Global demand for liquefied natural gas (LNG) to reach 384 million tonnes in 2020 – Shell LNG Outlook 2019

Shell LNG Outlook 2019

(PRESS RELEASE) THE HAGUE, 25-Feb-2019 — /EuropaWire/ — According to Shell’s LNG Outlook for 2019 the global demand for liquefied natural gas (LNG) will reach 384 million tonnes by 2020. The use of LNG in 2018 around the world has also grown by 27 million tonnes reaching already 319 million tonnes.

2019 will also see a rise of the LNG supply globally and according to the report the growth will be in the 35 million tonnes range as Europe and Asia seen as the places this additional supply will go to.

The strong LNG demand is mainly driven by the need for cleaner air in Asia. China’s imports of LNG have surged by 16 million tonnes in 2018 alone, which is an increase of 40% from 2017.

In general, LNG projects do require long-term sales agreements to secure financing. However, in the past years (2014 – 2017) LNG buyers have increasingly been looking for shorter, smaller and more flexible contracts. In its LNG Outlook 2018, Shell has warned that this gab between suppliers and buyers needs have to be closed in order for the developers to go ahead with new projects. Positively, the average length of contracts signed has more than doubled from 6 years on average in 2017 to about 13 years in 2018. At the same time, the total contracted volume has also more than doubled in 2018 to reach almost 600 million tonnes.

Nonetheless, Shell still expects supplies to tighten in the mid-2020s based on the current demand projections.

Furthermore, Australia is becoming a major LNG exporter and the country is expected to increase its production by 10 million tonnes in 2019. Qatar, long-time leader in LNG supplies, and Australia are both well-positioned to meet the demand rapidly developing economies across Asia have for gas, which is used to replace coal-fired power and heating aimed at improving air quality.

Maarten Wetselaar, Integrated Gas and New Energies Director at Shell:

“The continued surge in Chinese LNG imports has helped improve air quality in some of its biggest cities over the last few years. China’s success in making the air cleaner for millions of people shows the critical role that natural gas can play in providing more and cleaner energy around the world.”

“We saw Asian LNG demand growth exceed expectations again in 2018 and we expect this strong growth to continue. Investment in new supply projects is picking up, but more will be needed soon.”

An increasing number of countries have turned to natural gas to meet their growing energy needs over the past decades growing the importance of LNG in the global energy system. In 2000, the LNG delivered was around 100 million tonnes while in 2018, 8 years later, the supplies have already reached 319 million tonnes.

The full outlook can be found over the link below:

shell.com/energy-and-innovation/natural-gas/lng…

SOURCE: Royal Dutch Shell plc