(The Philippine Star) - March 9,
2020 - 12:00am
MANILA, Philippines — Global demand
for liquefied natural gas grew by 12.5 percent to 359 million tons in 2019,
according to Shell’s latest annual LNG Outlook, a significant increase that
bolsters LNG’s growing role in the transition to a lower-carbon energy system.
Last year saw key developments that
are helping to reshape the industry, namely;
•
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 trebling.
Natural gas emits between 45 and 55
percent fewer greenhouse gas emissions and less than one-tenth of the air
pollutants than coal when used to generate electricity.
“The global LNG market continued to
evolve in 2019 with demand increasing for LNG and natural gas in power and
non-power sectors,” said Maarten Wetselaar, integrated gas and new energies
director at Shell. “Record supply investments will meet people’s growing need
for the most flexible and cleanest-burning fossil fuel.”
“While we see weak market conditions
today due to record new supply coming in, two successive mild winters and the
coronavirus situation, we expect equilibrium to return, driven by a combination
of continued demand growth and reduction in new supply coming on-stream until
the mid-2020s.”
Europe absorbed the majority of 2019
supply growth as competitively-priced LNG furthered coal-to-gas switching in
the power sector and replaced declining domestic gas production and pipeline
gas imports.
New spot-trading mechanisms and a
wider variety of indices used for long-term contracts point towards LNG
becoming an increasingly flexible commodity.
There was a modest rise in imports
to Asia in 2019, compared to the previous two years, a result of mild weather
and rising electricity generation from nuclear power in Japan and South Korea,
two of the three largest global importers.
In China, LNG imports increased by
14 percent in 2019 as efforts continued to improve urban air quality.
Also notable was LNG demand growth
in South Asia. In total, Bangladesh, India and Pakistan imported 36 million
tons, an increase of 19 percent over last year, pointing to emerging growth
countries in Asia.
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.
Asia is expected to remain the
dominant region in the decades to come, with South and Southeast Asia
generating more than half of the increased demand.
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