Following a 2020 market fallout due to the effects of the pandemic, the global market for Liquefied Natural Gas (LNG) rebounded in 2021 to record a 6% increase despite supply chain constraints and price volatility which continued to hinder sector growth.
According to Shell’s 2022 LNG Outlook, approximately 380 million tons of LNG was traded in 2021, representing a 21 million ton increase from 2020 levels. This increase was largely attributed to the growth in LNG demand as well as exports and imports.
On the export side, the US led export growth with a year-on-year increase of 24 million tons and is expected to become the world’s largest LNG exporter in 2022.
Meanwhile, imports have seen a spike globally. Brazil, for instance, witnessed a three-fold increase in LNG imports as the south American country sought to ensure energy security. China and South Korea also saw an increase, with China, in particular, increasing imports by 12 million tons to 79 million tons. The country now represents the largest importer globally.
Demand for LNG is expected to increase by 90% during 2021 and 2040, driven by the need for viable and sustainable energy supply chains. Specifically, the energy crisis in Europe has already enhanced LNG demand owing to supply disruptions and storage capacity reaching critical levels following heightened winter demand. Additionally, more than 700 million tons of LNG is expected to be traded per annum through to 2040 as the energy transition progresses and energy consumption increases.
Wael Sawan, Integrated Gas, Renewables and Energy Solutions Director at Shell, said: “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 the COVID-19 pandemic.”
“As countries develop lower-carbon energy systems and pursue net-zero emissions goals, focusing on cleaner forms of gas and decarbonization measures will help LNG to remain a reliable and flexible energy source for decades to come.”