LONDON, June 26, 2024 /PRNewswire/ -- Released today, the
IGU's 15th annual World LNG Report finds that global LNG
trade grew by 2.1% in 2023, surpassing 401 million tonnes (MT).
This global market now connects 20 exporting with 51 importing
markets, while supply is currently the primary growth- limiting
factor. After two years of severe turbulence, the LNG market
has a newfound but fragile equilibrium, given lack of spare supply
in the near-term.
LNG has become a critical component of the global energy
mix, with its role as a flexible, highly efficient, and
reliable resource continuing to grow, and as such, decarbonising
the LNG value chain is a priority for many stakeholders in the
industry. Several proposed projects are undertaking innovative
emissions-reducing measures to meet this need by integrating
renewable electricity, carbon capture and storage, partnering to
develop e-methane, and grow bio-LNG, or liquefied biomethane, which
is produced from capturing and upgrading biogas that would have
otherwise been emitted from landfills, agricultural waste, or other
feedstock.
LNG receiving capacity growth has been shaping
market development over the past 24 months, as it reached an
impressive 1,029.9 MTPA at the end of February 2024, adding almost 70 MTPA in 2023 and
making it the highest year of new additions since 2010.
Europe saw the greatest addition
of 30 MTPA, followed by Asia's 26.9 MTPA and Asia Pacific's 13 MTPA. The Philippines and Vietnam joined the club of LNG importers in
2023 for the first time.
Supply remained constrained, with just 0.8% YOY growth
from Indonesia's 3.8 MTPA addition
at Tangguh LNG. However, global liquefaction capacity is likely to
grow to over 700 MTPA by 2030, driven by new FIDs and the start-up
of projects currently under construction to support growing demand,
particularly in the growing Asian markets, where coal to gas
switching is important decarbonization and air quality improvement
strategy.
LNG exports were dominated by the US, which became the
largest producer and exporter (84.53 MT in 2023 vs 75.63 MT in
2022), followed by Australia
(79.56 MT), Qatar (78.22 MT), and
Russia (31.36).
2023 saw spot LNG prices declining to levels
palatable for recovery of import growth in Asia, as Platts JKM averaged $13.86/mmBtu during the year, while average
annual price volatility has significantly reduced from 2022 levels
but remains above pre-crisis. China came back as the largest LNG importer at
71.19 MT, Japan and Korea remained
second and third despite annual declines, and India came back to the fourth position, with
more demand responding to the lower spot price. Europe also cemented its role as an LNG
importing heavyweight, maintaining the second-largest importing
region spot at 121.29 MT in 2023. With LNG supplying almost
half of Europe's gas, the
competition between Asian and European markets remains as key
market dynamic.
Global LNG market continues to rapidly evolve as it
responds to growing gas demand in emerging markets, increasing
number and diversification of market participants, and the
acceleration of technology development and innovation. LNG industry
is no longer a game only for big markets or big companies, with
portfolio players playing an increasingly more important
role. In 2023, about 180 companies were involved in LNG
deliveries under term contracts, while about 35% of the
transactions were spot-priced.
However, several major uncertainties confront the
supply-constrained market, contributing the fragility of its
current equilibrium. Key sources of this uncertainty include:
the Biden Administration non-FTA LNG project approvals pause, which
could delay over 70 MTPA of new capacity; sanctions on Russian LNG,
which impact almost 20 MTPA of expected capacity; the possibility
that Ukraine may not extend the
Russian gas transit deal at the end of 2024; shipyard bottlenecks;
the ongoing security risk in the Middle
East; as well as some declining gas field supply. Over 120
MTPA of currently operational liquefaction capacity is over 20
years old, and some of these facilities are being mothballed due to
insufficient upstream gas production, which calls for attention to
the supply side risk.
IGU President, Li Yalan
stressed:
The LNG industry has demonstrated incredible agility and
innovation through some of the toughest tests over the recent
years, and this is an industry that continues to play a pivotal
role to navigate through an energy crisis that has not yet been
fully resolved and an energy transition that has been
challenged.
As the world moves toward a low emissions future, nations are
seeking ways to achieve their climate commitments while keeping
energy affordable, available, and secure. LNG is a tool that will
be critical to providing greater resiliency for rapidly changing
energy systems around the world, and it will have an essential role
mitigating the inherent risk of uncertainty through that
process.
Download Full Report Here
About the Report
Leveraging the IGU's vast global gas value chain network across 80 countries, the report provides
the most authoritative public data and analysis on LNG trade,
price, liquefaction, regasification, shipping,
bunkering, as well as key developments impacting the global LNG market.
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