2020 saw both extreme market oversupply and extreme tightness
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The price volatility seen in late 2020 and early 2021 is likely
to remain for the medium term.
A tight balance between supply and demand to 2025 will create fluctuating prices as unpredictable events flip the market between tightness and excess supply.
Asia will continue to drive global LNG demand growth. However, China becomes less important as a driver for LNG demand beyond 2035 and will see demand peak around 2040. South and Southeast Asia will take over as key demand drivers.
2020 market demand was driven by China and India growing a combined 9.5 metric tons (MT)
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LNG demand grew by 1%
in 2020, while global gas demand declined. Longer term, the share of LNG in the global gas supply will increase from today’s 13% to 23% by 2050 as it meets demand growth and replaces declining pipeline and domestic gas.
LNG demand is resilient
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Approximately 200 MT of additional liquefaction capacity is needed by 2050. A majority
of this will likely come from US projects representing the long-run marginal LNG-supply capacity and will need to differentiate either commercially or by emission intensity.
138 MT of LNG capacity is currently under construction
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Gas demand in the transport sector is set to grow by 50 billion cubic meters by 2035 with a compound annual growth rate of 2.2%. Gas for power will decline in Europe, Japan, and North America. Industrial and chemical gas demand will grow past 2035.
The energy transition will reshape gas-demand use
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