Small-Scale LNG Market in Europe: Analysis of Volumes, Players and Prices to 2025

Energy & Utilities | Economic Consulting

December 11, 2020

LNG Storage Tanks

FTI Consulting conducted a review of the small-scale LNG market in Europe that covered 14 countries and six market segments served by LNG trucks and ISO-containers.

Based on multiple interviews and proprietary market modelling, we forecast a growing demand across Europe, supported by increased small-scale LNG availability, contractual standardization, as well as sustained price and environmental advantages against oil products.

Key findings of the study

Small-scale LNG segmentation

The small-scale LNG market is a collection of niche demand segments that serve either stationary energy end-user (industry & residential), or mobile energy end-use (transport), via two products: LNG or CNG from LNG (L-CNG).

Past demand and drivers for growth

The small-scale LNG market, as defined in our study, has grown by around 5% p.a. over the last decade, driven by both price advantage and environmental benefits when compared to alternative oil products.

Demand forecasts to 2025

We estimate that small-scale LNG demand could increase by 17% p.a. between 2020 and 2025, with the LNG for heavy-duty trucks being the fastest growing segment.

Small-scale LNG contracts

The market remains bespoke and fragmented, with limited strandardisation in contracts. Nevertheless, several patterns are emerging, with margin levels steadily declining as market maturity develops, and an increasing reliance on gas index pricing.

Competition

Competition is intensifying in the growing small-scale LNG market. Suppliers have entered from various adjacent industries with also some pure small-scale LNG players developing, without yet a consensus in the optimal footprint in terms of product and country mix.


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