LNG Outlook 2018
The global liquefied natural gas (LNG) market has continued to defy expectations, growing by 29 million tonnes in 2017, according to Shell's latest LNG Outlook. Based on current demand projections, Shell sees potential for a supply shortage developing in the mid-2020s, unless new LNG production project commitments are made soon.
The Shell LNG Outlook, now in its second year, highlights key trends in 2017 and focuses on future global supply and demand.
It finds that, since the start of the century, the number of countries importing LNG has quadrupled, while the number of countries supplying LNG has almost doubled. LNG trade increased from 100 million tonnes in 2000 to nearly 300 million tonnes in 2017.
The mismatch in requirements between buyers and suppliers is growing. Most suppliers still seek long-term LNG sales to secure financing. But LNG buyers increasingly want shorter, smaller and more flexible contracts so they can better compete in their own downstream power and gas markets.
This mismatch needs to be resolved to enable LNG project developers to make final investment decisions that are needed to ensure there is enough future supply of this cleaner-burning fuel for the world economy.
Strong LNG fundamentals exceeded expectations in 2017
Infographic - accessible version
Infographic - accessible version
External environment creating more opportunities for gas and LNG
- Global energy demand is expected to grow by 30% between 2015 and 2040
- Gas expected to make up over 40% of this growth
- The total length of the world’s natural gas pipelines would stretch to the moon and back eight times
- LNG is the fastest growing gas supply source globally – 1/3 of total gas demand over the next couple of decades is expected to be met by LNG.
- Policy actions for clean energy favour gas
- More than 10 countries in Europe announce coal phase-out ambitions
- Berlin closes local coal-fired power plants to improve air quality
- South Korea's 8th Basic Plan for Energy prioritises renewables and gas, while not sanctioning new nuclear and coal
- G20 endorses the role of natural gas in energy transition
Strong LNG fundamentals exceeded expectations in 2017
- LNG trade reached 293 million tonnes – Enough to power 575 million homes
- LNG imports grew by 29 million tonnes - 30% more than expected
- China becomes world’s second largest LNG importer
- Australia, US and Africa dominated increase in LNG exports
- 1100 Spot cargoes delivered - 17 % increase over last year
Supply investment required to meet long-term demand growth
- Without new investment, supply demand gap could reach as much as 275 million tonnes in year 2035
- Liquefaction investment decisions in the last two years provide for only 7 million tonnes of annual nameplate capacity
- Intermediaries gaining market share for term supply - 45% of term contracts in the last 5 years
Shell LNG Outlooks from other years
Shell LNG Outlooks from other years
Cautionary note
Cautionary note
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