According to energy major Shell’s LNG Outlook 2023, Europe’s increased demand for liquefied natural gas (LNG) will likely intensify competition with Asia for the limited new supply that will be available over the next two years and may dominate LNG trade in the long run.
According to reports, European nations, including the United Kingdom, imported 121 million tonnes of LNG in 2022, a 60% increase from 2021. This allowed them to withstand a decline in Russian pipeline gas imports following its invasion of Ukraine.
Additionally, European nations were able to secure sufficient gas supplies and avoid shortages thanks to a reduction of 15 million tonnes in Chinese imports and a decrease in imports from South Asian buyers. However, According to Shell Europe’s rapidly expanding demand for LNG caused worldwide energy markets to experience volatility and record high prices.
The rapid development of new regasification terminals in northwest Europe, such as those in Germany and Finland, helped LNG emerge as an increasingly important pillar of European energy security as Russian pipeline gas declined. China, on the other hand, is transitioning from a rapidly expanding import market to one that is more adaptable and better able to balance the global LNG market.
As per the energy organization, absolute worldwide exchange LNG arrived at 397 million tons in 2022. With a contracted capacity of 6.7 million tonnes per annum (mtpa), Shell dominated the global long-term LNG import contract volumes signed by key purchasing companies in 2022, according to a recent Global Data report.