- Last year was an unprecedented year for natural gas and liquefied-natural-gas (LNG) markets.
- Whereas natural gas demand declined by 3%, LNG demand proved to be more resilient and managed to grow 1%.
- Nevertheless, the LNG market was extremely volatile, with periods of extreme oversupply alternating with periods of extreme tightness during the year.
- According to McKinsey, natural gas is set to become the strongest-growing fossil fuel, with demand expanding 0.9% per annum from 2020 to 2035.
An Oil Price news report written by Alex Kimani highlights that 3 nations are vying for LNG dominance.
Decline in demand
While that kind of growth is nothing to write home about, natural gas will be the only fossil fuel expected to grow beyond 2030, peaking in 2037 thanks to the strong clean energy momentum.
From 2035 to 2050, demand is expected to decline modestly by 0.4% per annum due to hard-to-replace gas use in the chemical and industrial sectors as natural gas continues to replace coal in power generation.
LNG set for stronger growth
Meanwhile, LNG is set for much stronger growth, with McKinsey predicting that domestic supply in key gas markets will be unable to keep up with demand growth.
Global LNG demand is expected to grow 3.4% per annum to 2035, calling for some 100 million metric tons of additional capacity to meet both demand growth and replace decline from existing projects.
LNG demand growth will slow markedly from 2035 to 2050 to just 0.5% per annum but still call for more than 200 million metric tons of new capacity by 2050.
LNG markets calm
That said, LNG markets are expected to be anything but calm, with leading LNG exports constantly jostling for market share. On one hand, Qatar will be looking to reassert its dominance against new LNG powerhouse, Australia, while the United States will be looking to close the gap with the market leaders.
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Source: Oil Price
