Shell sees a potential shortage of LNG supplies as global demand grows

The global market for liquefied natural gas (LNG) has continued to exceed the expectations of many market watchers, with demand for LNG increasing by 29 million tonnes to 293 million tonnes in 2017, according to Shell's annual LNG forecast published in 2017. In view of the increasing demand Shell expects a supply shortfall in 2020 if action is not taken and commitments are made to produce more liquefied natural gas (LNG) in the near term.

Japan remained the world's top importer of liquefied natural gas (LNG) in 2017, while China moved to second place with Chinese imports outpacing South Korea's imports of LNG. China's LNG demand totaled 38 million tons as a result of continued economic growth and policies aimed at Reduce local air pollution by switching from coal to gas.

"We continue to see strong demand from traditional importers in Asia and Europe, but we also see LNG providing a flexible, reliable and clean energy supply to other countries around the world," said Martin Whitsler, Director of Shell Integrated Gas and New Energy.

"Demand has risen by only 17 million tonnes in Asia, and this is almost the amount produced by Indonesia, the fifth largest exporter of LNG in the world, in 2017," he said.

LNG has played a growing role in the global energy system over the past few decades. Since 2000, the number of LNG importing countries has quadrupled, with almost doubling the number of countries providing it. LNG trade increased from 100 million tonnes in 2000 To about 300 million tonnes in 2017, which is enough gas to generate power for about 575 million homes.

LNG buyers continued to sign lower and shorter contracts in 2017. For the first time, the number of spot shipments sold from LNG reached 1,100, equivalent to three shipments delivered daily, mostly from new supplies from Australia and the United States.

There is a growing disparity between buyers and suppliers, and some suppliers are still seeking long-term LNG sales to secure their financial resources as LNG buyers seek shorter, more flexible contracts to compete better in the energy and gas markets.

This disparity needs to be resolved so that LNG project developers can make the final investment decisions necessary to ensure adequate supplies of this clean fuel in the future for the global economy.

Article Credit: https://economy-news.net
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