ISSUE 90 I March 2024 I SAFETY4SEA Log I 19 safety4sea.com ARTICLE helping to improve security of energy supplies. European LNG imports remained at similar levels to 2022, despite an overall decline in European gas demand in 2023. Relatively mild winter temperatures in countries that rely on gas for heating, combined with high gas storage levels, stronger nuclear power generation and a modest economic recovery in China, all helped balance the global gas market in 2023. This helped bring down and stabilise gas prices in the key importing regions of Europe and East Asia compared to the record highs and unprecedented volatility seen from late 2021 through 2022. However, gas prices and volatility remained significantly higher in 2023 than in the 2017-2020 period. Despite a well-supplied global market in 2023, the lack of Russian pipeline gas supply to Europe and a limited amount of LNG supply growth over the last year mean that the global gas market remains structurally tight. clining domestic gas production in parts of South Asia and South-east Asia could drive a surge in demand for LNG as these economies increasingly need fuel for gas-fired power plants or industry. However, countries in South Asia and South-east Asia would need significant investments in gas import infrastructure. The Shell LNG Outlook 2024 shows that gas complements wind and solar power in countries with high levels of renewables in their power generation mix, providing shortterm flexibility and long-term security of supply. “China is likely to dominate LNG demand growth this decade as its industry seeks to cut carbon emissions by switching from coal to gas. With China’s coal-based steel sector accounting for more emissions than the total emissions of the UK, Germany and Turkey combined, gas has an essential role to play in tackling one of the world’s biggest sources of carbon emissions and local air pollution.”, said Steve Hill, Executive Vice President for Shell Energy. LNG continued to play a vital role in European energy security in 2023, following a slump in Russian pipeline exports to Europe in 2022, with new regasification facilities Declining Growing 86M tonnes Infographic Industry, heating and emerging Asia to drive LNG demand growth Demand for natural gas has already peaked in some regions But demand for LNG is set to continue growing beyond 2040 China to drive demand for LNG this decade to meet industry needs and decarbonisation goals LNG continues to lower emissions in the marine sector LNG-fuelled vessels in operation set to double over the coming years Continuing policy support for natural gas projects in Asia that deliver environmental and economic benefits Gas provides flexibility to balance intermittent solar and wind generation Gas prices more stable in 2023 but volatility lingered in tight market USA became largest LNG exporter in 2023, shipping 86 million tonnes Gas and LNG prices stabilised during 2023 But limited new LNG supply has kept gas prices above historic averages Chinese gas demand grew 8% despite modest economic recovery Overtakes Japan to become largest LNG importer again European gas use fell due to continued elevated prices LNG continued to play a vital energy security role with Europe importing more than 120 million tonnes 404 MT 2023 +7 MT 2022 2022 2023 2040 2024 24/7 power output Global trade in LNG reached 404 million tonnes in 2023, an increase of 7 million tonnes compared to 2022 Latent LNG demand to keep pace with new supply but dependent on regas infrastructure investment China’s gas demand expected to rise by more than 50% by 2040 2020 2025 2030 2035 2040 +50% North America expected to meet ~30% of total global LNG demand. But reliance on four basins could create midstream constraints ~30% Europe will continue to need LNG to meet gas supply needs despite consensus for falling gas demand Global LNG supply expansion coming this decade but startup timings uncertain Declining domestic gas and growing power markets set to drive South and South-east Asia LNG imports Dependent on investment in regasification infrastructure
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