Global LNG: New pricing ahead?
LNG demand growth
Total global natural gas demand is estimated to have grown by about 2.7% per year since 2000; however, global LNG demand has risen by an estimated 7.6% per year over the same period, almost three times faster.
Global gas demand is expected to continue to grow strongly. In its most recent annual World Energy Outlook, the International Energy Agency (IEA) forecast a growing role for natural gas in the world’s energy mix, with the natural gas share growing from 21% in 2010 to 25% in 2035, with natural gas as the only fossil fuel whose share was growing.
LNG demand growth is, however, expected to be even stronger, particularly through 2020. After 2020, demand growth is expected to continue, albeit at a slightly slower pace as markets mature, demand shifts to more price-sensitive buyers, and some price subsidies are removed in non-OECD markets.
Global LNG demand
Source: Ernst & Young assessments of data from multiple sources
Global LNG demand by 2030 could, however, be almost double that of the estimated 2012 level of about 250 million metric tonnes. Japan, South Korea and Taiwan (collectively, JKT) have been and are expected to remain the backbone of the global LNG market, while China and India are expected to be the biggest sources of additional LNG demand.