19-02-09 The liquefied natural gas (LNG) market could face over capacity in the next two to three years, delaying investments in new projects, the head of engineering and construction firm Technip said. But gas companies need to keep on investing to prepare for a recovery in energy demand, which will eventually take place, Technip Chief Executive Thierry Pilenko told at a conference on the French company's 2008 financial results.
"The (LNG) market is turning around and becoming a buyers' market," Pilenko said. "We went from a market where demand was very high and capacities were low to a market with important new capacities in Qatar and falling demand."

Pilenko said building multi-billion dollar plants to cool gas to liquid, for transport by tankers, was not economically viable given the sharp fall in gas prices. This trend is particularly acute in the United States, where gas demand is down and new reserves have been found in the form of shale gas wells -- gas trapped in sedimentary rock.
But this should not deter investment, said Pilenko whose company builds LNG plants.

"Even if there is a small period during which LNG may appear unattractive because of the cost of investment and low prices, I think that when demand will rebound, which will necessarily happen, those who made the investments will be extremely well positioned (to benefit from the rebound)."
He said he expected only one or two LNG projects to be awarded to engineering and construction firms globally in 2009.