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Global liquefied natural gas demand is set to surge by 90 percent by 2040 compared to 2021 to exceed 700 million tons annually in two decades, as LNG and gas will continue to play an important role in energy supply, Shell, one of the top LNG traders, said in its annual industry outlook on Monday.
LNG trade worldwide jumped by 6 percent in 2021 to 380 million tons as economies recovered from the pandemic, and shortages of energy supply led to record-high gas prices in Europe and Asia, Shell said.
“Prices reached record levels in October 2021 as Europe, with historically low storage levels, struggled to secure LNG cargoes to meet expected winter gas demand,” Shell said.
Also last year, China surpassed Japan to become the biggest LNG importer in the world, with 79 million tons of the fuel imported, according to Shell’s review of 2021 and the outlook for the near and longer-term.
Asia will account for most of the increase in LNG demand through 2040, considering that natural gas production in many Asian countries will decline, while regional economies will grow and LNG will replace more polluting energy sources, Shell said. Around 70 percent of the total growth in global LNG demand through 2040 will come from Asia.
“As countries develop lower-carbon energy systems and pursue net-zero emissions goals, focusing on cleaner forms of gas and decarbonisation measures will help LNG to remain a reliable and flexible energy source for decades to come,” said Wael Sawan, Integrated Gas, Renewables and Energy Solutions Director at Shell.
Back to the 2021 review, Shell noted that the United States-led LNG export growth with an increase of 24 million tons.
In recent weeks, U.S. LNG exports have been soaring to record levels and are expected to continue to surge as more export capacity comes online. The energy crisis in Europe with historically low inventories, lower-than-typical Gazprom supply, and geopolitical tensions have made U.S. LNG profitable in Europe, where natural gas prices are now much higher than the U.S. benchmark Henry Hub prices.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.