Shell: LNG outlook points to potential global supply shortage

The global LNG market has continued to defy expectations of many market observers, with demand rising 29 million tonnes to 293 million tonnes in 2017, according to Royal Dutch Shell Plc’s annual LNG Outlook.

Strong demand growth, says Shell, is consistent with its inaugural LNG Outlook, published last year. “Based on current demand projections, Shell sees potential for a supply shortage developing in mid-2020s, unless new LNG production project commitments are made soon,” the outlook said.

Japan retained its top spot as the world’s largest importer of LNG in 2017, while China nudged into the Number Two spot as Chinese imports surged past those of South Korea.

“Total demand for LNG in China reached 38 million tonnes, a result of continued economic growth and policies to reduce local air pollution through coal-to-gas switching,” Shell’s outlook said.

“We are still seeing significant demand from traditional importers in Asia and Europe, but we are also seeing LNG provide flexible, reliable, and cleaner energy supply for other countries around the world,” said Maarten Wetselaar, integrated gas and new energies director at Shell.

“In Asia alone, demand rose by 17 million tonnes. That’s nearly as much as Indonesia, the world’s fifth-largest LNG exporter, produced in 2017.”

Source: Oil & Gas Journal