Demand for LNG in the EU and UK has skyrocketed for Shell
Imports jump 60% in 2022, the energy giant reports
The EU and the UK significantly increased imports of liquefied natural gas (LNG) last year and the trend is expected to continue, leading to structural shifts in the global energy market, British energy giant Shell said. reported in its 2023 LNG forecast released on Thursday.
According to Shell, the EU and UK imported 121 million tonnes of LNG in 2022, up 60% from 2021, as they struggled to find supplies after the effective loss of pipeline gas flows from Russia.
Europe has secured LNG supplies due to falling demand from China and lower imports from South Asia. However, according to Shell, “rapid growth in LNG appetite in Europe” will intensify competition in the global market for limited new supplies in the next two years.
The report noted that increased European demand had already pushed Asian spot LNG prices to record highs of around $70.5 per million British thermal units (mmBtu), causing “volatility in energy markets around the world”.
“The war in Ukraine has had a far-reaching impact on energy security around the world and has caused structural market shifts that are likely to affect the global LNG industry in the long term. It also highlighted the need for a more strategic approach – through longer-term contracts – to ensure reliable supply to avoid price spikes,” said Steve Hill, Shell’s executive vice-president of energy marketing.
Global LNG trade will reach 397 million tons in 2022, an increase of 16 million tons compared to 2021. Shell expects the global LNG market to remain tight until the mid-2020s as Europe and Asia compete for supplies.
“In the near term, the global LNG market is expected to remain tight and subject to supply and demand shocks, with new supplies constrained. Meeting future demand for LNG will require more investment in supply…LNG is an increasingly popular pillar of European energy security, supported by the rapid development of new regasification terminals,” the report said.
Shell expects global demand for LNG to jump to 700 million tonnes by 2040, with a supply-demand gap emerging by the late 2020s.
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(RT.com)
