Deloitte: How technology and changing business models are impacting the future of LNG
Source: Deloitte , Author: Posted by BI-ME staff
Posted: Mon April 1, 2019 2:15 pm

UAE. What will the liquefied natural gas (LNG) market of tomorrow look like? Today, a number of newer business models have emerged due to rapidly changing dynamics that have impacted the market, including increasing resource availability, new technologies and new sources of demand.

According to Deloitte’s report, Remodel, reinvent: How technology and changing business models are impacting the future of LNG, the LNG market of tomorrow will be more flexible, liquid and accessible, shaped by new business models and technologies. Key findings of the report include:

• Supply growth: Overwhelmingly, survey respondents saw most of the new liquefaction capacity being built in the Americas, driven by the number of high profile projects currently under construction in the United States. Rapid supply growth is also expected in Qatar, Russia and Mozambique.

• New sources of demand: Unlike supply, survey respondents see most rapid demand growth in the Asia Pacific Region over the next five years, driven by both demographic and economic growth. China, India and Pakistan were cited as the biggest source of new demand over the next five years.

• New business models: Short-term contracts will play an increasingly large role in LNG. On the other side, respondents do not see companies developing US-style tolling projects in other countries, citing a range of reasons including regulatory, market and project scale challenges. Markets will rely on shorter-term, more flexible and potentially more volatile contracts.

• Adapting new technologies: Digitalization and big data analytics, machine learning and blockchain could have an impact on the LNG industry, with a particular interest in deploying blockchain to facilitate trade. However, the industry appears to be unsure about how to best adapt and deploy new technologies. This is likely due to both technical complexity and the difficulty in generating consensus around a single system.

Bart Cornelissen, Partner and Energy & Resources leader commented, “The regional imbalance in supply and demand is expected to continue, which offers opportunities also for GCC players to take advantage off. At the same time technology and business model innovations change the competitive landscape, and as such a clear strategy how to play and win in the LNG market will be required.”

As Asian economies drive the near term demand for LNG, it will create opportunities for energy infrastructure investors looking to capitalise on this macroeconomic shift by developing or investing in the supply chain. The ongoing change in energy mix in net consuming economies will provide an opportunity to resource exporters to seek routes to end markets through direct investments.” said Adnan Fazli, Director and Energy & Resources Leader, Financial Advisory, Deloitte Middle East.

The report can be found online here.

Photo caption: Bart Cornelissen, Partner and Energy & Resources leader

About Deloitte:
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities. DTTL (also referred to as “Deloitte Global”) and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients.

Please see www.deloitte.com/about to learn more.
Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services. Our network of member firms in more than 150 counties and territories, serves four out of five Fortune Global 500® companies.

Learn how Deloitte’s approximately 280,000 people make an impact that matters at www.deloitte.com.

About Deloitte & Touche (M.E.):
Deloitte & Touche (M.E.) (DME) is a licensed member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926. DME’s presence in the Middle East region is established through its affiliated independent legal entities which are licensed to operate and to provide services under the applicable laws and regulations of the relevant country.

 DME’s affiliates and related entities cannot oblige each other and/or DME, and when providing services, each affiliate and related entity engages directly and independently with its own clients and shall only be liable for its own acts or omissions and not those of any other affiliate.

DME provides audit and assurance, tax, consulting, financial advisory and risk advisory services through 25 offices in 14 countries with more than 3,300 partners, directors and staff. It has also received numerous awards in the last few years which include, Middle East Best Continuity and Resilience provider (2016), World Tax Awards (2017), Best Advisory and Consultancy Firm (2016), the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW), as well as the best CSR integrated organization.

The information contained in this press release is correct at the time of going to press.

 

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