How LNG Market Developments Are Shaping the Future of Gas - in partnership with the World Gas Conference
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How LNG Market Developments Are Shaping the Future of Gas Source: Bloomberg in partnership with the World Gas Conference
Table of contents BNEF Overview 2 Outlook for LNG markets in 2022 7 Different pathways to decarbonize gas 13 1 World Gas Conference 2022
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6 World Gas Conference 2022
Outlook for LNG markets in 2022 7 World Gas Conference 2022
Outlook for LNG markets in 2022
Outlook for global LNG trade in 2022
Global LNG demand Global LNG supply
Million metric tons Million metric tons
410 500
405
400 413 Atlantic Basin
395 10.2 387
390 400
1.5 U.S.
385 5.5
380 7.6 400 West Africa
375 2.8 0.4 300
370 375 3.3 5.5
365 Russia
360 200 Other MEA
Japan
2021
2022
Korea
South Asia
China
Taiwan
Other markets
NWE+Italy
Southeast Asia
Qatar
100
Pacific Basin
0 Australia
2021 2022
Source: BloombergNEF. Note: NWE is Northwest Europe, ‘Other markets’ includes Middle East, Americas and other Europe. MEA is Middle East and Africa (excluding West Africa). Difference between the supply
and demand figures is due to operational losses, LNG on water and floating storage.
● BloombergNEF expects global liquefied natural gas (LNG) demand to reach 400 million metric tons in 2022, up 6.6% from 2021, driven by China and other Asian
markets.
● Europe is expected to rely more on LNG this year. The curtailed gas supply, record high prices, unprecedented volatility and geopolitical tensions that made 2021
such a tumultuous year for the European gas market show few signs of abating in 2022. Europe could import more LNG than anticipated if gas storage falls to
critically low levels after the end of winter, prompting the JKM-TTF price spread to shrink to a point where Europe outcompetes Asia for spot LNG cargoes.
● U.S. LNG accounts for more than 40% of the total year-on-year supply increase in 2022. Globally, four new projects could commence this year.
8 World Gas Conference 2022
Outlook for LNG markets in 2022
LNG growth in China and emerging Asia
China LNG import capacity and contracts South and Southeast Asia LNG demand
Million tons per year Million metric tons New markets
200 80 Vietnam
70 66.0 Philippines
150
60 53.2 53.8 Myanmar
50.5 Malaysia
100 50
Indonesia
40 Singapore
50
30 Thailand
0 20 Bangladesh
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
10 Pakistan
India
0
Long-term contract volume LNG terminal receiving capacity
2019 2020 2021 2022
Source: BloombergNEF. Note: Only terminals under construction are considered for future Source: BloombergNEF. Note: Demand projections assume 10-year normal weather in North
receiving capacity. Asia and Europe.
● BNEF expects China to import 84.6 million tons of LNG in 2022, up 7.5% from 2021, fueled by continuous economic growth and coal-to-gas switching.
● More Chinese LNG buyers are emerging as they increase access to supply through their own new import terminals or third-party access (TPA) from PipeChina’s
LNG terminals. In 2022, new import capacity will reach 38.9 million tons a year after nine new terminals and four expansion projects are commissioned. The gap
between China’s LNG contract supply and import terminal capacity is estimated to balloon from 45 million tons to 93.5 million tons in the next five years.
● South and Southeast Asia will likely see rapid growth in LNG imports, with Vietnam and the Philippines scheduled to start imports in the fourth quarter of 2022.
This rise is driven by economic growth, as well as a move away from emission-heavy coal and the depletion of domestic gas resources.
9 World Gas Conference 2022Outlook for LNG markets in 2022
Massive LNG infrastructure expansion
planned in emerging Asia
LNG import terminals in South and Southeast Asia
Regasification Total capacity
+Five proposed
terminals in terminal status
Pakistan
Excellence FSRU, Summit
BW Integrity FSRU FSRU, Moheshkhali onshore
Existing 95 million tons
Exquisite Mundra Mee Laung
Jafrabad Kukrahati Under construction 24 million tons
FSRU Chhara Gyaing FSRU
Dahej Dhamra
Hazira Kakinada Ahlone FSRU
V-Power LNG project Planned >71 million tons
Dabhol
Kanbauk FSRU First Gen LNG
Jaigarh
Krishnapatnam Nong Fab
Excelerate’s FSRU Total > 190 million
Map Ta Phut:
Ennore Phase 1 and 2
Cambodia LNG
Tien Giang,
EWC - Pagbilao tons/year
Kochi
EGAT FSRU Son My, Ca Na, Note: Capacity of 27 proposed terminals is yet to be
Karaikal Bac Lieu Thi Vai
Gulf MTP LNG Binh Thuan decided.
Sri Lanka FSRU Arun
Melaka FSU
Pengerang
Jurong Island
Batam
Jurong Island 4
Lampung FSRU
FSRU Java 1
West Java (Nusantra) FSRU
Planned areas for Benoa FRU+FSU
Existing Under construction Planned small-scale terminals
in Indonesia
Existing Under construction Proposed
Source: BloombergNEF. Note: For Vietnam, terminals mentioned in the Gas Plan 2016 beyond 2030 (e.g. Cat Hai LNG) are not shown. For Indonesia, projects that are stalled (such as Cilacap FSRU) are not shown.
10 World Gas Conference 2022Outlook for LNG markets in 2022
Europe’s plan for a break from Russian
gas needs LNG growth ● Europe plans to urgently diversify its gas supplies, while accelerating
EU targets for Russian gas imports to be decarbonization efforts to reduce overall gas use. In a wide range of
measures, European policymakers are scrambling to reduce natural
Axis title (units)
displaced in 2022 by sectoral targets gas consumption in light of soaring prices and the Russian invasion of
Ukraine. Energy security has risen high on the agenda.
Billion cubic meters
● The European Commission released on March 8, 2022, its ‘RePower
Russian imported gas to be displaced
EU’ plan, setting out measures to cut Russian gas imports by over two
LNG diversification thirds in 2022. Half of the 102Bcm are to be substituted with additional
imports, while the rest will rely on behavioral energy savings and
Wind and solar ramping up renewables deployments.
-1.5
-3.5
-10
-14 1 101.5
-22.5
-50 Behavioral energy saving
Behavioural ● Gas markets were already very tight before the Commission
Pipeline import diversification announced ambitious LNG import and mandatory storage targets.
Global gas markets beyond 2022 now look even tighter, at least until
Biomethane production new LNG export capacity comes online mid-decade. Missing from the
Commission's assessment are the effects of ongoing industrial
Heat pump adoption
demand destruction and increased production potential from the
Groningen gas field.
● The plan aims to structurally lower gas demand across European
-200 -100 0 100 200
economies by 2030. Delivering this will rely on deploying wind and
solar, renewable hydrogen and biomethane production capacity – and
accelerating energy efficiency measures, including heat pump
installations. The goals for renewables and hydrogen scaling to 2030
look ambitious, but possible. The effective implementation of changes
to permitting rules for wind, and funding mechanisms for hydrogen
Source: European Commission, BloombergNEF analysis. projects, will be vital for their delivery.
11 World Gas Conference 2022Outlook for LNG markets in 2022
LNG project final investment decision watchlist
Top picks for 2022 FID Potential FIDs
FID wildcards
Driftwood Phase 1
Woodfibre LNG
Cameron Train 4 Qatargas Expansion
Commonwealth LNG Mexico Pacific NFE Phase 2
LNG Phase 1
Tortue Phase 2
Papua LNG
Freeport Train 4
Corpus Christi Stage 3 Nigeria FLNG
PFLNG Tiga
Plaquemines LNG
Rio Grande Phase 1
Rovuma LNG
U.S. Gulf Coast
Source: BloombergNEF. Note: Map shows projects with announced FID targets between 2022-23. There are other projects proposed globally that are not shown on the map as they have not made recent
announcements regarding project status. Potential FIDs include projects with target FID dates that may go beyond 2023.
12 World Gas Conference 2022Different pathways to decarbonize gas 13 World Gas Conference 2022
Different pathways to decarbonize gas
Carbon-offset LNG and emissions
transparency will be key initiatives now
Carbon-offset LNG trade in 2021 Emissions transparency offerings
Supply region Import region
Pacific Basin Source: Bloomberg
(11)
JKCT Frameworks
Russia (16)
(3) Well to discharge port
Atlantic Basin Europe
Well to discharge port
(5) (3)
Middle East RoW
(5) (3) Well to discharge port & well to end-use
Source: BloombergNEF. Note: JKCT refers to Japan, Korea, China, and Taiwan, RoW refers to Source: BloombergNEF. Image source: Bloomberg Mercury, company/organization websites.
rest of world. Note: Proportion of life-cycle emissions shown are BNEF assumptions for average LNG cargoes.
● Current strategies to decarbonize LNG include everything from carbon offsetting, statements of cargo emissions, carbon capture and storage, electrification of
liquefaction processes and boil-off gas recovery. In the longer term, consumers may switch away from gas to zero-carbon fuels such as hydrogen and ammonia.
● In 2021, Japanese utilities were active in growing the trade of carbon-offset LNG cargoes. Tokyo Gas, together with 15 other Japanese entities, mostly industrials,
formed a ‘Carbon Neutral LNG Buyers Alliance’ last year. Tokyo Gas established the association in order to increase the distribution and penetration of carbon-
neutral LNG supply to Japanese end-users. The company could be looking to leverage deals with existing suppliers, such as Shell, or source it from plants like
Woodside’s Pluto and Santos’ Darwin – which have all come out to say they are looking into the supply of carbon-offset LNG cargoes for customers.
14 World Gas Conference 2022Different pathways to decarbonize gas
Gas continues to play an important role
in a future lower-carbon economy
Power Buildings Industry Transport
Heat
• Reliability and resilience • Seasonal gas storage for • High temperature • Molecule fuel energy
• Complement intermittent peak demand months process heat density advantages
renewables • Boilers catering to • Feedstock molecule for • Supports long
• Managing intraday load fluctuating intraday petrochemicals distances, heavy-duty
variations heating demand vehicles
Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg
Source: BloombergNEF. Image source: Bloomberg Mercury.
15 World Gas Conference 2022Different pathways to decarbonize gas
Framework for how to look at
decarbonizing gas
Continue to use Carbon capture, + Offsets
• Energy efficiency utilization and storage
• Reduce emissions
Natural Blue hydrogen
Gas
Low/zero-carbon
Hydrogen
Switch alternatives
Biomethane
Synthetic gas
Source: BloombergNEF. Note: Visualization is for illustrative purposes.
16 World Gas Conference 2022Different pathways to decarbonize gas
‘Clean gas’ technologies can play a key
role in meeting net-zero goals ● Renewable electricity can substantially help
reduce emissions, but many applications in
Decarbonized gas and low-carbon technologies today’s economy require the physical
properties of a molecule – namely, high
Carbon capture, energy density, the capacity to be stored for
Hydrogen Biomethane utilization and storage long periods, and the ability to perform
chemical reactions.
● The development of decarbonized gas
technologies, such as biomethane, hydrogen
and natural gas with carbon capture, is
Fuel for Heat for Feedstock for expected to be a crucial next step to enable
long-term climate goals to be reached.
Transport Industry Chemicals ● These technologies could replace fossil fuels
Heavy trucks Steel Cement Fertilizers in key ‘hard-to-abate’ applications, such as
Ships Paper Food Fuel refining heavy transport, heavy industry and
Aviation Plastics
dispatchable power. They also represent a
Aluminum
means for the natural gas industry to
maintain and perhaps expand its role in the
Power Buildings Products global energy mix.
● These clean gas technologies are attracting
Electricity Residential Metallurgy Food
greater investment and policy attention, but
Peaking plants Commercial Steel Glass are still far from the scale needed. A great
acceleration will be needed to meet the
goals of the Paris Agreement.
Source: BloombergNEF.
17 World Gas Conference 2022Different pathways to decarbonize gas
Biomethane is indistinguishable from
natural gas, but scale is limited
U.K. waste energy plant that Biogas, biomethane (renewable natural gas) production pathways
produces various materials,
including biogas Feedstocks Production Treatment Product Conversion End use
Food waste Boiler Heating
Source: Bloomberg
Cattle pen at a Agricultural Anaerobic
Treatment Biogas CHP Electricity
biogas plant in waste digestion
South Africa
Sewage
Upgrading
sludge
Landfill
Source: Bloomberg Biomethane Transport
waste
Digestate
residue at a Gas grid
biogas factory Energy crops Methanation Heating
injection
near a zoo in
France
Wood Thermal Gas cooling Bio-synthesis
Electricity
residue gasification and cleaning gas
Source: Bloomberg
Under
Underdevelopment
development
Source: BloombergNEF. Image source: Bloomberg Mercury. Note: CHP is a combined heat and power plant.
18 World Gas Conference 2022Different pathways to decarbonize gas
Enthusiasm for hydrogen is growing as
a decarbonization option ● Enthusiasm for hydrogen is growing as
countries and corporations look for ways to
National hydrogen strategies make good on net-zero pledges. Supportive
policies and signed offtake agreements have
emerged over the past six months, driving
investment and helping startups.
● Most participants at BNEF’s hydrogen
roundtable on March 15, 2022, expect clean
hydrogen to have the highest potential in
industrial sectors, and see Germany as the
country most likely to use large volumes the
soonest. At the same time, some said adoption
could be slower than the industry anticipates,
highlighting the need to stimulate demand.
28 Available
Framework for evaluating suitability
of hydrogen for end uses
22 In preparation
3 Support for pilot and
demonstration projects
8 Initial policy discussions
5 No activity
101 Not assessed
Source: BloombergNEF. Note: Announcements as of January 6, 2022.
19 World Gas Conference 2022Copyright and disclaimer
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