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IGU upbeat on global LNG outlook

The International Gas Union’s annual LNG report is upbeat on the outlook for global LNG, and
has talked up the role the fuel will play in post-pandemic recovery and the energy transition

COMMENTARY THE International Gas Union (IGU) has pub- of 1.4mn tonnes on 2019, the IGU noted that the
lished its annual report on global LNG, which growth had come despite the disruption and
shows that the group is bullish on the fuel’s pros- depressed demand caused by the pandemic. The
WHAT: pects as the world recovers from the coronavirus rise was mostly attributed to increased exports
The IGU is bullish about (COVID-19) pandemic. Indeed, the group has from Australia and the US, which added a com-
the post-pandemic pointed to LNG’s resilience during the worst of bined 13.4mn tonnes per year (tpy) of exports.
prospects for global LNG. the pandemic last year, and has talked up its role Meanwhile, Asia again accounted for the
in post-pandemic recovery. largest share of imports, at 70% of the total, as
WHY: The IGU also believes that LNG has a key well as being responsible for the largest rise in
The group expects LNG to role to play in the energy transition, saying that imports in 2020, up 9.5mn tpy compared with
play a major role in both gas in all forms is “imperative” to help individ- 2019. This was led by China with 7.2mn tonnes
post-COVID-19 recovery ual countries meet their decarbonisation goals. of new import demand, with the country having
and the energy transition. It has called for further LNG infrastructure locked down and reopened early in response to
development, saying this would provide a “crit- the pandemic.
WHAT NEXT: ical foundation” for a sustainable recovery from Global liquefaction capacity also continued
There is 892.4mn tpy of COVID-19. to grow in 2020, with 20mn tpy of capacity added
liquefaction capacity to reach a total of 452.9mn tpy. The IGU noted
awaiting final investment Resilience that all of the new capacity that came online
decisions, according to The IGU’s previous LNG report was published last year was located in the US. Some planned
the IGU. in the relatively early days of the pandemic, amid start-ups were delayed by the pandemic, how-
concern over the impact it would have on global ever, including in the US, Russia, Malaysia and
demand and the ability of supply chains to keep Indonesia, and thus global liquefaction capacity
functioning. However, the group said that the would have been even higher now had it not
LNG industry had adjusted to the demand fluc- been for the pandemic.
tuations caused by COVID-19 lockdowns with The average global utilisation rate in 2020 was
“incredible agility”, and supply had continued 74.6%, spiking at the end of the year alongside
uninterrupted. Asian spot prices and demand for LNG. This
Global LNG trade even rose in 2020 to reach helped offset the impact of nearly 160 cargo can-
356.1mn tonnes. While this was only an increase cellations earlier in the year, especially during

P4 www. NEWSBASE .com Week 23 10•June•2021