WASHINGTON - The International Energy Forum (IEF) forecasts a significant 25% increase in global liquefied natural gas (LNG) trade over the next five years, anticipating an annual volume of 500 million tons by 2028. This projection comes amid surging demand for LNG, which is seen as a key driver for both global economic growth and energy security.
The United States is expected to maintain its position as the leading LNG supplier, with export capacity expansions of 17% by 2025 and 43% by 2028. The IEF, alongside Synmax, reported a record high in global LNG trade for 2022, with the US emerging as the top exporter this year.
Europe's reliance on LNG is projected to exceed 50% by 2030, with a corresponding rise in regasification capacity by 48%. This comes after Europe experienced a significant increase in LNG demand following Russia's invasion of Ukraine, which led to a decrease in Russian gas production and subsequent spikes in global LNG prices. These events have highlighted the geopolitical risks affecting the LNG market and have cemented LNG's role in Europe's energy mix.
China has ascended as the largest importer of LNG, with its share of active global contracts anticipated to reach nearly a quarter of the global supply by 2030. Southeast Asian nations such as Singapore, Vietnam, and the Philippines are also doubling their demand, positioning themselves as key centers for LNG imports. Notably, Asia Pacific signed 46% of this year's LNG contracts.
Joseph McMonigle of IEF underscored the importance of LNG in bolstering energy security and supporting economic growth. However, he also pointed out that geopolitical risks contribute to market fragility, with supply disruptions and price volatility impacting emerging economies. Last year, South Asian countries like India, Pakistan, and Bangladesh saw a reduction in their LNG purchases by 16%, underscoring the need for governments to diversify energy sources and bolster gas and LNG infrastructure.
As the global landscape for energy continues to evolve, these developments signal a significant shift towards greater dependency on LNG across various regions. The anticipated growth in global trade reflects both the challenges posed by geopolitical tensions and the strategic role of LNG in meeting future energy demands.
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