How Asia changed the global LNG market in one year

How Asia changed the global LNG market in one year

Resilient demand, price recovery and ‘green' liquefied natural gas (LNG) all being driven by Asian buyers, reckons Wood Mackenzie Asia Pacific Vice Chair Gavin Thompson.

The past year has undoubtedly been the most dramatic in the history of the global LNG industry. Demand buffeted by lockdowns and recession, liquefaction shut-in, pre-final investment decision (FID) supply projects delayed and spot LNG prices crashing to all-time lows before going into orbit.

Yet as the world experienced its worst economic crisis since the great depression, with commodity demand tumbling across numerous sectors and oil prices briefly turning negative, Asian LNG markets proved remarkably resilient. Led by China, but with others including India playing their part, Asian LNG demand increased by around 6 million tonnes in 2020, higher than demand growth in pre-pandemic 2019. Economic resilience and pro-gas policies across much of Asia supported a broader recovery in LNG demand and the return to stability in spot prices. Meanwhile, Asian buyers' appetite for ‘green' LNG has accelerated over the past year, redefining how cargoes will be sold in the future.

Asian LNG demand resilience

Strong demand, weak domestic production and supportive policies mean Asia will account for an incredible 95% of global LNG demand growth