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Demand for liquified natural gas expected to double by 2040

By Charlotte Ricca

Asia is expected to generate more than half of the increased global demand

Global demand for liquefied natural gas (LNG) is expected to double by 2040 as energy consumption rises and the world moves away from fossil-burning fuels.

According to Royal Dutch Shell’s latest annual LNG outlook, global demand for LNG grew by 12 per cent in 2019 from the previous years, to 359 million tons.

“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, Shell’s head of gas and new energies.

“Record supply investments will meet people’s growing need for the most flexible and cleanest-burning fossil fuel.”

In China, LNG imports increased by 14 per cent in 2019, while Bangladesh, India and Pakistan imported 36 million tons, an increase of 19 per cent over last year, indicating an emerging growth in Asia. However, global LNG prices have fallen to record lows.

“While we see weak market conditions today due to record new supply coming in, two successive mild winters and the coronavirus situation, we expect equilibrium to return,” Wetselaar said.

Over the longer-term, global LNG demand is expected to double to 700m tons by 2040, as gas plays a “significant role in shaping a lower-carbon energy system”.

Asia is expected to remain the dominant region, with south and south-east Asia generating more than half of the increased demand.

Shell has invested heavily into gas infrastructure in recent years as it aims to shift the balance of its portfolio away from oil, and banks on surging demand for the fuel led by rising electrification of the energy system.

While burning gas releases fewer emissions than oil and coal it is still a fossil fuel and has come under attack by environmentalists who are calling for a rapid shift to renewable energy to prevent global warming.

Advocates for gas, such as Shell, say that the fuel will guarantee reliable power supply and will be essential for meeting energy demand over the coming decades. China is expected to see gas demand double.

FURTHER READING: Shell Q4 profits drop by almost half

FURTHER READING: UK fossil fuel use hits record low

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