Asia continued to exceed liquefied natural gas (LNG) import predictions in 2018, according to the Shell LNG Outlook 2019. China led LNG growth last year with almost 16 million tonnes, followed by South Korea, India, and Pakistan. Global demand rose 27 million tonnes to 319 million tonnes. Shell expects growth to continue as the number of LNG-importing countries continues to rise, and forecasts that global LNG demand will reach about 384 million tonnes by 2020.
China overtook Japan as the world’s largest gas importer, with LNG imports increasing by 16 million tonnes in 2018, an increase of 40 per cent in 2017. Coal-to-gas switching in China led to a 176 million-tonne reduction in carbon dioxide emissions by Beijing and surrounding areas. This aligned with views from Martin Houston, Vice Chairman of Tellurian, who predicted Asia’s continued reliance on LNG as a flexible source of cleaner energy.
The report also highlighted the following:
- LNG imports in Asia are estimated to rise to almost 600 billion cubic metres by 2035.
Southeast Asia will import 41 per cent of additional LNG imports to Asia, South Asia will import 35 per cent, and China will import 32 per cent. However, LNG imports in Japan, South Korea and Taiwan are expected to fall by 2035 – by an amount equivalent to eight per cent of Asia’s additional LNG imports.
- LNG supply is expected to increase by 35 million tonnes in 2019.
This additional supply is expected to be absorbed by Asia and Europe. Despite an increase in LNG supply, more supply investment is still needed to avoid an LNG shortfall by the mid-2020s.
- Average length of LNG supply contracts signed more than doubled, from six years in 2017 to 13 years in 2018.
This is an encouraging sign of the long-term prospects of the global LNG market as it could revive investment in liquefaction projects.
The Shell LNG Outlook 2019 was presented by Zee Loh, General Manager, Shell Energy Singapore, at the SIEW 2019 Global Launch, which discussed accelerating transformation toward a more sustainable energy future.
For more insight into the future of LNG, please download the Shell LNG Outlook 2019.