USA: LPG Global Demand Surpasses Supply According To Shell

USA: LPG Global Demand Surpasses Supply According To Shell

With demand growing by 29 million tonnes to 293 million tonnes in 2017, the global liquefied natural gas (LNG) market has continued to challenge expectations of many market observers, as per Shell’s annual LNG Outlook.

Published in 2017, this strong growth in demand is consistent with Shell’s first LNG Outlook. Unless new LNG production project commitments are made soon, according to current demand projections, Shell envisions potential for a supply shortage developing in mid-2020s.

As Chinese imports surged past South Korea’s, China moved into second place, with Japan remaining the world’s largest LNG importer in 2017. A result of continued economic growth and policies to reduce local air pollution through coal-to-gas switching, total demand for LNG in China reached 38 million tonnes.

Maarten Wetselaar, Integrated Gas and New Energies Director at Shell said, “We are still seeing significant demand from traditional importers in Asia and Europe, but we are also seeing LNG provide flexible, reliable and cleaner energy supply for other countries around the world. In Asia alone, demand rose by 17 million tonnes. That’s nearly as much as Indonesia, the world’s fifth-largest LNG exporter, produced in 2017.”

Over the last few decades, LNG has played an increasing role in the global energy system. The number of countries importing LNG has quadrupled, with the number doubling of the countries supplying it. In 2000, LNG trade increased from 100 million tonnes to nearly 300 million tonnes in 2017, which is sufficient gas to generate power for around 575 million homes.

Shorter and smaller contracts continued to be signed by LNG buyers. The number of LNG spot cargoes sold reached 1,100 for the first time in 2017 equivalent to three cargoes delivered every day, and this growth mostly came from new supply from Australia and the USA.

There is a growing mismatch in requirements between buyers and suppliers with most suppliers still seeking long-term LNG sales to secure financing. However, shorter, smaller and more flexible contracts are increasingly sought by LNG buyers so they can better compete in their own downstream power and fuel markets.

In order to ensure there is enough future supply of this cleaner-burning fuel for the world economy, this mismatch needs to be resolved to enable LNG project developers to make final investment decisions. PWKD28022018

Last modified onWednesday, 28 February 2018 00:44
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