The photo is sourced from shell.com
Japan intends to achieve zero emissions by 2050, China by 2060 and India by 2070, Shell analysts noted.
In their view, transferring to gas production 20 % of Asian capacity of coal-fired power stations will reduce CO2 emissions by 680 million tonnes – equivalent to Germany’s carbon emissions. A second driving force behind demand could be sea transport – a ban on the use of high-sulphur fuel oil introduced in 2020.
The International Maritime Organization (IMO) triggered an increase in LNG demand as a fuel for seagoing vessels. The number of orders for building ships operating on LNG is more than one and half times greater than the number of LNG-powered ships now in operation (251).
Hydrogen energy could serve as another driver of demand.
An increase in hydrogen’s share in the world energy balance to 5 % (a third of which would come from blue hydrogen) could result in an annual reduction of 475 million tonnes CO2 emissions of and boost demand for gas by 350 million cubic metres annually.
In any event, demand for LNG is increasing even under current conditions. World-wide imports of LNG in 2021 rose by 6 % (to 21 million tonnes). China increased imports by 12 million tonnes (to 79 million), compared to world-wide imports of 380 million tonnes), and has overtaken Japan as the world’s largest consumer of LNG. The leader in terms of growth in exports is the United States, which in 2021 boosted its shipments of LNG on world markets by 24 million tonnes and in 2022 it could establish itself as the chief exporter in front of Australia and Qatar.
Shell ‘s analysts see as the main problem on markets a discrepancy in the trends of supply and demand which by the mid-2020s will lead to a shortage.
One of the reasons for this lies in the COVID pandemic which dealt a blow to investments in construction of new capacities. The volume of liquefying capacity for which final investment decisions (FID) have been taken, declined from 96 billion cubic metres (bcm) to 4.5 bcm in 2020., the International Energy Agency (IEA) reported.
The sole project to secure approval was the Costa Azul LNG which, by 2024, is to be built in Mexico. According to Wood MacKenzie’s assessment, the volume of approved capacity approved in 2021 increased to 69 bcm – but was still below levels recorded before the onset of the pandemic.
