Global LNG demand is expected to double to 700 million tonnes by 2040, according to the Shell LNG Outlook 2020 report on Thursday.
This doubling of demand was due to gas playing a significant role in shaping a lower-carbon energy system, it explained.
"Asia is expected to remain the dominant region in the decades to come, with South and South-east Asia generating more than half of the increased demand, it added.
Shell in its report revealed that 2019 saw key developments that helped to reshape the industry:
- The availability of an industry record of 40 million tonnes of additional supply, which is being consumed by the market.
- The belief in long-term demand growth triggering record investment decisions in liquefaction capacity of 71 million tonnes.
- An increase in diversity of contractual structures, providing a wider range of options for LNG buyers.
- The growing role of gas in improving air quality through coal-to-gas switching in the power and industrial sectors, with coal generation phase-out announcements more than trebling.
The report hailed natural gas as a less pollutant electricity generator compared to coal by emitting between 45% and 55% fewer greenhouse gas emissions and less than one-tenth of the air pollutants.
Maarten Wetselaar, the integrated gas and new energies director at Shell, said the global LNG market continued to evolve further in 2019 with demand increasing for LNG and natural gas in the power and non-power sectors.
"Record supply investments will meet people’s growing need for the most flexible and cleanest-burning fossil fuel," he declared.
Wetselaar cited the market entrance of record new supply, two successive mild winters and the Coronavirus situation as reasons for the current, weak market conditions.
However, he added "we expect equilibrium to return, driven by a combination of continued demand growth and reduction in new supply coming on-stream until the mid-2020s."
According to Shell, new spot-trading mechanisms and a wider variety of indices used for long-term contracts show that LNG is becoming an increasingly flexible commodity.
The company reported the modest rise in imports to Asia in 2019, compared to the previous two years, a result of mild weather and rising electricity generation from nuclear power in Japan and South Korea -- two of the three largest global importers.
In China, LNG imports increased by 14% in 2019 as efforts continued to improve urban air quality, Shell said.
By Murat Temizer