Europes’s increased need for liquefied natural gas (LNG) will likely intensify competition with Asia for limited new supply available over the next two years and may dominate LNG trade over the long term, energy major Shell stated in its LNG Outlook 2023.
To replace Russian pipeline gas imports, Europe turned to liquefied natural gas (LNG), driving prices to record levels to attract cargoes. A contraction in Chinese gas demand, a drop in South Asian imports and new US LNG supply supported Europe's need for LNG. As a result, LNG trade flows reversed in 2022 with the largest import growth seen in Europe and the biggest drop in Asia and South Ameriaca.
Gas will be needed in the long term to balance energy systems as the world transitions to a lower-emission future. And for that, gas needs to be decarbonised, especially for use in hard-to-electrify sectors, transport and heating.
In the near-time. the global LNG market is expected to remain tight and exposed to supply and demand shocks, with limited new supply coming online. More investment in supply wil be needed to meet future LNG demand.