Shell’s latest annual LNG Outlook said global demand for LNG grew by 12.5% to 359 million tons in 2019, “bolstering LNG’s growing role in the transition to a lower-carbon energy system”.
Maarten Wetselaar, Integrated Gas and New Energies Director at Shell, said: “The global LNG market continued to evolve in 2019 with demand increasing for LNG and natural gas in power and non-power sectors. Record supply investments will meet people’s growing need for the most flexible and cleanest-burning fossil fuel.”
It listed key industry developments in the update, which included:
- An industry record of 40 million tons of additional supply becoming available and being consumed by the market.
- The belief in long-term demand growth triggering record investment decisions in liquefaction capacity of 71 million tons.
- An increase in diversity of contractual structures, providing a wider range of options to LNG buyers.
- The growing role of gas in improving air quality through coal-to-gas switching in the power and industrial sectors, with coal generation phase-out announcements more than tripling.
- 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.
It said new spot-trading mechanisms and a wider variety of indices used for long-term contracts point towards LNG becoming an increasingly flexible commodity.
Over the longer-term, global LNG demand is expected to double to 700 million tons by 2040, according to forecasts, as gas plays a significant role in shaping a lower-carbon energy system.
For more information visit www.shell.com