The liquefied natural gas (LNG) market, currently highly sought following in Europe as an alternative to Russian gas, is marked by a “structural imbalance” between demand and supply, notes the sector’s professional association in a report published Thursday.
Global LNG imports reached 372.3 million tonnes in 2021, up 4.5% from 2020, the International Liquefied Natural Gas Importers Group (GIIGNL) said in its annual report.
Asia, particularly China, which has become the world’s largest importer ahead of Japan, strongly encouraged demand.
“These record imports were driven by a robust economic recovery as well as the growth of gas for power generation and the transition from coal to gas,” explains GIIGNL.
But since the invasion of Ukraine by Russia at the end of February, Europe is also seeking to massively increase its imports of LNG to reduce its dependence on Russian gas, which arrives mainly by pipeline. LNG can be transported by ship from anywhere in the world.
“The LNG market is growing rapidly and recent price increases indicate a structural imbalance between demand and growth in supply,” said GIIGNL president Jean Abiteboul.
On the supply side, world production is only progressing modestly despite this renewed enthusiasm for liquefied gas. The United States is a locomotive, having marketed an additional 22.3 million tonnes last year.
Price volatility “has been exacerbated by the Russian-Ukrainian conflict, and the current European energy crisis is proving to be a stark reminder of the vital role of LNG in ensuring energy security and economic stability”, adds Jean Abiteboul.
In Europe, Germany recently released an envelope of three billion euros to equip itself with floating LNG import terminals, which the country does not currently have.
For its part, France already has four LNG terminals and plans to install a floating installation as well.
