The global demand for liquefied natural gas (LNG) will outpace supplies by mid-2020s, according to the Shell LNG Outlook 2020. Global LNG demand is estimated to double to 700 million tonnes by 2040.
There may also be an expected global supply shortage of LNG in mid-2020s and this assumption has resulted in a record number of final investment approvals, the Shell outlook said. The record number of FIDs may help delay the expected supply-demand gap and cushion the impact of LNG shortage.
Shell interpretation of Wood Mackenzie and IHS Markit 2019 data assessed that incremental domestic production will be a fraction of South Asia gas supply growth. India will be the largest importer amongst South Asian countries such as Pakistan, Bangladesh and Sri Lanka. LNG demand is expected to grow from a little under 25 million tonnes in fiscal 2018-2019 to over 50 million tonnes by 2040.
The highest demand growth for LNG will come from China and India. By 2040, China’s gas supply is expected to grow multi-fold with 33 per cent of the incremental gas supplies coming through the LNG route. During the 2020 to 2025 period, it is expected that 17 per cent of incremental gas supplies in China will come through LNG, the Shell outlook added.
“The global LNG market continued to evolve in 2019 with demand increasing for LNG and natural gas in power and non-power sectors,” said Maarten Wetselaar, Integrated Gas and New Energies Director at Shell.