Monday 26 February 2018

Shell expects potential global LNG supply shortage

Shell sees a potential supply shortage of liquefied natural gas (LNG) developing in the mid-2020s as global demand surges.

Its latest annual LNG Outlook states demand in the global market grew by 29 million tonnes to 293 million tonnes last year and based on current projections, there could be a shortage unless new production commitments are made soon.

LNG trade increased from 100 million tonnes in 2000 to nearly 300 million tonnes in 2017 -  enough gas to generate power for around 575 million homes.

Japan remained the world’s largest LNG importer in 2017, while China moved into second place as Chinese imports surged past South Korea’s imports.

The report suggests LNG buyers continued to sign shorter and smaller contracts, adding: "The mismatch in requirements between buyers and suppliers is growing. Most suppliers still seek long-term LNG sales to secure financing. But LNG buyers increasingly want shorter, smaller and more flexible contracts so they can better compete in their own downstream power and gas markets."