Last Year's Global LNG Trade Volume 380 Million Tons... "Will Remain a Major Energy Source for Decades"

Shell Announces 'LNG Outlook Report'

"6% Increase YoY Due to Global Economic Recovery"
"Surging Asian Demand... Need to Increase Investment"

[Asia Economy Reporter Moon Chaeseok] Last year, global liquefied natural gas (LNG) trade volume increased by 6% compared to the previous year, reaching 380 million tons. Despite the era of transition to eco-friendly energy, LNG is expected to continue to be a major energy source for decades to come.

Global energy company Shell released an 'LNG Outlook Report' on the 21st (local time) containing these findings. Last year, the increase in LNG demand coupled with supply constraints led to notable price volatility. Europe's LNG inventory levels remained at historically low levels. In particular, in October last year, unprecedented price surges occurred due to difficulties in securing LNG supplies. The report predicted that the gap between LNG demand and supply will widen by the mid-2020s. It especially advised increasing investments to meet the rapidly growing demand in Asia.

Wael Sawan, Shell Vice President of Integrated Gas, Renewables & Energy Solutions, said, "The survey results show that natural gas and LNG became very important energy sources as countries around the world overcame the impacts of COVID-19 and normalized last year," adding, "LNG will continue to be a stable and flexible energy source that supports the transition to clean energy and achieving decarbonization for decades to come."

Despite factory shutdowns caused by the COVID-19 pandemic, LNG exports increased last year. The United States increased exports by 24 million tons compared to the previous year and is expected to become the world's largest exporter this year.

On the import side, South Korea and China stood out. In particular, China recorded LNG imports of 79 million tons last year, an increase of 12 million tons from the previous year, surpassing Japan to become the world's largest LNG importer. According to Shell, Chinese LNG buyers signed new long-term contracts exceeding 20 million tons annually last year. Shell analyzed, "This movement in China indicates that LNG will continue to play an important role in switching the main energy source of key industries from coal to natural gas and achieving carbon neutrality by 2060."

Global LNG demand is expected to grow by 90% this year compared to last year. It is projected to reach 700 million tons annually by 2040. Shell explained, "Asia is expected to drive LNG growth, with key growth factors including declining regional gas production, regional economic growth, and efforts to replace high-carbon energy sources with LNG to meet carbon emission targets."

Shell also explained that the 'intermittency' characteristic of renewable energy, which causes instability in power supply depending on weather or climate, is an important reason for the anticipated increase in LNG demand. Last year in Brazil, due to drought reducing hydropower generation, over 7 million tons of LNG were imported, tripling the usual import volume.

Shell stated, "Last year, efforts to address carbon emissions gained momentum, including increased new investments across the LNG supply chain," adding, "Many countries and companies will need to continue these efforts this year as well."

This content was produced with the assistance of AI translation services.