Global LNG trade revives in 2021 despite supply crunch, volatile prices

The growth in exports was seen amid several unforeseen disruptions, which impacted the LNG available for delivery. The United States led the export growth with a year-on-year increase of 24 million tonnes and is expected to become the world’s largest LNG exporter in 2022.

As per Shell’s latest annual LNG outlook, rising LNG demand coupled with supply constraints, gas and LNG prices remained volatile throughout the year. Prices hit record levels in October 2021, as Europe, with historically low storage levels, struggled to secure LNG cargoes to meet expected winter gas demand.

Volatility emphasizes the need for a more strategic approach to secure reliable and flexible gas supplies to avoid the risk of price increases in the future. According to the report, the LNG supply-demand gap is projected to emerge in mid-2020 and focuses on increasing supply and the need for more investments to meet the growing demand for LNG.

Integrated Gas, Renewables and Well Savannah said, “Last year demonstrated how important gas and LNG are in providing energy to communities around the world, as they look to get back on track after the hardships caused by the COVID-19 pandemic.” Let’s try.” Director of Energy Solutions at Shell.

He noted that as countries develop low-carbon energy systems and pursue net-zero emissions targets, a focus on cleaner forms of the gas and decarbonization measures will make LNG a reliable and resilient energy source for decades to come. It will help you stay.

China and South Korea led the growth in LNG demand in 2021. China increased its LNG imports by 12 million tonnes to 79 million tonnes, making Japan the world’s largest LNG importer.

Chinese LNG buyers signed long-term contracts worth more than 20 million tonnes annually during 2021, indicating LNG’s ongoing role in coal-to-gas switching in key sectors and its ambition to be carbon neutral by 2060. help to reach.

Overall, global LNG demand is expected to exceed 700 million tonnes per annum by 2040, a 90% increase over 2021 demand. As domestic gas production declines, regional economies grow and LNG replaces high-emission energy sources, helping to address concerns over air quality and aiding progress toward carbon emissions targets.

LNG has an important role to play in advancing the use of renewable energy and as a backup in case of intermittent supply. Brazil, for example, tripled its imports of LNG during 2021 – more than 7 million tonnes – due to persistent dry weather leading to weak hydropower generation.

Successful efforts to reduce emissions from natural gas and develop cleaner routes will strengthen this role. The report said that during 2021, momentum picked up to decarbonize the LNG value chain with several announcements around investments to address emissions.