H1 2023: In June 2023, QatarEnergy signed definitive agreements with China National Petroleum Corporation (CNPC). The companies signed binding agreements for the long-term supply of liquefied natural gas (LNG) to China and collaboration in the North Field East LNG expansion project (NFE). A 27-year long-term LNG Sales and Purchase Agreement (SPA) has been inked between CNPC and Qatar. According to the agreement, 4 million tonnes of liquefied natural gas would be delivered annually from the NFE project to the receiving terminals of CNPC in China. In June 2023, Equinor and Cheniere agreed to a 15-year Sales and Purchase Agreement (SPA) for the purchase of about 1.75 million tonnes of LNG annually. Half of the supply is expected to start in 2027. With the addition of this new agreement, Equinor's committed volumes with Cheniere now amount to about 3.5 million tonnes annually. By the agreement, Equinor's planned LNG exports from Cheniere's LNG terminals along the Gulf of Mexico will practically quadruple. In the same month of June, a collaboration contract was inked by NOVATEK to carry out a small-scale LNG investment project in the Tula Region. The agreement calls for the development of a small-scale LNG facility in the Tula Region on land belonging to the "Uzlovaya" special economic zone. The plant will have an annual production capacity of 126 thousand tonnes. This LNG facility in the Central Federal District of the Russian Federation will provide LNG as both an off-grid energy source and as vehicle fuel through an LNG fueling network.
The global liquefied natural gas (LNG) market is expected to experience substantial growth in the coming years due to the increasing demand for electric power from clean energy sources. This growth will be further supported by a rising focus on distributed power and utility projects over the next few years. As natural gas becomes more prevalent in the power generation sector, the demand for LNG is also expected to rise in various countries.
LNG is natural gas that has been cooled to a liquid state for ease of storage and transportation, enabling its movement across long distances and to regions without access to natural gas pipelines. Coal remains a dominant source of electricity generation globally, but due to concerns about depleting coal reserves and its environmental impact, there has been a noticeable shift toward using natural gas and other renewable energy sources for electricity production. The market plays a vital role in meeting the world's increasing demand for cleaner and more sustainable energy sources.
Market Drivers
Rising Demand for LNG as Cleaner Fuel for Electricity Generation
The global demand for electricity from clean energy sources has witnessed a remarkable surge, propelling the liquefied natural gas (LNG) market to new heights. As concerns over greenhouse gas emissions and environmental impact intensify, governments and industries worldwide are seeking cleaner alternatives to traditional fossil fuels like coal. LNG has emerged as a viable solution, offering a cleaner burning fuel option for electricity generation. With its lower carbon footprint compared to coal and other hydrocarbon-based fuels, LNG has become a significant player in the transition towards more sustainable energy sources. The shift towards LNG in electricity generation is expected to have far-reaching implications on the global energy landscape, fostering a greener and more environmentally responsible future.
Expanding LNG Market Through Distributed Power and Utility Projects
A key factor driving the expansion of the global LNG market is the growing emphasis on distributed power and utility projects. These initiatives involve generating power from smaller-scale sources that are situated closer to the end-users, decentralizing the energy production process. Distributed power systems benefit from the flexibility and efficiency of LNG as a fuel choice, making it an attractive option for powering remote areas and regions lacking access to traditional power grids. The inherent advantages of LNG, such as ease of storage and transportation, enable efficient delivery to these decentralized energy systems. As governments and organizations prioritize sustainability and energy security, the rising interest in distributed power and utility projects is set to boost the demand for LNG, opening up new opportunities for market growth and innovation in the energy sector.
Furthermore, the increased adoption of natural gas in the power generation business is contributing to the surge in LNG demand worldwide. Governments and industries are embracing natural gas as a transitional fuel, given its lower carbon emissions compared to coal, oil, or other hydrocarbon-based energy sources.
Market Restraints
Capital-Intensive Infrastructure Development
One of the significant challenges facing the global LNG market is the capital-intensive nature of infrastructure development. Establishing liquefaction terminals and regasification facilities requires substantial investments due to the sophisticated technology and engineering involved. These facilities are crucial for the liquefaction of natural gas into LNG and the subsequent regasification process before distribution and consumption. The financial burden of setting up these facilities can pose obstacles for new market entrants and countries seeking to expand their LNG capabilities. Moreover, the long lead times associated with constructing such infrastructure can impact supply chain timelines and the ability to respond quickly to changing market dynamics.
Geopolitical Factors and Trade Dynamics
Geopolitical factors and international trade dynamics present another set of challenges for the global LNG market. As LNG is traded across international borders, geopolitical tensions can lead to disruptions in supply chains and impact market prices. Political conflicts or trade disputes between exporting and importing countries can lead to restrictions or tariffs, influencing the flow of LNG to specific regions. Uncertain regulatory environments in some countries can also affect the stability of long-term contracts and investment decisions in the LNG sector. Additionally, changing trade policies and agreements can create uncertainties, making it difficult for industry players to plan for the future with confidence. Navigating these geopolitical complexities requires strategic foresight and risk management to mitigate potential disruptions to the global LNG market.
Trends & Opportunities
Growing Adoption of Floating LNG (FLNG) Facilities
The global LNG market is witnessing a significant trend with the increasing adoption of Floating LNG (FLNG) facilities. These innovative offshore floating vessels enable LNG production directly at offshore gas fields, eliminating the need for costly onshore infrastructure and reducing environmental impacts. FLNG offers various advantages, including improved access to remote offshore gas reserves, enhanced efficiency, reduced transportation costs, and faster deployment compared to traditional onshore LNG plants. Additionally, FLNG facilities adhere to advanced environmental and safety standards, contributing to reduced greenhouse gas emissions and minimizing the impact on coastal ecosystems. As the demand for LNG rises and offshore gas reserves become more critical, the adoption of FLNG technology is expected to grow, transforming the dynamics of the global LNG market, and expanding LNG production to previously untapped areas.
The future of the global LNG market appears promising, with a projected compound annual growth rate (CAGR) of 5.12% expected over the next decade. As the world continues to prioritize reducing carbon emissions and transitioning to cleaner energy sources, LNG is positioned to play a pivotal role in the global energy mix. Technological advancements in LNG infrastructure, evolving trade agreements, and ongoing efforts to decarbonize the energy sector are likely to shape the market's growth trajectory in the years to come.
End-Use Analysis
Power generation, industrial use, residential and commercial sectors, and others are the key end users of liquefied natural gas across the world. Among these, the power generation segment led the global market with a value of around US$ 63,100 Million in 2022. The segment is expected to continue its dominance over the forecast period due to the increasing focus on sustainable clean energy sources.
The second leading end user in this market is the industrial use segment, which is projected to retain its position over the next few years. The industrial use of LNG is expected to grow as industries continue to prioritize sustainability and seek more environmentally friendly energy sources to power their operations. As a versatile and cleaner fuel option, LNG provides a viable solution for meeting industrial energy needs while reducing carbon footprints.
Regional Analysis
The LNG market reports its presence across North America, Europe, Asia Pacific, South America, and the Middle East and Africa. Asia Pacific has surfaced as the largest and most dominant market for LNG across the world. China's rapid economic growth has led to a surge in LNG imports to meet its increasing energy needs and reduce air pollution from coal. India's rising energy demand and focus on cleaner energy sources have also boosted LNG imports significantly. The region's LNG market is witnessing infrastructure expansion in many economies, enhancing supply capabilities, which is likely to support the regional market over the forthcoming years.
Among other regions, North America has a prominent presence in the global LNG market. With the United States being a significant player in the LNG market due to its shale gas boom, the region is expected to remain demonstrating healthy growth over the forecast period.
Competitive Landscape
ExxonMobil, Eni, Royal Dutch Shell, Chevron Corporation, Qatar Petroleum (QP), TotalEnergies, Petronas, BP, Novatek, and Woodside Energy are some of the key players in the global LNG market. The market is highly competitive, characterized by a diverse range of companies from various regions actively engaged in LNG production, liquefaction, transportation, and trading. Key players in the market compete based on several factors, such as production capacity, market presence, technological advancements, supply chain efficiency, and customer relationships.
The competitiveness in the market is shaped by a combination of production capacity, technological advancements, market access, and environmental considerations. As the world's energy landscape evolves, companies are adapting to changing market conditions, meeting sustainability goals, and providing reliable LNG supply to thrive in the competitive global LNG market.
Years considered for this report:
Historical Period: 2015-2022
Base Year: 2022
Estimated Year: 2023
Forecast Period: 2024-2032
This report will be delivered on an online digital platform with one-year subscription and quarterly update.
The objective of the Study:
• To assess the demand-supply scenario of LNG, which covers the production, demand, and supply of the LNG market.
• To analyze and forecast the size of the LNG market.
• To classify and forecast the LNG market based on end-use and regional distribution.
• To examine competitive developments, such as expansions, mergers & acquisitions, and partnerships, of the LNG market.
To extract data for the LNG market, primary research surveys were conducted with LNG manufacturers, suppliers, distributors, wholesalers, and traders. While interviewing, the respondents were also inquired about their competitors. Through this technique, ChemAnalyst was able to include manufacturers that could not be identified due to the limitations of secondary research. Moreover, ChemAnalyst analyzed various segments and projected a positive outlook for the LNG market over the coming years.
ChemAnalyst calculated the demand for LNG in the world by analyzing the historical data and demand forecast which was carried out considering the demand for LNG by end users across the world. ChemAnalyst sourced these values from industry experts, and company representatives and externally validated them by analyzing the historical sales data of respective manufacturers to arrive at the overall market size. Various secondary sources such as company websites, association reports, annual reports, etc., were also studied by ChemAnalyst.
Key Target Audience:
• LNG manufacturers and other stakeholders
• Organizations, forums, and alliances related to LNG distribution
• Government bodies, such as regulating authorities and policymakers
• Market research organizations and consulting companies
The study is useful in providing answers to several critical questions that are important for industry stakeholders, such as LNG manufacturers, customers, and policymakers. The study would also help them to target the growing segments over the coming years (next two to five years), thereby aiding the stakeholders in taking investment decisions and facilitating their expansion.
Report Scope:
In this report, the LNG market has been segmented into the following categories, in addition to the industry trends, which have also been detailed below:
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Attribute
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Details
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Market Size Volume in 2022
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21,222 MMBtu
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Market Size Volume by 2032
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33,330 MMBtu
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Growth Rate
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CAGR of 5.12% from 2023 to 2032
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Base Year for Estimation
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2023
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Historical Data
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2015 - 2022
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Forecast Period
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2024 - 2032
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Quantitative Units
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Demand in MMBtu and CAGR from 2023 to 2032
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Report Coverage
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Industry Market Size, Demand by End-Use, Demand by Region, Demand by Sales Channel, Demand-Supply Gap, Foreign Trade, Manufacturing Process, and Policy and Regulatory Landscape.
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Segments Covered
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By End-Use: Power Generation, Industrial Use, Residential and Commercial Sectors, and Others
By Sales Channel: Direct Sales and Indirect Sales
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Regional Scope
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North America, Europe, Asia Pacific, the Middle East and Africa, and South America.
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Pricing and Purchase Options
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Available Customizations:
With the given market data, ChemAnalyst offers customizations according to a company’s specific needs.
In case you do not find what you are looking for, feel free to connect with our custom research team at sales@chemanalyst.com
