Global demand for LNG grew by 12.5 per cent to 359mn tonnes in 2019, according to Royal Dutch Shell’s latest annual LNG Outlook
The figure boost LNG’s growing role in the transition to a lower-carbon energy system.
The year 2019 saw major developments that are helping to reshape the industry, namely; an industry record of 40mn tonnes of additional supply becoming available and being consumed by the market; the belief in long-term demand growth triggering record investment decisions in liquefaction capacity of 71mn tonnes; an increase in diversity of contractual structures, providing a wider range of options to LNG buyers and the growing role of gas in improving air quality through coal-to-gas switching in the power and industrial sectors, with coal generation phase-out announcements more than trebling.
Natural gas emits between 45 and 55 per cent fewer greenhouse gas emissions and less than one-tenth of the air pollutants than coal when used to generate electricity.
Maarten Wetselaar, integrated gas and new energies director at Shell, said, “The global LNG market continued to evolve in 2019 with demand increasing for LNG and natural gas in power and non-power sectors. Record supply investments will meet people’s growing need for the most flexible and cleanest-burning fossil fuel.”
“While we see weak market conditions due to record new supply coming in, two successive mild winters and the Coronavirus situation, we expect equilibrium to return, driven by a combination of continued demand growth and reduction in new supply coming on-stream until the mid-2020s,” he added.
Shell outlook revealed that Europe absorbed the majority of 2019 supply growth as competitively-priced LNG furthered coal-to-gas switching in the power sector and replaced declining domestic gas production and pipeline gas imports.
There was a modest rise in imports to Asia in 2019, compared to the previous two years, with China increasing import by 14 per cent as efforts to improve urban air quality.
Over the longer-term, global LNG demand is expected to double to 700mn tonnes by 2040, according to forecasts.
