Global demand for liquefied natural gas (LNG) is set to nearly double from 360 million tons last year to 700 million tons by 2040, thanks to continued solid demand from Asia and a rise in gas use for powering hard-to-electrify sectors, Shell said in its annual LNG Outlook 2021 published on Thursday.
Last year, despite the coronavirus pandemic, world LNG demand grew slightly to 360 million tons from 358 million tons in 2019, Shell said.
“LNG provided flexible energy which the world needed during the COVID-19 pandemic, demonstrating its resilience and ability to power people’s lives in these unprecedented times,” Maarten Wetselaar, Integrated Gas, Renewables and Energy Solutions Director at Shell, said in a statement.
LNG and natural gas will play a key role in delivering the energy the world will need to meet net-zero emission targets as gas burns cleaner than coal when used for electricity generation, the manager said.
Asia will account for almost 75 percent of the expected growth in LNG demand through 2040, according to Shell’s estimates.
China, South Korea, and Japan—three of the top ten CO2-emitting countries in the world—have already announced carbon neutrality goals, China by 2060 and Japan and South Korea by 2050.
South Korea, for example, plans to have 24 coal-fired power plants switch to LNG by 2030 and boost renewable energy generation capacity by 300 percent, Shell said.
China’s LNG demand has already recovered from the onset of the pandemic and its imports last year were higher than in 2019. India increased LNG imports by 11 percent year over year in 2020, as it took advantage of lower-priced LNG through most of the year.
“As demand grows, a supply-demand gap is expected to open in the middle of the current decade with less new production coming on-stream than previously projected,” Shell said.
More LNG projects are set to be sanctioned after Qatar approved earlier this year the biggest project in terms of capacity, but analysts warn that LNG buyers would be increasingly looking at the environmental credentials of the proposed projects.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Should You Follow Buffett Into Energy Stocks?
- U.S. Shale’s Struggles Will Be Help OPEC Stabilize Oil Prices
- Goldman Sachs Sees $75 Oil In Q3 2021