China overtook Japan to become the world's largest LNG importer and the US became the top LNG exporter in 2023, according to the report entitled 'Fragile Equilibrium: LNG Trade Dynamics and Market Risks'. It was produced by the International Energy Forum and Synmax, a satellite data analytics company.
Joseph McMonigle, Secretary General of the IEF, said: "LNG is in greater demand than ever before and continues to drive economic growth and enhance energy security across the world."
"The versatility of LNG saved Europe from an energy crisis and in Asia, LNG is a vital part of the energy mix. It has helped to lift millions of people out of energy poverty," he added.
LNG, which is supercooled gas shipped on special tankers, today accounts for about 15% of all gas supply worldwide. One of the advantages of LNG over pipeline gas is that it can be transported over large distances, routed to new demand centres at short notice and traded on the open market. This makes LNG particularly in demand at times of market disruption.
Geopolitics has become the most significant driver of remapping LNG trade flows and investment, the report says. Russia's invasion of Ukraine in 2022 transformed energy markets, with Russian gas production falling 21% in the last two years, hitting a 14-year low in 2023.
Faced with the sudden loss of pipeline gas, European buyers turned to LNG to fill the void. Europe's surging demand propelled global LNG prices to unprecedented heights and created a supply squeeze for emerging economies, exacerbating a delicate market situation, the report says. In Europe, LNG's share of gas demand rose from 12% a decade ago to more than 50% and Europe's regasification capacity is expected to grow by another 48% by 2030.
"LNG is now an integral part of Europe's energy mix, acting as a baseload and replacing the role of Russian pipeline gas," the report said. Over the medium term, southeast Asia is expected to become the new LNG import hotspot, with demand poised to double by the end of the decade, driven by Singapore, Vietnam, and the Philippines.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/17112023/record-global-lng-trade-to-grow-another-25-in-5-years/
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