Strong demand for cleaner-burning fuel in Asia continued to drive rapid growth in liquefied natural gas (LNG) use in 2018, with global demand rising by 27 million tonnes to 319 million tonnes, according to Shell’s latest annual LNG Outlook on Monday.
Shell said that global demand is expected to reach about 384 million tonnes in 2020, with a forecast rise of 35 million tonnes in 2019 from which Europe and Asia are expected to absorb all this additional supply.
"A rebound in new long-term LNG contracting in 2018 could revive investment in liquefaction projects. Based on current demand projections, Shell still expects supplies to tighten in the mid-2020s," the company said in a press release.
The report showed that ongoing efforts to improve urban air quality saw China’s imports of LNG surge by 16 million tonnes in 2018, up by 40 percent from 2017.
On the supply side, Australian LNG exports caught up with those of long-time leading supplier Qatar towards the end of 2018 and are expected to rise by 10 million tonnes in 2019.
Shell said that the both countries are well-positioned to supply rapidly developing economies across Asia with gas they need to improve air quality by displacing coal-fired power and heating.
"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," said Integrated Gas and New Energies Director at Shell, Maarten Wetselaar.
"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," he said.
LNG has played an important role in the global energy system over the last few decades, as an increasing number of countries have turned to natural gas to meet their growing energy needs. LNG trade increased from 100 million tonnes in 2000 to 319 million tonnes in 2018.
By Murat Temizer