Rising demand from emerging economies reshapes global LNG market

By 2040 global natural gas demand will increase more than 40 percent from the 2017 level, according to the International Energy Agency (IEA). By that time, natural gas will become the second largest energy source in global energy mix, and its share in global primary energy demand will increase to about 25 percent from less than 23 percent in 2017.

"Most of this rising demand for natural gas will come from fast-growing economies whose energy systems still rely heavily on coal, such as China, India and other Asian countries," Patrick Pouyanne, chairman and chief executive officer of Total, told Xinhua.

"One of the most striking examples is the massive promotion of natural gas by the Chinese government within the framework of the 'Beautiful China' development plan," Pouyanne added.

The IEA predicted that from 2017 to 2023, China alone would account for a third of global gas demand growth thanks in part to the country's "Blue Skies" policy and the strong drive to improve air quality.

In 2018, China's natural gas consumption totaled 280.3 billion cubic meters, a robust growth of 18.1 percent from a year ago. Driven by the growing gas consumption, China imported 90.39 million tonnes of natural gas in 2018, a year-on-year growth of 31.9 percent. The growth rate was higher than the 26.9-percent increase in 2017.

NEW MARKET DEVELOPMENT RESHAPING GLOBAL LNG LANDSCAPE

"Global LNG industry is undergoing substantial changes," Yang said, adding that with the rising LNG production capacity, the global LNG trade is expected to exceed 500 billion cubic meters by 2030, an increase of about 30 percent from 2017.

Within the next five years, the global natural gas liquefaction capacity is expected to increase by 50 percent from the 2015 level as new LNG development and expansion projects in the United States, Australia, Qatar and Russia become operational, according to Young-Doo Kim, acting president of Korea Gas Corporation, one of the world's largest LNG importers.

With the rising supply, more competitions are expected in the global LNG market, which will offer more options for buyers and foster more flexible ways for LNG trade.

"With more market players and increased market liquidity, the global LNG market is expanding and taking on some positive changes, such as the emergence of new and flexible business modes and contract terms," said Wang Yilin, chairman of China National Petroleum Corporation.

However, Wang noted that the flexibility of LNG trade should be further enhanced. "More flexible contract terms and business modes could inject more liquidity into the market."

The LNG conference, first held in 1968, is a triennial event for the industry. This year marks the first time that the conference was held in China, the world's fastest growing LNG market.