By Marwa Rashad
LONDON (Reuters) – Global trade in liquefied natural gas (LNG) in 2021 grew 6% year on year to 380 million tonnes as economies recovered from the economic impact of the COVID-19 pandemic, Royal Dutch Shell said on Monday.
LNG demand is expected to almost double to 700 mln tonnes by 2040, Shell said in its annual LNG market outlook, adding that the liquefied gas has a key role to play to support renewable energy and as a back-up in the event of intermittent supply.
This year’s power price shock has put multiple British energy suppliers go out of business while some elements of heavy industry curtailed output in energy-intensive sectors.
LNG prices lurched from record lows under $2 per mmBtu in 2020 to record highs of $56 in October 2021 as markets struggled to keep pace with global economies recovering from the pandemic.
Benchmark prices currently stand at about $25 per mmBtu.
“Last year showed just how crucial gas and LNG are in providing communities around the world with energy they need as they strived to get back on track following the difficulties caused by COVID-19,” said Wael Sawan, integrated gas, renewables and energy solutions director at Shell.
The company said there is a need for more investment to meet rising LNG demand, especially in Asia, with a supply-demand gap forecast in the mid-2020s.
China and South Korea led growth in LNG demand in 2021. China increased its LNG imports by 12 million tonnes to 79 million and its target to become carbon neutral by 2060 is expected to continue driving up its LNG demand.
Last year Chinese LNG buyers signed long-term contracts for more than 20 million tonnes a year.
LNG exports grew in 2021 despite a number of unexpected outages that dented availability of LNG for delivery. The United States led export growth with a year-on-year increase of 24 million tonnes, the report said.
In a year when China and other large economies in Europe and Asia scrambled to source enough supply for heating and power generation, the United States had plentiful supply that is expected to grow in the coming years.
The U.S. Energy Information Administration projects that U.S. LNG exports will reach 11.5 billion cubic feet per day (bcfd) in 2022, becoming the world’s largest LNG exporter ahead of Australia and Qatar.
(Reporting by Marwa Rashad; editing by Jason Neely and David Goodman)
