It was billed as a fuel for the energy transition. An incredibly dense, colourless fossil fuel that can be conveniently transported in ships around the world like crude oil, and which produces around half as much carbon as coal when regasified and burnt. Advocates of liquefied natural gas (LNG) predicted a final fossil fuel ‘gold rush’, with Qatar, the US and Australia leading the charge.
Historically, most LNG was sold to the wealthy but resource-scarce countries of Japan and South Korea via long-term contracts linked to the oil price. In recent years, however, the US led a move towards more flexible, short-term sales, where the price is linked to natural gas trading hubs.
Since the turn of the century, the global LNG market has boomed, with worldwide LNG imports more than trebling between 2000 and 2020. The European market has quadrupled in size, as countries look for a cleaner alternative to coal, and to limit their reliance on gas pipeline imports from Russia.
Figures from BP show that LNG imports increased 0.8% year-on-year even during the pandemic-afflicted 2020, as demand for coal and oil plummeted 3.8% and 9.4%, respectively. However, while demand remained strong, prices have been volatile, lurching from record lows during the initial Covid-19 recession to record highs as the global economy recovered. Producers have been unable to keep pace with soaring LNG demand in China (which overtook Japan to become the world’s largest importer in 2021), a cold northern...
Read Full Story: https://www.energymonitor.ai/tech/cleaner-fuels/why-the-lng-gold-rush-could-soon-turn-to-dust
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