LNG trade growth is forecast to increase after a lacklustre 2020, according to the Office of the Chief Economist.
The July Resources and Energy Quarterly report forecast a 2.5 per cent increase this year and 7.7 per cent next year before falling to 1.6 per cent in 2023.
It said global LNG trade reached 355 million tonnes in 2020, a moderate increase in stark contrast to the growth of previous years.
The moderate growth was a direct result of the impacts of the COVID-19 pandemic on LNG demand, with growth only picking up in the first half of 2021 as the economic impacts of COVID-19 eased and a cold northern hemisphere winter increased heating demand.
“Given the large-scale expansion of global LNG capacity in recent years, import demand is expected to remain short of export capacity throughout the outlook period,” the report said.
“Beyond 2023, the global LNG market may tighten, due to the April 2021 decision to indefinitely suspend the Mozambique LNG project in response to rising security issues.”
China was tipped to become the world’s largest importer of LNG from 2022, after imports increased by 12 per cent in 2020 making it the second-largest
LNG importing company.
Australia accounted for the largest share of China’s imports in 2020, at 43 per cent.
In Japan, nuclear generation hit a three-year low during the 2020-21 winter which drove demand for LNG imports.
Although nuclear generation is expected to offset higher gas demand, causing a marginal decrease in LNG imports in 2021, the pace of gains in nuclear
generation remain uncertain and subject to potential delays.
The report said LNG demand would still fall over the next few years due to Japan’s 2030 emissions reductions target.
In South Korea, LNG imports recovered slightly after falling in 2020 because of government policies favouring gas use over coal.
After seeing a period of intense volatility due to COVID-19, gas demand in India is expected to increase again over the next few years, especially as
the government aims to lift the share of gas in its energy mix over the next decade.
In Australia, LNG export volumes were relatively resilient throughout the pandemic.
However, due to technical issues at the Gorgon and Prelude LNG plants, exports are estimated to fall marginally in 2020-21.