Europe’s liquefied natural gas (LNG) imports increased year on year by 60% in 2022, as the continent pledged to distance itself from Russian gas after the country went to war with Ukraine.
European countries, including the UK, imported 121 million tonnes of LNG in 2022, up 60% from 2021, according to Shell’s LNG Outlook 2023 released Thursday.
In a bid to support Ukraine, countries in Europe agreed to stop buying gas from Russia. This decision compelled the continent to seek alternative gas sources, primarily LNG.
With reduced demand for Russian pipeline gas, LNG became a vital part of Europe’s energy security, ‘supported by the rapid development of new regasification terminals in north-western Europe,’ Shell said.
‘Europe’s rapidly rising appetite for LNG pushed prices to record highs and generated volatility in energy markets around the world,’ the report added.
The race to secure more LNG in Europe forced other buyers to reduce their imports and switch to other fuels, inciting higher emissions in other parts of the world.
South Asian LNG imports dropped by 5.8 million tonnes, 15.5% lower than in 2021, due to the higher costs.
‘High global LNG prices led to a drop in LNG imports in South Asia, with Pakistan and Bangladesh importing more fuel oil to minimize power supply shortages and India using more coal,’ Shell said.
Meanwhile, total global trade in LNG reached 397 million tonnes in 2022, with demand forecasted to reach 650 million tonnes and to over 700 million tonnes a year by 2040.
With increasing demand for LNG, ‘more investment in liquefaction projects is required to avoid a supply-demand gap that is expected to emerge by the late 2020s,’ Shell said.
