Liquefaction Outlook

LNG will become an increasingly important source of supply to meet the world's demand for natural gas. High oil and gas prices, world-scale infrastructure commitments and market integration have conspired to globalize LNG on a grand scale from what many considered a niche industry a few years ago. Although there were only 12 LNG-exporting countries in 2004, the number is increasing. Over the next seven years the industry is expected to grow more than it did over the previous 40 years.

In 2005, Egypt joined the ranks of LNG-producing countries with the start of two separate liquefaction projects. Russia also entered the LNG business in 2005, not with LNG it produced but with LNG for which it traded pipeline natural gas. Not until 2008, when the Sakhalin liquefaction project is expected to start operations, will Russia become an LNG-producing country. Norway and Equatorial Guinea also have their first liquefaction terminals under construction, and the construction site for a new liquefaction terminal in Peru was dedicated in January 2006.