Page 9 - GLNG Week 42

GLNG COMMENTARY GLNG

IEA highlights LNG’s

role in gas market

The International Energy Agency has highlighted

the role of LNG in the global gas market in recently

released annual reports

PERFORMANCE THE International Energy Agency (IEA) last Balancing role
week highlighted the role of LNG in adjusting to The IEA noted that LNG remains central to
WHAT: a drop in global gas demand in the wake of the ensuring the security of global gas supplies,
The IEA has highlighted coronavirus (COVID-19) pandemic. The agency adding that the super-chilled fuel played a
the current and future published its World Energy Outlook 2020 and its major role in the market’s adjustment after the
role of LNG in recently Global Gas Security Review last week, with LNG coronavirus (COVID-19) induced gas demand
published reports. featuring significantly in both. crash. Monthly global exports of LNG fell by
The discussions of LNG came within the 17% between January and July 2020, the agency
WHY: context of a more bullish outlook for gas than said, discussing the role the industry is playing in
The agency said LNG for oil. The IEA forecast that global gas demand balancing gas markets. LNG contracting activity
was increasingly playing would decline by only 3% this year, though this collapsed from a high of 95 bcm in 2018 to about
a role in balancing gas would still represent its biggest contraction since 35 bcm in the first nine months of 2020.
markets. emerging as a major fuel in the 1930s. In the “Since the IEA started tracking flexibility in
longer term, under the IEA’s Stated Policies Sce- LNG markets in the first edition of the Global
WHAT NEXT: nario (STEPS), which is based on current policy Gas Security Review five years ago, we have seen
Gas is expected to intentions and targets, gas is forecast to have a a notable improvement across a range of LNG
recover quicker than oil, 25% share of the global primary energy mix in market flexibility metrics. This is improving
but the IEA has warned 2040, versus 23% last year. security of supply and was critical in enabling the
that European demand However, under STEPS, European gas market to adjust to the historic demand shock
will never return to pre- demand is forecast to never again reach the level witnessed in the first half of 2020,” the IEA’s exec-
pandemic levels. it did before the pandemic. The scenario has the utive director, Fatih Birol, said in a statement.
continent’s consumption falling from 606bn In the World Energy Outlook, meanwhile,
cubic metres in 2019 to 598 bcm in 2025, 570 the agency noted that a record year of approvals
bcm in 2030 and 536 bcm in 2040. This marks for new liquefaction projects in 2019 had now
the first time the IEA’s STEPS case has projected been followed by a year with no new projects
that European gas demand is past its peak. green-lit – and none likely by the end of 2020.

Week 42 23•October•2020 www. NEWSBASE .com P9