Global demand for LNG is expected to double to 700mn tonnes by 2040, according to Royal Dutch Shell
Shell’s latest annual LNG Outlook stated that Asia is expected to remain the dominant region in the decades to come, with South and South-east Asia generating more than half of the increased demand.
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.”
The Shell outlook showed that 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.
“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.
In 2019, global LNG demand grew by 12.5 per cent to 359mn tonnes. 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, a result of mild weather and rising electricity generation from nuclear power in Japan and South Korea, two of the three largest global importers.
In China, LNG imports increased by 14 per cent in 2019 as efforts continued to improve urban air quality. Also notable was LNG demand growth in South Asia. In total, Bangladesh, India and Pakistan imported 36mn tonnes, an increase of 19 per cent over last year, pointing to emerging growth countries in Asia.