GLNG: Shell warns that LNG market will remain tight in 2022

Shell said on February 21 it expected the global LNG market to remain tight in 2022, after a 6% climb in demand last year.
In its latest LNG outlook, the super-major said that growing demand in China and South Korea drove the increase in consumption last year, with China raising its imports by 12mn tonnes to 79mn tonnes, surpassing Japan as the world’s largest buyer. Chinese LNG buyers signed long-term contracts for more than 20mn tonnes per year (tpy) of supply during 2021.
Exports grew last year in spite of various outages, including in Australia and Norway, thanks to a surge in US deliveries of 24mn tonnes. This means the US is on track to become the world’s largest exporter this year.
“Last year showed just how crucial gas and LNG are in providing communities around the world with energy they need as they strive to get back on track following the difficulties caused by the COVID-19 pandemic,” Shell’s director for integrated gas, renewables and energy solutions, Wael Sawan, commented. “As countries develop lower-carbon energy systems and pursue net-zero emissions goals, focusing on cleaner forms of gas and decarbonisation measures will help LNG to remain a reliable and flexible energy source for decades to come.”
To avoid future price spikes, Shell said a more strategic approach was needed to ensure that gas supply remains reliable and flexible in the future. It forecast that an LNG supply-demand gap was expected to emerge in the mid-2020s, stressing the need for extra investment to meet rising demand, particularly in Asia.