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By Adewale Sanyaolu
Nigeria and other African nations are missing in the list of countries with superlative performance in global Liquefied Natural Gas (LNG) export and demand markets.
The country’s poor global LNG performance rating is contained in Shell annual LNG outlook released in London, yesterday.
Despite Nigeria’s topping African LNG exporters in 2021 with 17.9 million metric tons (MMt), followed by Algeria with 12.3MMt and Egypt with 6.9MMt, according to leading information provider, IHS Markit, Nigeria and other African countries failed to record a spot in global LNG rating.
The outlook disclosed that the US-led 2021 export growth with a year-on-year increase of 24 million tonnes and is expected to become the world’s largest LNG exporter in 2022, adding that LNG exports grew in 2021 despite a number of unexpected outages that dented LNG available for delivery.
On the demand side, China and South Korea led the growth in LNG demand in 2021 with China increasing its LNG imports by 12 million tonnes to 79 million tonnes, surpassing Japan to become the world’s largest LNG importer.
Overall, global LNG demand is expected to cross 700 million tonnes a year by 2040, a 90 per cent increase on 2021 demand.
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Asia, according to the report, is expected to consume the majority of this growth as domestic gas production declines, regional economies grow and LNG replaces higher-emissions energy sources, helping to tackle concerns over air quality and to help progress towards carbon emissions targets.
The Shell outlook indicated that during 2021, Chinese LNG buyers signed long-term contracts for more than 20 million tonnes a year, signaling an ongoing role for LNG in coal-to-gas switching in powering key sectors and helping to reach its ambition to be carbon neutral by 2060.
Also, LNG global trade increased by six per cent to 380 million tonnes during 2021, as many countries rebounded from the economic impact of the COVID-19 pandemic, according to Shell’s latest annual LNG Outlook.
The outlook maintained that rising LNG demand, combined with supply constraints, caused gas and LNG prices to remain volatile throughout the year with prices reaching record levels in October 2021 as Europe, with historically low storage levels, struggled to secure LNG cargoes to meet expected winter gas demand.
According to the outlook,the volatility emphasises the need for a more strategic approach to secure reliable and flexible gas supply in future to avoid exposure to price spikes, stating that an LNG supply-demand gap is forecast to emerge in the mid-2020s and focuses attention on the need for more investment to increase supply and meet rising LNG demand, especially in Asia.
“Last year showed just how crucial gas and LNG were in providing communities around the world with energy they need as they strived to get back on track following the difficulties caused by the COVID-19 pandemic,” said Wael Sawan, Integrated Gas, Renewables and Energy Solutions Director at Shell.
“As countries develop lower-carbon energy systems and pursue net-zero emission goals, focusing on cleaner forms of gas and decarbonisation measures will help LNG to remain a reliable and flexible energy source for decades to come.”
