LNG industry rebounds in 2021 amid supply constraints and volatile prices.

The global trade in liquefied natural gas (LNG) increased 6% to 380 million tonnes during 2021 as many countries rebounded from the economic impact of the COVID-19 pandemic, according to Shell's latest annual LNG Outlook published today.

Rising LNG demand, combined with supply constraints, caused gas and LNG prices to remain volatile throughout the year. Prices reached record levels in October 2021 as Europe, with historically low storage levels, struggled to secure LNG cargoes to meet expected winter gas demand.

The volatility emphasises the need for a more strategic approach to secure reliable and flexible gas supply in future to avoid exposure to price spikes. An LNG supply-demand gap is forecast to emerge in the mid-2020s and focuses attention on the need for more investment to increase supply and meet rising LNG demand, especially in Asia.

"Last year showed just how crucial gas and LNG are in providing communities around the world with energy they need as they strived to get back on track following the difficulties caused by the COVID-19 pandemic." said Wael Sawan, Integrated Gas, Renewables and Energy Solutions Director at Shell.

As countries develop lower-carbon energy systems and pursue net-zero emissions goals, focusing on cleaner forms of gas and decarbonisation measures will help LNG to remain a reliable and flexible energy source for decades to come.

LNG exports grew in 2021 despite a number of unexpected outages that dented LNG available for delivery. The USA led export growth with a year-on-year increase of 24 million tonnes and is expected to become the world's largest LNG exporter in 2022.

China and South Korea led the growth in LNG demand...