Global LNG trade grew 10.3% in 2017 to 393.4 Bcm of gas equivalent, the fastest growth since 2010, BP said in its latest annual statistical review published Wednesday.
Chinese imports accounted for 50% of global growth
LNG glut 'of sorts' in recent years: chief economist Dale
LNG supply growth leading to more price convergence
Strong production growth -- aided by startup of new LNG trains in Australia and the US -- was met by equally strong demand growth from China, which accounted for almost half of the global expansion.
Chinese LNG imports totaled 52.6 Bcm of gas equivalent last year, up 47% on the 35.9 Bcm it bought in 2016.
Qatar remained the main global LNG supplier, with exports totaling 103.4 Bcm of gas equivalent, while the US saw its exports soar to 17.4 Bcm last year from just 4.3 Bcm in 2016 -- which was the first year of LNG supplies from the lower 48.
Australia also saw its exports rise strongly by 28% to 75.9 Bcm last year, making it the world's second biggest LNG supplier by some distance.
BP chief economist Spencer Dale said that while market observers had predicted an LNG supply "glut" given the wave of new supply projects that came online in the past few years, the result instead has been periods of unsustainably low prices rather than a build-up of idle capacity.
"So there has in fact been an LNG glut of sorts in recent years, but this has resulted in periods of unsustainably low prices rather than idle LNG capacity," Dale said.
The apparent absence of a major supply glut, he said, also reflects the fact that actual LNG deliveries have come on stream less quickly than originally planned due to a variety of technical issues.
Dale said the global gas market was becoming increasingly integrated through the greater mobility of LNG exports.
He said the ability of LNG to alter its destination in response to price signals -- in a way that pipeline exports cannot -- was likely to lead gas markets around the world becoming increasingly integrated, with regional gas prices increasingly moving in unison.
"This increasing integration is also apparent in a convergence of the volatility of gas prices in different markets," Dale said.
"As markets open up, shocks in one region are increasingly shared across the world, leading to more similar patterns of variability across markets."
