The International Gas Union (IGU) has announced the release of its 15th annual World LNG Report. Despite falling prices, the market remains tense. According to the report, LNG trade grew by 21% in 2023, surpassing the 401 million ton mark. There are 20 export markets and 51 import markets globally. Market growth is primarily hindered by supply constraints.
LNG has established itself as a flexible, highly efficient, and reliable resource in the global energy market. The current focus is particularly on the decarbonization of the LNG value chain. Several projects have been launched to implement renewable energy as well as CO2 capture and storage. Initiatives are also underway to develop e-methane and produce bio-LNG or liquefied biomethane through partnerships.
The global LNG receiving capacity reached a new peak of 1,029.9 MTPA (million tons per annum) across 47 markets at the end of February 2024, corresponding to an increase of almost 70 MTPA in 2023 – the highest increase since 2010. Europe saw the largest increase with 30 MTPA followed by Asia with 26.9 MTPA and the Asia-Pacific region with 13 MTPA. The Philippines and Vietnam are newcomers among LNG importers.
Increasing Demand from Asia Expected
Supply growth is well covered with only 0.8% year-over-year, thanks to an increase of 3.8 MTPA at Tangguh LNG in Indonesia. The global capacity for liquefying natural gas is expected to exceed 700 MTPA by 2030, due to new FIDs and the commissioning of projects under construction. This is intended to meet demand, especially in Asian markets where the transition from coal to gas is crucial for decarbonization and improving air quality. Leading the LNG exports are the USA with 84.53 MT (compared to 75.63 in 2022), followed by Australia (79.56 MT), Qatar (78.22 MT), and Russia (31.36 MT).
Regarding LNG spot prices, Platts JKM identified an average price of $13.86/million British thermal units (equivalent to 264 m³) for 2023, while the average annual price volatility has decreased significantly from 2022 levels but still remains above pre-crisis levels. The largest importer remains China with 71.19 million tons, followed by Japan and Korea. India is in fourth place, as demand has responded to the low spot price. With 121.29 MT, Europe retains and strengthens its role as the second-largest import region. Competition between European and Asian markets continues to be a key market dynamic.
The increasing number of market participants, the acceleration of technological developments, and the growing demand in emerging markets ensure that the LNG market continues to evolve rapidly. The industry is no longer dominated by large markets and companies; portfolio companies are playing an increasingly important role. In 2023, about 180 companies were involved in LNG deliveries under term contracts, while about 35% of transactions occurred at spot prices.
