Global LNG demand to grow further in 2022; Qatar and key producers to drive growth: IGU
International Gas Union expects liquefied natural gas demand to grow further in 2022 as the ongoing Russia-Ukraine conflict continues to impact global gas supply, reinforcing LNG’s critical role in global energy security.
Growth in Qatari LNG market and other markets including the US and Africa will help support European energy security, IGU said in its ‘World LNG Report 2022’.
“In 2021, Russia contributed to 8.0% of global LNG exports, out of which, 43.9% were to Europe, while the remaining 56.1% were to Asia Pacific and Asia. With the European Union committing to eliminate Russia energy imports by 2027, growth in existing LNG exporting markets, such as the United States and Qatar, and developing new ones like growing Africa, are important avenues to diversify its energy sources and support European energy security,” IGU noted.
As of April this year, 136.2mn tonnes per year (MTPY) of liquefaction capacity was under construction or approved for development, but only 7.7MTPY of that overall capacity increase is expected to come online in the second half of 2022, with the rest gradually coming in between 2023 and 2027.
2021 witnessed one of the highest volumes of capacity being approved in a single year, with 50 MTPY worth of liquefaction capacity reaching a final investment decision (FID). This was mainly contributed by the Qatargas North Field East (NFE) project, which added 32 MTPY to global approved liquefaction capacity. The remaining approved capacity was contributed by the Baltic LNG T1–T2 (13 MTPY) and Pluto T2 Expansion (5 MTPY) in the pre-FID stage, the majority of which is in the United States, Canada and Russia.
In the Middle East, QatarEnergy has taken FID on the North Field East (NFE), the world’s largest LNG project, which will raise Qatar’s LNG production capacity from 77MTPY to 110MTPY by 2025.
The project involves the construction of four new LNG mega-trains with a capacity of 8MTPY each. With the NFE project progressing, this will reposition Qatar as the world leader in terms of liquefaction capacity, IGU said.
The current geopolitical situation has re-invigorated appetite for new liquefaction project development, with several project developers hoping to leverage strong demand and high LNG prices to progress to an FID.
“However, challenges such as access to financing remain, as financial institutions are reducing their exposure to fossil fuel investments, focusing developments on clean energy instead.
“As such, it is crucial for new liquefaction plants to be increasingly innovative in a decarbonising landscape, leveraging on solutions to continue driving down emissions in the liquefaction process and the rest of the LNG value chain. It is also important to have clarity and consistency in the policy environment, which impacts financial risk and liquidity provision,” IGU said.
Source: Gulf Times