LNG has bright future says Shell’s annual LNG Outlook

LNG has bright future says Shell’s annual LNG Outlook

Shell’s latest annual LNG Outlook said global demand for LNG grew by 12.5% to 359 million tons in 2019,  “bolstering LNG’s growing role in the transition to a lower-carbon energy system”.

Maarten Wetselaar, Integrated Gas and New Energies Director at Shell, said: “The global LNG market continued to evolve in 2019 with demand increasing for LNG and natural gas in power and non-power sectors. Record supply investments will meet people’s growing need for the most flexible and cleanest-burning fossil fuel.”

It listed key industry developments in the update, which included: 

  • An industry record of 40 million tons of additional supply becoming available and being consumed by the market.
  • The belief in long-term demand growth triggering record investment decisions in liquefaction capacity of 71 million tons.
  • An increase in diversity of contractual structures, providing a wider range of options to LNG buyers.
  • The growing role of gas in improving air quality through coal-to-gas switching in the power and industrial sectors, with coal generation phase-out announcements more than tripling.
  • Natural gas emits between 45 and 55% fewer greenhouse gas emissions and less than one-tenth of the air pollutants than coal when used to generate electricity.

It said new spot-trading mechanisms and a wider variety of indices used for long-term contracts point towards LNG becoming an increasingly flexible commodity.

Over the longer-term, global LNG demand is expected to double to 700 million tons by 2040, according to forecasts, as gas plays a significant role in shaping a lower-carbon energy system. 

For more information visit www.shell.com 

24th February 2020