According to Shell’s latest annual LNG Outlook published on 25-Feb-2021:

 

* Global LNG trade increased to 360 MMT in 2020, despite the unprecedented volatility caused by the COVID-19 pandemic which resulted in lockdowns around the world. Demand in 2019 stood at 358 MMT.

 

* Though marginal [0.56% YoY], the increase in volume reflects the resilience and flexibility of the global LNG market in 2020, a year which saw losses to global GDP of several trillion dollars as economies large and small struggled to contain the COVID-19 outbreak.

 

* Global LNG prices hit a record low early in the year but ended the 12-month period at a six-year high as demand in parts of Asia recovered and winter buying increased against tightened supply.

 

* 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.

 

* As the cleanest-burning fossil fuel, natural gas and LNG have a central role to play in delivering the energy the world needs and helping power progress towards these targets. Natural gas emits between 45% and 55% fewer greenhouse gas emissions and less than one-tenth of the air pollutants than coal when used to generate electricity.

 

* China and India led the recovery in demand for LNG following the outbreak of the pandemic. China increased its LNG imports by 7 MMT to 67 MMT (11% up YoY). China’s heavy-duty transport sector consumed nearly 13 MMT of LNG in 2020, almost doubling from 2018, to serve the fast-growing fleet of well over 500,000 LNG-fuelled trucks and buses.

 

* India increased imports by 11% in 2020 as it took advantage of lower-priced LNG to supplement its domestic gas production.

 

* Demand in Europe, alongside flexible US supply, helped to balance the global LNG market in the first half of 2020. However, supply outages in other basins, structural constraints and extreme weather later in the year resulted in higher prices.

 

 

Outlook:

* Overall, global LNG demand is estimated to hit 700 MMT by 2040. Asia is expected to drive nearly 75% of this growth as domestic gas production declines and LNG substitutes higher emission energy sources, tackling air quality concerns and meeting emissions targets. LNG-fuelled shipping is also growing, with the number of vessels expected to more than double and global LNG bunkering vessels set to reach 45 by 2023.

 

* 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. Just 3 MMT in new LNG production capacity was announced in 2020, down from an expected 60 MMT.

 

* The LNG industry will need to innovate at every stage of the value chain to lower emissions and play a key role in powering hard-to-abate sectors.