Europe‘s increased need for liquefied natural gas (LNG) will fuel competition with Asia for the seaborne fuel over the next two years because global supply remains limited, Shell said on Thursday.
European countries, including the UK, imported 121 million tonnes of LNG last year, up 60 percent from 2021, helping the continent to cope with cuts to Russian pipeline imports after its invasion of Ukraine, Shell said in its LNG outlook for 2023.
“In the near term, the global LNG market is expected to remain tight and exposed to supply and demand shocks, with limited new supply coming online. More investment in supply will be needed to meet future LNG demand,” it said.
Total global LNG trade reached 397 million tonnes in 2022. Industry forecasts expect demand for the chilled fuel to almost double to 700 million tonnes by 2040, Shell said, adding that a supply-demand gap is expected to emerge by the late 2020s.
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The cargo was delivered on the vessel ISH to the floating LNG terminal “Hoegh Gannet” at Brunsbuettel. The terminal was chartered by RWE on behalf of the German government as part of efforts to ensure supply after Russia cut exports. Germany has been increasing LNG purchases via existing European terminals and built up floating storage and regasification unit (FSRU) terminals on its coastlines in record time.