Wood Mackenzie's new research on Thursday shows a return to an LNG boom with the construction of projects over the next two years that are expected to reach almost 90 million tonnes per annum (mmtpa).
WoodMac said their new research shows that capital expenditure - for both LNG plants and upstream infrastructure - will total more than $200 billion between 2019 and 2025.
"The LNG boom is back," it said.
"This will provide a major boost to engineering, procurement and construction (EPC) contractors and other providers along the supply chain," the consultancy added.
However, it warned that the LNG industry is notorious for cost overruns and project delays - with just 10% of all LNG projects having been constructed under budget, while 60% have experienced delays.
Senior global LNG research analyst at WoodMac, Liam Kelleher said the many projects jostling for final investment decisions right now have low headline costs, but in light of the historical reality of LNG construction, some project delays are likely.
"While there is a risk that current low LNG prices may see some proposed projects cancelled, Wood Mackenzie believes the risk to new LNG supply development is low and we see considerable upside supply potential," Kelleher noted.
He said that in WoodMac's high scenario case, they anticipate that a further 70 mmtpa could be sanctioned in the next three years.
"Should even some of this materialize, construction would be stretched beyond the height of the 2010-14 boom," he noted.
However, Kelleher contended that the upcoming cycle is not destined to be a replay of the past when cost overruns in the previous boom averaged 33%, while Australian projects overran by 40%.
He anticipates that there will not be similar increases this time around nonetheless, he added that potential for operators and contractors to drop the ball on project delivery still remains.
"There are a number of key differences this time round. Firstly, the global spread of projects will mean that the local inflation pressure, particularly in terms of manpower, which hit Australia and the U.S. in previous cycles, is lessened. Secondly, developers are also being more cautious about LNG development solutions, opting for modularization and capex phasing. This, coupled with renewed caution with investment programs across the upstream sector, should help limit global upstream inflation," he said.
By Murat Temizer