Competition for liquefied natural gas will intensify this year, as Europe’s reliance on the chilled fuel persists following the end of Russian gas flows via Ukraine and Asian buyers seek cargoes to meet cooling needs, the International Gas Union said on Thursday.

WHY IT’S IMPORTANT

LNG is widely seen as a transition fuel on the path to net-zero emissions.

Intensifying regional competition could drive up prices this year, as Europe is expected to need more cargoes to refill depleted storage and after Russian gas supplies sent via Ukraine to Europe ended on January 1.

The IGU represents the global gas industry with more than 130 members in over 70 countries, covering most of the world gas market.

KEY QUOTES

“The global LNG market equilibrium is fragile and sensitive to uncertainties from both supply and demand sides,” said IGU President Li Yalan in the report.

“Considerable uncertainty in geopolitics, trade, and regulatory policy characterises today’s energy landscape.”

BY THE NUMBERS

Global LNG trade in 2024 grew 2.4%, or 9.8 million tons, to 411.2 million tons due to increased liquefaction capacity and rising exports from key producers including the U.S., Russia, Indonesia and Australia.

Imports to Asia rose the most, climbing by 12.5 million tons year-on-year to nearly 118 million tons. China and India showed strong growth in spot imports amid heatwaves, infrastructure expansions and increasing reliance on gas-fired power.

China remained the world’s largest LNG buyer, with imports of 78.6 million tons, up 7.5 million tons from 2023.

Japan and South Korea imported 67.7 million tons and 47 million tons of LNG respectively, both up moderately.

Europe’s imports declined sharply to their lowest levels since 2021, down by 21.2 million tons to 100.1 million tons due to high gas storage levels at the start of the year, sluggish demand, steady pipeline flows and high renewables output.

The U.S. was the largest LNG exporter with total shipments of 88.4 million tons, up 3.9 million tons from 2023, followed by Australia, with 81 million tons, Qatar at 77.2 million tons and Russia at 33.5 million tons.

Source: Reuters