The document summarizes key developments in the global LNG industry in 2010. LNG trade volumes grew by a record 41 million tonnes to nearly 224 million tonnes. Four new liquefaction trains were commissioned, increasing global liquefaction capacity by 10% to 271 million tonnes per annum. Five new LNG receiving terminals began operations, raising global regasification capacity by 71% since 2005 to 572 million tonnes per annum. Qatar remains the largest LNG exporter, supplying over a quarter of global volumes, while the number of importing and exporting countries continues to rise.

1. International Gas Union (IGU)
News, views and knowledge on gas – worldwide
WORLD LNG REPORT
2010
March 2010 | International Gas Union Publication 1
March 2010
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International s Unio Pub
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4. 2 IGU World LNG Report -2010
Message From The President Of The International Gas Union
T he past few years have indeed been transformational for the
LNG industry, and 2010 was an equally eventful year. With LNG
volume having doubled between 2006 and 2010, LNG has become
an increasingly important medium for transporting natural gas across
borders. Countries which used to be small LNG importers have now
emerged as major buyers, while several others have now joined the
list of LNG importers. Latin America, the Middle East and Southeast
Asia will all become importers by the end of 2011.
To accommodate this increasingly complex web of buyers and sellers,
the structure of the LNG trade is evolving. While long-term contracts
will continue to underpin new investments, they are being increasingly
supplemented by a growing short-term and spot trade, made possible
in part by destination flexibility in LNG contracts. More than a fifth
of the world’s LNG trade in 2010 was in the short-term market, and the volume is expected to grow
further in the next few years. Evidently, more companies are now constructing regasification terminals
without first securing long-term supply contracts - such is the new landscape of the LNG market.
The backdrop for these changes is robust demand, where in developed and emerging markets,
natural gas has now become the fuel of choice to supply electricity, provide heating and cooling, and
support economic growth. Defying earlier forecasts of a possible glut in supply due to the economic
crisis, a strong demand was experienced in both OECD and non-OECD markets. OECD countries
consumed 90 bcm more LNG in 2010 than in 2009, with several countries exceeding the consumption
levels of 2008. In the BRIC countries demand grew by 100 bcm, well above 2008 levels. In a carbon-
constrained world, natural gas is a fuel whose awareness and attractions have continued to grow, and
the fundamentals for this industry are as strong as ever.
The boom in demand has been matched by an equally sharp increase in supply. Although growth
in supply was contributed by several countries, Qatar’s completion of its 77 MMtpa capacity in early
2011 stands out. Australia is also fast joining the LNG big league with the number of new FIDs recently
announced. An equally important development is the dramatic growth in unconventional gas in the
United States, which is set to alter the global energy scene. In 2010, shale gas had accounted for 20%
of the nation’s domestic gas output and that share is expected to grow further. Large regasification
terminals, built over the last few years, now stand almost idle as Henry Hub has remained disconnected
from the rest of the world.
Against this background, the world has been paying close attention to the human tragedy which had
unfolded in Japan as a result of that country’s worst ever earthquake and tsunami. The multiple-
layered shock which had rocked Japan’s nuclear power will also serve to support natural gas demand
even further. Meanwhile, recent changes in the Governments of some of the countries in the Middle
East are expected to reshape the region’s political and economic environment. So far, although the

5. IGU World LNG Report -2010 3
supply shock has not been very significant, the alacrity at which events have unfolded is a prudent
reminder of how volatile the current state of the world’s oil and natural gas industry is.
At a time when the LNG business is changing very rapidly, the International Gas Union under the
Malaysian Presidency is very pleased to publish our first annual World LNG Report. This report aims
to serve as a reference for veterans and newcomers in the LNG industry, and we trust that this
document will also inspire discussion on how our industry will continue to change and evolve in the
years to come. Solid facts and information are the basis for any sound commercial decision, and we
hope that this report will provide plenty of both.
Finally, I would like to thank PFC Energy and the Task Force for Programmed Group Committee
for LNG (PGC D) for preparing and making this IGU document a reality. Our special thanks also to
PETRONAS for helping to sponsor the publication of this inaugural report.
Thank you.

6. 4 IGU World LNG Report -2010
2. State of the LNG Industry at the End of 2010
During 2010 . . .
ß LNG volumes grew by a record 41 million tonnes per annum (MMtpa), or 22%, reaching nearly
224 MMtpa. This growth was driven by newly-commissioned liquefaction trains as well as the
ramp-up in output from trains commissioned in 2009. When compared to the 143 MMtpa of LNG
traded in 2005, the market has grown by more than 50% over the past five years.
ß The LNG market became even more flexible with spot volumes growing to 47 MMtpa, over one-
fifth of the LNG trade. By comparison, the spot market made up only 10% of trade in 2005, with
a majority of spot and short-term transactions coming from the Atlantic Basin.
ß Four liquefaction trains located in Peru (1 train), Qatar (2 trains) and Yemen (1 train) were
commissioned, bringing the total number of operational liquefaction trains to 94. Specifically, the
start-up of the Peru LNG facility made Peru the second LNG exporter in South America, and
bringing the total number of countries exporting LNG to 18.
ß Newly-commissioned liquefaction trains as well as the completion of debottlenecking at Malaysia
LNG Dua’s plant increased global liquefaction capacity by 24 MMtpa, or almost 10%, to 271
MMtpa at year-end. Since 2005, capacity has risen by 100 MMtpa from 171 MMtpa.
ß One project – Queensland Curtis – made a final investment decision (FID) in 2010, while two
others – Gladstone LNG and Donggi Senoro LNG – achieved FID in January 2011.
ß Five new LNG receiving terminals began operations, bringing the total to 83. Commissioning of
the Mina Jabel Ali floating regasification terminal in Dubai brought the total number of LNG
importing countries to 23.
ß The combination of newly-online receiving terminals and expansion projects at existing facilities
increased global regasification capacity by 41 MMtpa to 572 MMtpa, a 71% increase over 2005.
ß The LNG carrier fleet grew to 360 ships, up from 195 ships at end-2005. The combined capacity
of the 2010 fleet totaled 53 million cubic metres.
ß The US gas market continued to experience a profound transformation, driven in large part by a
boom in shale gas production. As a result, LNG volumes previously destined for the US market
have been re-directed to other markets.
ß The success of shale gas in the United States sparked enormous interest in other countries that
are believed to have significant deposits. These countries hope to increase their shale gas
production and lessen their need for LNG imports. In most places, however, that process will
take many years to materialise.
Key:
MMt = million tonnes MMtpa = million tonnes per annum cm = cubic metres
mcm = thousand cubic metres MMcm = million cubic metres bcm = billion cubic metres
MMBtu = million British thermal units

7. IGU World LNG Report -2010 5
3. LNG Imports and Exports
Traded LNG volumes doubled over the last decade with several new countries joining the LNG
market.
At the start of 2010, the LNG market was faced with the prospect of record supply growth, driven mostly
by Qatar, and a weak demand environment in the aftermath of the economic crisis and the shale gas
boom in the United States. Yet demand recovered impressively, and so did LNG imports: in fact, most
countries imported more LNG in 2010 than in the pre-crisis year of 2008. As a result of strong demand
and high oil prices, LNG prices remained high.
3.1. OVERVIEW
In 2010, the volume of LNG traded reached 223.8 MMtpa, representing a 41 MMtpa increase from
2009. This is the largest year-on-year growth the industry has ever experienced, with 2006 realizing
the next highest growth at 16 MMtpa. For the five years leading up to 2010 (2005-2009), the LNG
trade grew by an average 7% per annum, compared to a 22% jump in 2010.
The LNG trade has not only grown in volume, but in geographic reach as well. In 2005, there were 13
countries exporting LNG: Algeria, Australia, Brunei, Egypt, Indonesia, Libya, Malaysia, Nigeria,
Oman, Qatar, Trinidad & Tobago, United Arab Emirates (UAE) and the United States (US). During the
past five years (2006-2010), five additional countries began to export LNG: Equatorial Guinea,
Norway, Peru, Russia and Yemen; this list excludes countries that re-export foreign-sourced LNG.
Over the same period, eight countries – Argentina, Brazil, Canada, Chile, China, Kuwait, Mexico, and
the UAE – began importing LNG, adding to the existing 15 importers which include Belgium,
Dominican Republic, France, Greece, India, Italy, Japan, Portugal, Puerto Rico, South Korea, Spain,
Taiwan, Turkey, the United Kingdom (UK) and the US.
3.2. LNG TRADE VOLUMES
FIGURE 1: LNG TRADE VOLUMES, 1980-2010
250 25
Volume of LNG Trade
No. of LNG Exporting Countries (right axis)
200 20
No. of LNG Importing Countries (right axis)
No. of Countries
150 15
mmtpa
100 10
50 5
0 0
1982
1986
1990
1994
1996
2000
2004
2008
1980
1984
1988
1992
1998
2002
2006
2010
Sources: Cedigaz, Waterborne LNG Reports, US Energy Information Agency (EIA), US Department of Energy (DOE), PFC
Energy

8. 6 IGU World LNG Report -2010
The volume of LNG traded worldwide as well as the number of countries involved in the import and
export of LNG, has continued to grow, especially during the last decade. During 2006 to 2010, the
trade grew by 81 MMtpa – 78% of this incremental LNG came from previously existing LNG exporting
countries, the other 22% from countries that began LNG exports during the period. On the demand
side, 72% of the 81 MMtpa of incremental LNG was consumed by previously existing LNG importing
countries; the other 28% was consumed by countries that started importing during the period.
3.3. LNG EXPORTS BY COUNTRY
By the end of 2010, 18 countries were exporting their natural gas as LNG. In addition, four countries –
Belgium, Mexico, Spain and the US – were re-exporting LNG imported from another source.
Qatar is by far the largest LNG exporter. In 2010, the country supplied 57.5 MMtpa of LNG to the
market – more than one quarter (26%) of global supply – and its LNG exports will continue to grow as
the mega-trains realise full-year production. Pacific Basin countries, namely Indonesia, Malaysia and
Australia, are the next largest exporters and together accounted for 29% of the world’s LNG supply in
2010.
TABLE 1: LNG EXPORTS BY COUNTRY, 2010
Exporter MMtpa
Qatar 57.5 FIGURE 2: LNG EXPORTS BY COUNTRY, 2010
Indonesia 23.6 Nigeria, 8% Trinidad, 7%
Malaysia 23.1
Australia 19.1 Australia, 9% Algeria, 6%
Nigeria 18.1
Trinidad 15.2 Russia, 5%
Algeria 14.3
Russia 10.6 Oman, 4%
Oman 8.7 Malaysia,
10% Egypt, 3%
Egypt 7.1
Brunei 6.7 Brunei, 3%
UAE 5.8 Indonesia,
11% UAE, 3%
Yemen 4.3 Yemen, 2%
Eq
Equatorial Guinea 4.1
Guinea, 2%
Norway 3.5 Qatar, 26% Norway, 2%
Peru 1.3 Peru, 1%
Libya, 0.1% US, 0.3%
US 0.6
Libya 0.2
Total Exports 223.8
Sources: Waterborne LNG Reports, US DOE, PFC Energy
In 2005, Indonesia was the world’s largest exporter, a position the country had held since 1984.
However, by 2006, Qatar overtook Indonesia as the largest LNG supplier in the market. In fact, since
2005, Qatar’s LNG output has increased by over 150%.

9. IGU World LNG Report -2010 7
FIGURE 3: LNG EXPORTS BY COUNTRY IN 2005 AND 2010
60 200%
2005
% Growth in Exports
50 2010 150%
% Growth in Exports, 2010 vs. 2005 (right axis)
40 100%
mmtpa
30 50%
20 0%
10 -50%
0 -100%
Indonesia
Nigeria
Norway
Guinea
Brunei
Oman
Australia
Libya
Qatar
Egypt
Peru
Trinidad
Malaysia
Algeria
US
UAE
Yemen
Russia
Eq
Sources: Waterborne LNG Reports, US DOE, PFC Energy
In addition to the unprecedented growth from Qatar over the last decade, the entrance and growth of
LNG exports from non-traditional LNG exporters has meant a significant diversification of the LNG
supplier base over the last decade. The graph below shows how countries’ shares of LNG exports
have transformed as new players entered.
FIGURE 4: SHARE OF GLOBAL LNG EXPORTS BY COUNTRY, 1990-2010
100% Peru
Yemen
Russia
80% Norway
Eq Guinea
Egypt
60% Oman
% Share
Nigeria
Trinidad
40% Qatar
Libya
US
20% UAE
Australia
Brunei
0% Malaysia
Algeria
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Indonesia
Sources: Cedigaz, Waterborne LNG Reports, US DOE, PFC Energy
At the regional level, changes in the LNG supplier base have brought about two noteworthy shifts: in
2006, the Middle East and North Africa region (MENA) overtook the Asia-Pacific as the largest LNG
exporting region; and in 2007, Europe became the sixth region to export LNG.

10. 8 IGU World LNG Report -2010
FIGURE 5: LNG EXPORTS BY REGION, 1990-2010
250
200 Europe
Africa
150 S. America
mmtpa
N. America
100 MENA
Asia-Pacific
50
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Sources: Cedigaz, Waterborne LNG Reports, US DOE, PFC Energy
3.4. LNG IMPORTS BY COUNTRY
Japan has traditionally been the largest consumer of LNG and remains so today with an annual
consumption of 71 MMtpa of LNG in 2010, followed by South Korea at 34 MMtpa. Together, these two
countries account for just less than half (47%) of the world’s LNG consumption.
TABLE 2: LNG IMPORTS BY COUNTRY, 2010
Importer MMtpa
Japan 70.6 FIGURE 6: LNG IMPORTS BY COUNTRY, 2010
S Korea 34.1 France, 5% China, 4%
Taiwan, 5% India, 4%
Spain 20.5
UK 14.2 US, 4%
Taiwan 11.6 Italy, 3%
UK, 6%
France 10.5 Turkey, 3%
China 9.5 Belgium, 2%
India 9.3 Mexico, 2%
Spain, 9% Chile, 1%
US 8.5
Portugal, 1%
Italy 6.7
Kuwait, 1%
Turkey 5.9 South Brazil, 1%
Belgium 4.5 Korea, 15% Canada, 1%
Mexico 4.4 Argentina,
1%
Chile 2.3 Greece,
Japan, 32%
Portugal 2.2 0.4%
Kuwait 2.1 D. Republic
Puerto 0.3%
Brazil 2.0 Rico, 0.3% UAE, 0.1%
Canada 1.5
Argentina 1.3
Greece 0.9
Dominican Rep. 0.6
Puerto Rico 0.6
UAE 0.1
Total Imports 223.8
Sources: Waterborne LNG Reports, US DOE, PFC Energy

11. IGU World LNG Report -2010 9
FIGURE 7: LNG IMPORTS BY COUNTRY IN 2005 AND 2010
80 250%
2005
70 2010 200%
% Growth in Imports
60 % Growth in Imports, 2010 vs.2005 (right axis)
150%
50
mmtpa
40 100%
30
50%
20
0%
10
0 -50%
Kuwait
Argentina
China
Chile
Canada
US
Brazil
India
UAE
Mexico
Turkey
Taiwan
Japan
Portugal
Belgium
Dom Rep
Spain
Italy
Greece
UK*
France
S Korea
Puerto Rico
*Growth in UK imports in 2010 vs 2005 far exceeded 250%
Sources: Waterborne LNG Reports, US DOE, PFC Energy
As shown in the figure above, all LNG importing countries saw their LNG imports increase between
end-2005 and 2010, except for the US, which was due to the unanticipated additional domestic supply
from unconventional gas, in particular shale gas.
In developed and emerging markets, gas is increasingly a fuel of choice to supply electricity, provide
heating and cooling, and support economic growth. During the last five years (2006-2010), eight new
countries began to import LNG to meet domestic needs: Argentina, Brazil, Canada, Chile, China,
Kuwait, Mexico and the UAE. Notably, three of these countries are located in South America and two
in the Middle East – two regions which were not importing LNG and not considered to be significant
potential LNG markets even six years ago. In the near-term, Southeast Asia is also expected to
become a LNG importer with the startup of Thailand’s first receiving terminal in 2011.
FIGURE 8: SHARE OF GLOBAL LNG IMPORTS BY COUNTRY, 1990-2010
UAE
100% Chile
Brazil
Kuwait
Canada
80% Argentina
Mexico
China
60% UK
% Share
India
Dom Rep
Puerto Rico
40% Portugal
Greece
Turkey
Italy
20% Taiwan
US
Belgium
0% Spain
France
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 S Korea
Japan
Sources: Cedigaz, Waterborne LNG Reports, US DOE, PFC Energy

12. 10 IGU World LNG Report -2010
3.5. LNG INTERREGIONAL TRADE
In 2010, 60% of the world’s LNG was consumed by the Asia-Pacific region. During the year, Asian
countries consumed 135.1 MMtpa of LNG, of which a majority (60%) was sourced from within the
region, while 40% was imported from other regions.
TABLE 3: LNG TRADE BETWEEN REGIONS, 2010, MMTPA
Importing Region
1
Europe Asia-Pacific Middle East N. America S. America Total
Exporting Region
Africa 12.2 5.3 0.3 2.6 1.9 22.2
Asia-Pacific - 81.4 0.3 1.6 - 83.0
Europe 2.4 0.3 0.1 0.6 0.1 3.5
MENA 45.4 45.4 1.3 4.5 1.3 98.0
N. America 0.2 0.9 - (0.5) 0.1 0.6
S. America 5.3 1.7 0.3 6.2 2.8 16.5
Total 65.5 135.1 2.2 14.9 6.1 223.8
Sources: Waterborne LNG Reports, EIA, DOE, PFC Energy
TABLE 4: LNG TRADE VOLUMES BETWEEN COUNTRIES, 2009, MMTPA
Argentina
Dom Rep
Importer
Portugal
Belgium
Canada
Greece
Taiwan
Mexico
France
Turkey
Kuwait
Japan
Korea
China
Spain
Brazil
Total
Chile
India
Italy
US*
UK
Exporter
Algeria - - - - - - - 5.82 0.39 0.12 0.96 - 0.06 - - 0.09 3.99 - 3.16 - 1.27 15.9
Australia - - - - - 3.48 - 0.06 - 0.81 - 12.33 1.13 0.06 - - - 0.38 - - 0.06 18.3
Belgium - - - - - 0.06 - - - - - - - 0.06 - - 0.06 - - - - 0.2
Brunei - - - - - - - - - - - 6.17 0.55 - - - - - - - - 6.7
Egypt 0.12 0.07 - 0.06 - 0.06 - 1.20 0.18 0.12 0.06 0.24 0.33 - 0.31 - 3.32 0.06 0.06 - 0.38 9.9
Eq. Guinea - - - - 0.25 0.13 - 0.06 - 0.19 - 1.07 1.30 - - 0.07 - 0.58 - - - 3.6
Indonesia - - - - - 0.46 - - - 0.06 - 12.56 3.12 - 0.06 - - 2.80 - - - 19.1
Libya - - - - - - - - - - - - - - - - 0.55 - - - - 0.5
Malaysia - - - - - 0.81 - - - 0.19 - 12.84 5.87 0.07 - - - 2.83 - - - 22.6
Nigeria - 0.07 0.06 - - 0.06 - 1.76 - 0.24 - 0.53 0.25 - 1.95 1.59 3.33 0.87 0.79 - - 11.8
Norway - 0.13 - - - - - 0.33 - - - - - - 0.06 - 1.02 - - - 0.17 2.3
Oman - - - - - 0.06 - - - 0.18 - 2.58 4.06 0.06 - - 0.98 0.19 0.06 - - 8.2
Qatar - 4.52 - 0.09 0.06 0.40 - 0.13 - 6.53 1.30 7.93 6.68 - 0.09 - 3.39 1.22 0.32 - 4.12 37.0
Russia - - - - - 0.19 - - - 0.51 - 2.84 1.02 0.31 - - - 0.12 - - - 5.0
Trinidad 0.59 0.12 0.44 0.71 0.18 0.06 0.42 0.54 0.03 0.51 - 0.10 0.75 0.11 0.06 0.30 3.31 0.07 0.06 - 1.68 15.5
UAE - - - - - - - - - 0.13 - 5.14 - - - 0.06 - - - - - 5.3
US - - - - - - - - - - - 0.55 - - - - - - - - - 0.6
Yemen - - - - - - - - - - - - 0.20 - 0.06 - 0.07 - - - - 0.3
Re-exports - -0.24 - - - - - - - - - - - - - - - - - - - -0.3
Total 0.7 4.7 0.5 0.9 0.5 5.8 0.4 9.9 0.6 9.6 2.3 64.9 25.3 0.7 2.6 2.1 20.0 9.1 4.5 7.7 10.0 187
*Includes Puerto Rico
Sources: Waterborne LNG Reports, US DOE, PFC Energy
1
Export volumes for N. America and Europe include re-exported cargoes, which are subtracted from the region’s imports.

13. IGU World LNG Report -2010 11
T ABLE 5: LNG TRADE VOLUMES BETWEEN COUNTRIES, 2010, MMTPA
Argentina
Dom Rep
Importer
Portugal
Belgium
Canada
Greece
Taiwan
Mexico
France
Turkey
Kuwait
Japan
Korea
China
Spain
Brazil
Total
Chile
India
UAE
Italy
US*
UK
Exporter
Algeria - - - - 0.18 - - 4.77 0.71 - 1.23 0.06 - - - - 3.54 - 2.83 - 0.95 - 14.3
Australia - - - - - 3.90 - - - 0.06 - 13.28 0.91 0.06 - - - 0.83 - - - - 19.0
Belgium - - 0.06 - - - - - - - - 0.06 0.07 0.07 - - 0.06 - 0.07 - - - 0.4
Brunei - - - - - - - - - - - 5.93 0.73 - - - - - - - - - 6.7
Egypt - 0.13 - - 0.36 - - 0.53 0.06 0.06 0.44 0.43 0.81 0.21 0.12 - 2.11 0.06 0.19 - 0.12 1.49 7.1
Eq. Guinea - - 0.02 - 1.17 0.07 - - 0.06 0.12 0.06 0.54 1.45 0.19 - - - 0.45 - - - - 4.1
Indonesia - - - - - 1.88 - - - - - 12.75 5.54 - 1.38 - - 1.98 - - - - 23.5
Libya - - - - - - - - - - - - - - - - 0.25 - - - - - 0.2
Malaysia - - - - - 1.19 - - - - - 13.89 4.96 0.13 - - - 2.96 - - - - 23.1
Nigeria - 0.06 0.68 - - 0.20 - 2.81 - 0.25 - 0.58 0.87 0.06 1.73 2.06 5.71 0.81 1.08 - 0.31 0.88 18.1
Norway - 0.06 - 0.06 - - - 0.33 - - 0.13 - 0.13 - - - 1.33 0.06 0.12 - 0.70 0.55 3.5
Oman - - - - - - - - - - - 2.86 4.64 0.71 - - 0.12 0.39 - - - - 8.7
Peru - 0.08 0.06 0.12 - - - - - - - - 0.07 - 0.18 - 0.49 - - - - 0.34 1.3
Qatar 0.18 4.51 0.38 0.18 0.12 1.26 - 1.77 0.03 8.05 4.56 7.91 7.50 - 0.81 0.06 4.19 2.89 1.46 0.12 10.46 0.96 57.4
Russia - - - - - 0.38 - - - - - 6.23 3.39 0.07 - - - 0.51 - - - - 10.6
Trinidad 1.10 0.06 0.70 1.18 0.37 0.05 0.59 0.24 0.06 0.48 0.24 0.11 0.66 0.29 - 0.13 2.51 0.37 0.19 - 1.29 4.52 15.1
UAE - - 0.04 - - - - - - - - 5.10 0.19 0.18 - - - 0.33 - - - - 5.8
US - - 0.06 - - - - - - - - 0.63 0.26 - - - 0.09 - - - 0.14 - 1.2
Yemen - - - - 0.06 0.47 - 0.07 - 0.28 - 0.12 1.88 0.14 0.13 - 0.13 - - - 0.20 0.82 4.3
Re-exports - -0.33 - - - - - - - - - - - - - - - - - - - -0.74 -1.1
Total 1.3 4.6 2.0 1.5 2.3 9.4 0.6 10.5 0.9 9.3 6.7 70.5 34.1 2.1 4.3 2.2 20.5 11.6 5.9 0.1 14.2 8.8 224
*Includes Puerto Rico
Sources: Waterborne LNG Reports, US DOE, PFC Energy
PETRONAS Malaysia LNG (MLNG) Complex
Bintulu, Sarawak

14. 12 IGU World LNG Report -2010
3.6. LNG SPOT MARKET2
The structure of the LNG trade is evolving. Traditionally, LNG has been delivered under long-term
arrangements between buyers and sellers and was only marginally traded on a spot basis. But since
the 1990s, spot LNG trading has grown steadily, with more rapid growth during the last five years. Up
till 2005, the spot trade accounted for only 10% of total LNG traded, but has since grown to more than
a fifth (21% or 47 MMtpa) in 2010.
FIGURE 9: VOLUME OF SPOT LNG TRADE AND SHARE OF TOTAL LNG TRADE, 1995-2010
50 25%
Spot LNG
40 20%
% of Total LNG Trade (right axis)
% Share
30 15%
mmtpa
20 10%
10 5%
0 0%
2000
2001
2002
2003
2004
2005
2006
1995
1996
1997
1998
1999
2007
2008
2009
2010
Sources: Cedigaz, Waterborne LNG Reports, US DOE, PFC Energy
In 2005, 11 countries were active spot LNG exporters and 12 countries were spot cargo importers.
However, by end 2010, these numbers have since increased to 16 and 22, respectively. The appetite
to buy LNG on a spot basis has increased significantly as the list of spot buyers has nearly doubled,
whereas the list of spot sellers has increased, albeit at a slower pace.
FIGURE 10: NUMBER SPOT CARGOES TRADED AND EXPORTERS AND IMPORTERS OF SPOT LNG, 1995-2010
1,000 25
No. of Spot Caroges Traded
800 No. of Countries Exporting Spot LNG (right axis) 20
No. of Countries Importing Spot LNG (right axis)
No. of Countries
No. of Cargoes
600 15
400 10
200 5
0 0
1995
1996
1999
2000
2001
2004
2005
2008
2009
2010
1997
1998
2002
2003
2006
2007
Sources: Waterborne LNG Reports, US DOE, PFC Energy
2
Spot and short-term trade (hereafter referred to as spot) is defined as any transition that is not supported by a contract with a duration of more
than four years. Spot trade figures also include cargoes that are over and above contracted volumes. For example, if a company has a 5
MMtpa long-term contract with a supplier but in one year imports 6 MMtpa from that supplier, that additional 1 MMtpa is considered spot.

15. IGU World LNG Report -2010 13
Looking Ahead. . .
• The LNG market experienced
two shocks in early 2011: the
devastating earthquake and
tsunami which hit Japan in March
2011 produced a demand shock,
while the political unrest in several
MENA countries has led to a
supply shock. Together, these
developments will accelerate the
arrival of a tight LNG market.
• Increased short-term LNG
needs in Japan has already
provided a boost to spot prices in
the Pacific Basin. Longer-term,
changing public opinion toward
nuclear safety poses significant
upside for natural gas and LNG
demand as governments across
regions are rethinking nuclear
policy. In MENA, the cessation of
Libyan LNG exports has had only
a modest impact on LNG supply,
but concerns loom about further
regional shut-ins.
• Where will Qatari LNG volumes
flow in the future? The world’s
largest LNG supplier, Qatar, has a
significant volume of flexible LNG
supply; where it will send those
volumes, could significantly impact
on the LNG balance in the Atlantic
and Pacific Basins.

16. 14 IGU World LNG Report -2010
4. LNG Liquefaction Plants
The geography of growth in liquefaction capacity will be shifting from Qatar to Australia.
Qatar drove liquefaction capacity growth in recent years, reaching its target of 77 MMtpa in February
2011. However, over the next decade, Australia’s liquefaction capacity is set to grow significantly. Of
the remaining projects under construction, the majority are in Australia, in part driven by conventional
reserves and in part by coal-bed methane (CBM) to LNG projects. Three LNG projects utilizing CBM
reserves have received environmental approval and two have already begun construction.
4.1. OVERVIEW
At the end of 2010, there were 94 liquefaction trains in operation, representing global liquefaction
capacity of 270.9 MMtpa. In 2011, one additional train has been commissioned (Qatargas IV, 7.8
MMtpa) and by the end of the year, one more (Pluto LNG, 4.8 MMtpa) is expected to complete
construction. Since 2005, five countries have commissioned greenfield LNG plants: Equatorial
Guinea, Norway, Peru, Russia and Yemen; whilst another seven have expanded existing liquefaction
capacity: Australia, Egypt, Indonesia, Malaysia, Nigeria, Oman and Qatar.
4.2. LIQUEFACTION CAPACITY GLOBALLY
At the end of 2010, global liquefaction capacity stood at 270.9 MMtpa, compared to 171.4 MMtpa at
end-2005, with another 64.9 MMtpa under construction. Current liquefaction capacity is a reflection of
tremendous growth over the past decade. During 2006-2010, new liquefaction capacity was added at
an average annual rate of 10% as compared to an average 5% per annum during 1990-2000.
3
FIGURE 11: GLOBAL LIQUEFACTION CAPACITY BUILD-OUT, 1990 - 2015
Forecast
350
300
250
200
mmtpa
150
100
50
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Source: PFC Energy, Company Announcements
The first liquefaction plant in Arzew, Algeria (which has since been decommissioned) had a nameplate
capacity of 0.85 MMtpa in 1964, but train capacities have steadily increased over the years. The
recently completed Qatari mega-trains, which utilise the APCI AP-X liquefaction process (Qatargas II
T1-2, Qatargas III, Qatargas IV and RasGas III T1-2) have a nameplate capacity of 7.8 MMtpa each.
3
Forecast for LNG capacity to 2015 are calculated based on company-announced start dates for sanctioned projects only. As of May 2011, all
sanctioned liquefaction project had already begin construction. Planned decommissioning of plants in Algeria and Indonesia are also included.

17. IGU World LNG Report -2010 15
Since 2005, 24 trains have been commissioned, bringing the total number of LNG trains in operation
at end of 2010 to 94. The 95th train, Qatargas IV, came onstream in February 2011. The average size
of new trains has also since increased; in the first years of LNG, an average train was 1.1 MMtpa,
compared to 4.8 MMtpa during the last five years.
FIGURE 12: NUMBER OF TRAINS COMMISSIONED VS. AVERAGE TRAIN CAPACITY, 1964-2010
5 25
Average Capacity of Trains Commissioned
No. of New Trains Online
No. of New Trains Commissioned During the Period (right axis)
4 20
3 15
mmtpa
2 10
1 5
0 0
1964- 1971- 1974- 1981- 1985- 1991- 1996- 2001- 2006-
1970 1975 1980 1984 1990 1995 2000 2005 2010
Source: PFC Energy
4.3. LIQUEFACTION CAPACITY BY COUNTRY
During 2010, Peru commissioned its first liquefaction plant, making it the 18th country to have
liquefaction capacity to export LNG. The seven largest countries based on total liquefaction capacity
accounted for 75% of the world’s liquefaction capacity in 2010; with the top three – Qatar, Indonesia
and Malaysia – accounting for nearly 50%.
TABLE 6: LIQUEFACTION CAPACITY BY COUNTRY, 2010
Country MMtpa
Qatar 69.2 FIGURE 13: LIQUEFACTION CAPACITY BY COUNTRY, 2010
Indonesia 34.1 Algeria, 7% Trinidad, 6%
Malaysia 23.9 Australia,
7% Egypt, 5%
Nigeria 21.9
Algeria 19.9 Oman, 4%
Australia 19.3
Trinidad 15.5 Russia, 4%
Egypt 12.2 Nigeria, 8%
Brunei, 3%
Oman 10.8
Yemen, 2%
Russia 9.6 Malaysia, UAE, 2%
Brunei 7.2 9%
Norway, 2%
Yemen 6.7
Peru, 2%
UAE 5.8
Indonesia,
Norway 4.5 Equatorial
13%
Guinea, 1%
Equatorial Guinea 4.5 Qatar, 26%
Peru 3.7 US, 0.6%
Libya, 0%
US 1.5
Libya 0.7
Total Capacity 270.9
Source: PFC Energy

18. 16 IGU World LNG Report -2010
Since 2005, all countries saw their liquefaction capacity remain the same or grow, except for Algeria,
whose liquefaction capacity dropped 4% due to decommissioning of LNG trains. Moreover, since
2005, five countries commissioned greenfield LNG plants: Equatorial Guinea, Norway, Peru, Russia
and Yemen; while another seven expanded existing liquefaction capacity: Australia, Indonesia,
Malaysia, Nigeria, Oman, Qatar and Trinidad &Tobago.
FIGURE 14: LIQUEFACTION CAPACITY BY COUNTRY IN 2005 AND 2010
75
% Change in Liq. Capacity
2005 160%
60 2010
% Growth in Liq. Capacity (2010 vs. 2005) 120%
45
80%
30
mmtpa
40%
15 0%
0 -40%
Indonesia
Nigeria
Equatorial
Norway
Oman
Australia
Libya
Brunei
Algeria
Qatar
Egypt
Peru
Trinidad
Malaysia
US
Yemen
UAE
Russia
Guinea
Source: PFC Energy
The 1.5 MMtpa Kenai LNG – the only commercial LNG plant in the US – is slated to go offline in 2011,
with no new liquefaction capacity expected to come onstream in the US until Cheniere’s planned
liquefaction plant at Sabine Pass in the Gulf of Mexico. Indonesia’s Arun LNG as well as additional
trains in Algeria are also scheduled to be taken offline.
In recent years, Qatar contributed the largest volume of global incremental liquefaction capacity.
During the past five years (2006-2010), Qatar commissioned approximately 44 MMtpa in liquefaction
capacity. In February 2011, Qatar achieved its planned target of 77 MMtpa of nameplate capacity; but
a moratorium on new production from the North Field limits expansion potential, though the Qataris
have discussed debottlenecking the existing mega-trains.
Over the next decade, Australia will be the driving force behind growth in global liquefaction capacity.
Thirty-six MMtpa of capacity is currently under construction in Australia and more than 120 MMtpa is
being proposed or in the planning stages – a number that keeps growing as companies discover
additional natural gas reserves. There is also a significant amount of proposed capacity in Nigeria –
40 MMtpa – but developers have yet to start construction or reach a final investment decision on any
of the proposed projects.
There is 57.1 MMtpa of liquefaction capacity currently under construction, 63% (36.1 MMtpa) of which
is in Australia. In addition to the trains under construction, 95.4 MMtpa of liquefaction capacity has
been completed or is currently undergoing front-end engineering and design (FEED), and over 230
MMtpa of additional capacity has been proposed. For the 95.4 MMtpa of capacity that has been
completed or is in FEED, Australia is again dominant, accounting for 61% (58.5 MMtpa). Atlantic
Basin Russia accounts for the second largest volume (24 MMtpa) of liquefaction capacity that has
been completed or is in FEED.

19. IGU World LNG Report -2010 17
FIGURE 15: FUTURE LIQUEFACTION CAPACITY BY STATUS AS OF Q1 2011
125
Pacif ic Atlantic-Mediterranean Middle East
100
75
mmtpa
50
25
0
Under Construction FEED Completed / In FEED Proposed
Source: PFC Energy
4.4. LIQUEFACTION CAPACITY BY REGION
Three quarters of global liquefaction capacity is located in the Pacific Basin and the Middle East, with
the remaining quarter in the Atlantic Basin.
TABLE 7: LIQUEFACTION CAPACITY BY BASIN IN 2005 AND 2010, MMTPA
Basin 2005 2010
Atlantic-Mediterranean 58.2 77.8
Middle East 38.4 92.5
Pacific 74.75 100.6
Total Capacity 171.4 270.9
Source: PFC Energy
FIGURE 16: LIQUEFACTION CAPACITY BY BASIN IN 2005, 2010 AND 2015
150 2015
125
2015 2010
100 2010
2015
mmtpa
2010 2005
75
2005
50 2005
25
0
Atlantic-Mediterranean Middle East Pacific
Source: PFC Energy
Growth in the last five years has centred in the Middle East, notably Qatar. Qatar ramped up to full
production the first of its 7.8 MMtpa mega train in July 2009 and, through February 2011, had brought
another five plants onstream, representing 46.8 MMtpa in new liquefaction capacity.

20. 18 IGU World LNG Report -2010
Future growth can be expected from the Pacific Basin, driven by LNG developments in Australia: 76%
of this capacity is currently under construction (44.7 MMtpa out of 59.1 MMtpa) in the Pacific Basin,
36.1 MMtpa of which is in Australia. There is also another 64.5 MMtpa of liquefaction capacity in the
Pacific Basin which is either in the FEED phase, or has completed FEED.
4.5. LIQUEFACTION PROCESSES
There were eight types of liquefaction processes in use at liquefaction plants by the end of 2010. The
most extensively used process was APCI C3-MR, which accounted for 144 million tonnes (55%) of the
global nameplate liquefaction capacity.
FIGURE 17: LIQUEFACTION CAPACITY BY TYPE OF TECHNOLOGY, 2010
ConocoPhillips
APC Optimized
C3MR/Split Cascade
APC AP-X MR 12%
12% 12%
Shell DMR
4%
Linde MFC
Other 2%
9%
APC Split MR
0%
Other
APC C3MR 3%
55%
Source: PFC Energy
Air Products and the ConocoPhillips Optimized Cascade® technology are the most widely used
liquefaction technologies, present in 92% of global LNG capacity. Air Products technology is the most
widely used, present in 80% of the LNG trains around the world in 2010 – roughly the same market
share it had enjoyed for more than 30 years. ConocoPhillips Optimized Cascade® technology is the
second most widely used, present in about 12% of the world’s liquefaction plants.
New processes are being employed at several projects. Shell’s Dual Mixed Refrigerant (DMR)
process is being used at Sakhalin LNG in Russia, APCI’s AP-X technology at the Qatari mega-trains,
and the Linde Mixed Fluid Cascade (MFC) process is in use at Snøhvit LNG in Norway.
The Snøhvit LNG plant, which came online in 2007, uses a new process developed by Linde/Statoil.
The Mixed Fluid Cascade (MFC) process comprises three refrigeration cycles in series. Novel project
features include all electrically-driven compressors and direct use of seawater for cooling. Carbon
dioxide present in the feedgas is removed and re-injected underground.
ExxonMobil and Qatar Petroleum were the first to employ the APCI AP-X technology at the two-train,
15.6 MMtpa Qatargas II project. The same design was repeated for all the 7.8 MMtpa mega-trains in
Qatar: RasGas III, Trains 2 and 3 and Qatargas III and IV. A nitrogen sub-cooling loop has been
added to the C3/MR process to increase capacity for the same sized MCHE. It is also the first
application of a GE Frame 9 gas turbine as a mechanical driver for the refrigerant compressors.

21. IGU World LNG Report -2010 19
The Shell Dual Mixed Refrigerant (DMR) process is being used for the Sakhalin project in Russia.
This novel process uses two Mixed Refrigerant cycles in series and the process is air cooled for
process and environmental reasons. It is sufficiently flexible to support the wide range of ambient
temperature experienced in the sub-arctic environment. Train capacity is 4.8 MMtpa.
FIGURE 18: LIQUEFACTION CAPACITY BY TYPE OF TECHNOLOGY, 2000-2010
300
Other
250 APC Split MR
200 Linde MFC
Shell DMR
mmtpa
150
ConocoPhillips
100 Optimized Cascade
APC AP-X
50 APC C3MR/Split
MR
0 APC C3MR
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: PFC Energy
Looking Ahead. . .
Will the LNG industry be able to sanction projects at a rate necessary to keep pace with
LNG demand growth? Significant liquefaction has been proposed, but how much and how fast
the proposed capacity comes on-stream will be critical to enable meeting projected demand
growth.
Will floating liquefaction technology be a game-changer for the industry? Floating
liquefaction technology has yet to be commercially proven, but success could open up previously
stranded or non-commercial gas reserves.

22. 20 IGU World LNG Report -2010
5. Special Report: Impact of Unconventional Gas on the LNG Industry
The rapid transformation of the US natural gas market following the shale gas boom has already
had an impact on the LNG industry, but this impact could grow if the US exports shale gas as
LNG or if unconventional gas can have the same transformative impact on other markets.
The shale gas boom in the US and its dampening impact on the country’s LNG demand has amplified
the supply and demand balance in the market in 2009 and 2010. Yet the absence of the US as a
significant LNG importer merely pushes back the time at which the LNG market tightens by a couple of
years. The bigger question is whether other countries will replicate the success of the US – this could
happen in some places, but in general the process will be a long one.
5.1. INTRODUCTION
The following special report discusses the factors that led to the unconventional gas boom in the US,
the potential for that to be replicated elsewhere and the resulting impact on LNG demand. It also
addresses the potential for the US to export shale gas as LNG, another possible impact from the shale
gas boom on the LNG market.
5.2. US SHALE GAS BOOM AND IMPACT ON US LNG DEMAND
Since 1950, the US gas system has gone through five phases. First, production grew by an average
6% per annum from 1950 until it peaked in 1973. Second, production started to fall in 1974 until it
bottomed out in 1986 – in that period, production declined by over 25%. Third, from 1987 to 2000, US
production increased by a sustained 1.3% annually, leading to a significant recovery in output, but still
below the 1973 peak. Fourth, production hit another peak in 2000 and started to decline by 1.2% per
annum until 2005. From 2006 onward, production experienced its most dramatic growth in the last 40
years, growing by an average 3.6% per annum. In 2010, output was almost equal to the 1973 peak.
The growth in gas production has been driven primarily by the ability to produce unconventional
resources at ever cheaper rates. Unconventional gas includes shale, coal bed methane and tight gas
which are all characterized by low natural permeability in the reservoir (commercial gas volumes do
not “flow” naturally). Using horizontal drilling and hydraulic fracturing, companies have been able to
create sufficient permeability to extract ever increasing commercial volumes from these reservoirs.
FIGURE 19: US NATURAL GAS PRODUCTION FIGURE 20: SHARE OF SHALE GAS IN US GAS PRODUCTION
700 25%
600
20%
% Share of Total
500
400 15%
bcm
300
10%
200
5%
100
0 0%
1950 1960 1970 1980 1990 2000 2010 1990 1995 2000 2005 2010
Source: EIA, PFC Energy Source: EIA

23. IGU World LNG Report -2010 21
This growth in unconventional gas production has emerged as a shock to the LNG system for two
reasons: first, it has made clear that the US will not need to import significant volumes of LNG over
the next decade (at least); and second, there is growing uncertainty over whether other countries will
be able to replicate the experience of the US and hence, reduce their own needs for imports.
Together, these two prospects could reshape the LNG industry.
5.3. IMPLICATIONS OF US SHALE GAS BOOM ON LNG TRADE FLOWS AND PRICES
Perhaps the most important global implication of this “shale gas revolution” is that the US no longer
needs as much LNG as previously forecasted. One useful way to think about the importance of US
LNG is to re-examine the forecasts done by the Energy Information Administration (EIA) at the US
Department of Energy. In its 2005 Annual Energy Outlook (AEO 2005), the EIA was forecasting that
the US would need to import as much as 70 bcm in 2010 to meet demand and offset the drop in
indigenous production. Given actual LNG production in 2010, this would have amounted to a global
market share of 23%, making the US the world’s second largest LNG market after Japan. To meet
this projected rise in imports, there was a boom in US regasification capacity which increased
sevenfold between 2002 and 2010.
As the production growth story proved to be sustainable, those expectations shifted: by 2008, the EIA
thought that by 2010, the US would only need 34 bcm. However, even those numbers turned out to
be optimistic. In the 2011 AEO, the EIA has significantly downgraded its LNG import expectations and
it effectively foresees no growth through 2025.
FIGURE 21: EIA FORECASTS FOR US LNG IMPORTS FIGURE 22: US REGASIFCATION CAPACITY VS. IMPORTS
200 150
AEO 2005 US Regas Capacity
AEO 2008 125
150 US LNG Imports
AEO 2011
100
100 75
bcm
bcm
50
50
25
0 0
2000 2005 2010 2015 2020 2025 2000 2002 2004 2006 2008 2010
Source: EIA Source: PFC Energy
This means that a significant source of demand for global LNG supplies has disappeared. Given that
LNG investments have a long-lead time, there is a significant amount of LNG capacity that is coming
online between 2009 and 2012 which was constructed based on the market expectations of 2005,
whereby the US would become a major import market. This LNG had to find a new place to go – and
in 2010, it found a home mostly in Europe as well as in emerging markets (Middle East and Latin
America). Combined with a recession-induced drop in gas demand in 2009, the lack of more imports
needed from the US produced a longer-than-expected glut in gas supplies. This glut has had two
implications for gas pricing:

24. 22 IGU World LNG Report -2010
First, the US market has become effectively disconnected from the broader global market. While
Henry Hub has never correlated perfectly with prices in either Europe or Asia, the disparity between
Henry Hub and prices elsewhere has been magnified in 2008, 2009 and 2010. Of particular interest is
in 2010, where US gas prices were more than 50% lower than prices in Japan, while they are also
being traded at a significant discount vis-à-vis UK gas prices (-33%). As a result of this disparity, a
number of companies that own regasification terminals which are currently idle, are now proposing
instead to start exporting LNG from North America.
FIGURE 23: GAS PRICES, 2010 FIGURE 24: EUROPEAN GAS PRICES, OIL-LINKED VS. SPOT
12 16 NBP
$10.41
14 Oil Linked
10
12
8
$6.55 10
$/MMBtu
$/MMBtu
6 8
$4.37
6
4
4
2
2
0 0
Japan UK USA 2005 2006 2007 2008 2009 2010
Source: PFC Energy Source: PFC Energy
Second, there has been growing pressure on the linkage between oil-linked and spot prices in Europe.
In 2009, the average oil-linked contract price exceeded the spot price at NBP by ~$3.5/MMBtu. In
2010, the gap narrowed only slightly, reaching $2.16/MMBtu. In 2010, the gap narrowed and by the
end of 2010 it had disappeared at least in the short term – but there have been two distinct byproducts
of this resulting disparity. First, buyers have sought to renegotiate terms with sellers. In general,
buyers have succeeded in linking some of the volumes they purchase to spot prices rather than oil;
they have also achieved a relaxation of take-or-pay (TOP) provisions. Second, several new entrants
have sought to procure gas directly from the spot market (pipeline or LNG). Combined with the
existence of TOP clauses, this competitive pressure has further squeezed incumbent importers who
are usually saddled with higher-priced gas that they cannot market.
Thinking about the importance of US shale gas from a more structural perspective, there are two
questions to consider. First, is the US shale gas revolution sustainable? If so, at what price is shale
gas viable and what risks are associated with its production? If it is indeed both abundant and cheap
to produce, then the US could easily emerge as a major exporter of LNG within the next decade.
Second is the question of whether the absence of US LNG import demand has produced a short or
long-term glut in supply. This is the controversial subject in the gas world today with two camps –
those who think the glut is cyclical, and those who think it is structural – having several data points to
support their argument. The important question to ask is: even if one excludes the US as an
importing country, does the global supply and demand balance tighten sooner or later?