IGU: Europe and Asia will compete for LNG cargoes before summer

The International Gas Union stated on Thursday that the competition for liquefied gas will increase this year as Europe continues to rely on the chilled fuel following the cessation of Russian gas supplies via Ukraine, and Asian buyers continue to seek cargoes in order to meet cooling requirements.

Why it's important

The LNG fuel is seen by many as a transitional fuel to zero emissions.

Prices could rise this year due to increased regional competition, especially as Europe will need to replenish its depleted gas storage after Russian gas supplies via Ukraine ended on January 1, 2019.

IGU is the largest global gas association with over 130 members from more than 70 countries. It represents most of the gas industry in the world.

KEY QUOTES

In the report, IGU President Li Yalan said: "The global LNG markets equilibrium is fragile and vulnerable to uncertainty from both the supply and demand side."

The energy landscape is characterized by considerable uncertainty, including in terms of geopolitics, trade and regulatory policy.

By the Numbers

The global LNG trade is expected to grow by 2.4% or 9.8 millions tons to 411.2million tons in 2024 due to an increase in liquefaction and increased exports of key producers such as the U.S.A., Russia and Australia.

The largest increase in imports was to Asia, which grew by 12,5 million tons on an annual basis to almost 118 million tonnes. China and India saw a strong increase in spot imports due to heatwaves, increased infrastructure and a greater reliance on gas-fired electricity.

China remains the largest LNG importer in the world, with 78.6 millions tons of LNG imported, an increase of 7.5 million tonnes from 2023.

Japan and South Korea both imported LNG at a moderate rate, with 67.7 and 47 million tonnes respectively.

Europe's imports dropped sharply, to their lowest level since 2021. They fell by 21.2 millions tons to 1000.1 million tons, due to the high levels of gas stored at the beginning of the year, the sluggishness in demand, the steady pipeline flow and the high output from renewables.

The U.S. led the LNG exporters with a total of 88.4 millions tons. This is up 3.9million tons since 2023. Australia was second with 81.25 million tons. Qatar came in third with 77.2 million tonnes, and Russia came in fourth with 33.5 million.

(source: Reuters)