950 MMCF/D, due to delays in global liquefaction projects and production plant outages combined with sharp increases in Asian and European demand, Johnson said. Global production of LNG will decline this year compared to 2007, after nearly 30 years of continual growth. The last fall in year-on-year global LNG production was in the early 1980s, analysts have said. The Waterborne has projected that LNG production in 2008 will fall slightly, to 8.31 TCF from 8.33 TCF in 2007, knocked by significant production outages throughout the year. "This is the result of delays in new projects, and a result of outages -- Nigeria, Algeria, Trinidad, Australia, Qatar.

On 2 Feb. 2009, Andy Flower said that LNG production in 2008 may increased at the slowest pace in 28 years because of equipment breakdowns, reduced gas supplies and delays in new projects. Flower estimated that LNG production may rise less than 2% in 2008 from 172.6 MMT in 2007. Growth in LNG trade has slowed after expanding 7.3% in 2007 because of the delayed commissioning of new ventures in Qatar, Russia and Yemen, technical problems in Algeria and Norway, and limited gas supplies to feed liquefaction plants in Nigeria and Egypt. The global recession may also cut LNG demand as it curtails electricity use in Asia. The output growth estimate 2008 is the lowest since 1980-81 when LNG output fell after the collapse of Algeria-US LNG trade, Flower quoted by Bloomberg as saying that.

Summarized statistic for 2008:

• According to Cedigaz, world gas consumption increased by 4% in 2008 to over 3055 BCM. Growth occurred in all regions, led by expansion of 6.2% in the Middle East, followed by 5.3% in Asia-Oceania, 4.5% in Africa, 4.2% in North America and Europe, 2.7% in Latin America, and 2.4% in the FSU. 

• International gas trade grew by 3% to 936.2 BCM. It was equal to 30.6% of total gas consumption. Europe's share of international trade increased by 1% to 48.1%, Asia's was static at 18.4%, and North America's contracted by 2% to 15.5%. Europe's import dependence in 2008 remained unchanged at 47%, helped by 11% Norwegian and Dutch output growth and a slower UK output decline.

• LNG's share of global trade reached 24.2%, from 25% in 2007 and 23.7% in 2006.

• According to GLNGI statistic and IGLNGI report (in June 2009), Global LNG trading increased by only 0.8% in 2008, to 172 MMT (237.2 BCM. Technical failures, feed-gas shortages and delays in commissioning of new liquefaction plants slowed down the growth of the international LNG trade.

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