Shell plc's 2024 outlook for the liquefied natural gas (LNG) industry reveals significant trends in the global LNG market. Demand is expected to surge by more than 50% by 2040, driven by factors such as Asian industries switching from coal to LNG and economic growth leading to higher energy consumption.

LNG plays a crucial role in complementing renewable energy sources, such as wind and solar power, especially in countries with a high proportion of renewable energy usage due to its intermittence. Having LNG as an energy production supplement helps maintain short-term flexibility and long-term stability of supply. Shell, one of the leading global energy companies, shared its perspectives and updates in its LNG Outlook 2024, highlighting the demand and importance of LNG for energy security and carbon emission reduction. The report also forecasts trends and growth opportunities for LNG in the Asia-Pacific region. This was discussed at the recent FUTURE LNG ASIA: Accelerating Innovation to Drive Asia’s Energy Transition event.

Mr. Jefferson Edwards, Vice President for Global Market Analytics at Shell LNG Marketing and Trading
Mr. Jefferson Edwards, Vice President for Global Market Analytics at Shell LNG Marketing and Trading.

Mr. Jefferson Edwards, Vice President, Global Market Analytics, Shell LNG Marketing and Trading, emphasized the importance of LNG in the Asian region. While currently only accounting for 14% of the global natural gas consumption, LNG plays a crucial role in enhancing energy security and reducing carbon emissions simultaneously. This is especially significant in South and Southeast Asia, where domestic natural gas production in many countries is declining. LNG is projected to account for approximately 75% of all new natural gas sources in Asia until 2040 and will surpass domestic gas production as the largest energy source in Asia by 2030.

“The increased interest in LNG stems from significant investments in wind and solar energy by Asian countries, leading to a higher proportion of variable electricity generation. This requires a stable production source to balance the power grid. Considering the growing limitations of coal-fired power generation across Asia, which results in substantial carbon emissions, LNG has become a preferred choice for maintaining the balance of the electricity production process,” said Edwards.

According to Shell's LNG Outlook 2024 report, global LNG trade reached 404 million tons in 2023, an increase from 397 million tons in 2022. This increase points to positive market expansion. However, supply constraints continue to impact price levels, resulting in ongoing price volatility, which remains high compared to the past. China is expected to lead the demand for LNG this decade, driven by its industry’s efforts to reduce carbon emissions by shifting from coal to gas.

In addition, the export of natural gas via pipelines from Russia to Europe significantly decreased in 2022, leading Europe to primarily rely on LNG to maintain energy security. The construction of new regasified natural gas stations also helps Europe diversify its supply sources.

The growth of the global LNG market is a positive sign of changes in the energy industry, highlighting its role under the interest of carbon emission reduction and the use of cleaner energy.

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