KARACHI: Europe’s increased need for the liquefied natural gas (LNG) looks set to intensify competition with Asia for limited new supply available over the next two years and may dominate the LNG trade over the long-term, according to Shell’s LNG Outlook 2023.
The European countries, including the UK, imported 121 million tonnes of LNG in 2022, an increase of 60 per cent, compared with 2021, which enabled them to withstand a slump in the Russian pipeline gas imports; following its invasion of Ukraine.
A 15 million tonnes fall in the Chinese imports combined with the reduced imports by the South Asian buyers helped the European countries to secure enough gas and avoid shortages.
Europe’s rapidly rising appetite for LNG pushed the prices to record highs and generated volatility in the energy markets around the world.
With reduced Russian pipeline gas, LNG is becoming an increasingly important pillar of the European energy security, supported by the rapid development of new regasification terminals in the Northwest Europe.
In contrast, China is evolving from being a rapidly growing import market to playing a more flexible role with an increased ability to balance the global LNG market.