Royal Dutch Shell PLC has brushed off concern that the burgeoning market for liquefied natural gas (LNG) is already oversupplied saying "there is no evidence of a glut in LNG supply".
Global demand for LNG reached 265 million tonnes (MT) in 2016 – enough to supply power to around 500 million homes a year. This included an increase in net LNG imports of 17 MT.
Many expected a strong increase in new LNG supplies would outpace demand growth during 2016. Instead, demand growth kept pace with supply as greater than expected demand in Asia and the Middle East absorbed the increase in supply from Australia, according to Shell’s first LNG Outlook.
“Global LNG trade demonstrated its flexibility time and again in 2016, responding to shortfalls in national and regional gas supply and to new emerging demand,” said Maarten Wetselaar, Integrated Gas and New Energies Director at Shell. “The outlook for LNG demand is set to grow at twice the rate of gas demand, at 4 to 5% a year between 2015 and 2030.”
China and India – which are set to continue driving a rise in demand – were two of the fastest growing buyers, increasing their imports by a combined 11.9 MT of LNG in 2016. This boosted China’s LNG imports in 2016 to 27 MT and India’s to 20 MT.
Total global LNG demand increased following the addition of six new importing countries since 2015: Colombia, Egypt, Jamaica, Jordan, Pakistan and Poland. They brought the number of LNG importers to 35, up from around 10 at the start of this century.
Egypt, Jordan and Pakistan were among the fastest growing LNG importers in the world in 2016. Due to local shortages in gas supplies, they imported 13.9 MT of LNG in total.
The bulk of growth in LNG exports in 2016 came from Australia, where exports increased by 15 MT to a total of 44.3 MT. It was also a significant year for the USA, after 2.9 MT of LNG was delivered from the Sabine Pass terminal in Louisiana.