Global LNG market: review of 2021 and forecasts for 2022
According to the International Energy Agency (IEA), the global LNG market grew by 6% in 2021 in comparison with 2020. However, it is projected to slow down in early 2022.
Overview of the global LNG market in 2021
According to the International Energy Agency (IEA), global LNG trade expanded by 6% in 2021. In comparison, the growth rate was only 1% in 2020.
Import growth in 2021 was led by the Asia-Pacific region, which registered an 8% year-on-year increase. In Asia, the growth in LNG imports in 2021 was led by China, up 17%, and Korea, up 14%. China overtook Japan for the first time as the world's largest LNG importer. India’s LNG imports declined by 11%, but this was largely offset by growth in Bangladesh (+ 31%), Pakistan (+ 16%) and Thailand (+ 16%), fuelled by strong power demand and economic activity.
Central and South America was also a key growth driver (+ 69%). Due to a severe drought in Brazil, the country’s LNG imports more than tripled.
Imports into Europe declined by 5% as strong demand in Asia drew cargoes away.
North America continued to lead global LNG export growth with a 51% increase in 2021.
Exports from Australia grew by 3% (despite continuing outages), while deliveries from Qatar and Russia remained broadly stable at high levels.
Egypt registered a more than fourfold increase in LNG outflows thanks to the restart of exports from Damietta.
The biggest export declines occurred in Trinidad and Tobago, Nigeria and Norway.
Global LNG market forecasts for 2022
According to the IEA, global LNG trade growth is projected to slow to 4% in 2022, as the demand expansion in Asia moderates and the drought-driven rise in South American imports reverses.
India’s LNG imports are projected to return to their 2020 level after a temporary dip in 2021 and register a 12% increase in 2022. LNG imports to emerging Asia are set to expand by 27%, driven by the region’s post-Covid demand recovery, lower domestic production and planned import capacity additions.
European inflows are also expected to remain elevated in 2022, albeit below 2019-2021 levels, to meet the region’s high restocking needs.
Import growth in the Middle East during 2022 (up 11%) is enabled in part by Kuwait’s new Al-Zour terminal.
In Africa, import growth is fuelled by the emergence of new importing countries: Ghana, South Africa and Senegal.
LNG export growth in 2022 remains dominated by North America, which accounts for over 75% of the net increase in global LNG supply.
These forecasts were made by the IEA before the conflict between Russia and Ukraine. Russia's position in the natural gas trade is likely to change these forecasts.
IEA (2021), Gas Market Report, Q1-2022, IEA, Paris. https://www.iea.org/reports/gas-market-report-q1-2022