3. Trade

3. Trade

Highlights

•International LNG transactions are the main driver of the expansion in global natural gas trade through the forecast period, with LNG trade reaching 546 bcm by 2024 from 432 bcm in 2018. People’s Republic of China (“China”) and other emerging Asian markets continue to be responsible for most of this growth.

•China becomes the largest LNG importing country in the world by 2024 at 109 bcm, ahead of Japan. China alone accounts for almost one-third of the growth in global LNG trade to 2024. Pipeline imports from Russian Federation (“Russia”) and the Caspian countries are another source of import increases, accounting for 48% of the country’s total imports by 2024 and reaching 100 bcm/y – China also becomes the largest pipeline importer during the forecast period.

•The United States is the leading source of natural gas exports (both for pipeline flows to Mexico and LNG exports) and accounts for two-thirds of global LNG supply growth. Altogether, the United States, Australia and Russia are responsible for almost 90% of the increase in LNG exports to 2024. The United States surpasses Qatar and Australia to

become the world’s largest LNG exporter by the end of the forecast period, at 113 bcm in 2024.1

•Europe’s supply gap widens to reach 336 bcm by 2024, increasing by almost 50 bcm/y during the forecast period, as domestic production continues its decline with the phasing out of the Groningen field and depletion in the North Sea. This gap is bridged by a combination of additional LNG and pipeline imports from both traditional suppliers and new sources.

•After several years of decline, investment in new LNG export projects rebounded in 2018 and further accelerated in early 2019, with a strong number of projects expected to achieve their final investment decision in the course of the year. These developments enable further growth in global LNG trade, yet spare capacity margins erode by the end of the forecast period in spite of these additions. Recent charter rate volatility prompted orders for new LNG carriers; however, additional orders will be needed to keep the LNG shipping market balanced beyond 2022.

Global natural gas trade

The recent growth in interregional2 natural gas trade mainly owes to the development of liquefied natural gas (LNG) flows, whereas interregional pipeline trade has remained stable and concentrated around a limited number of trade axes – from Eurasia to Europe and China, and from North Africa to Europe.

Figure 3.1 shows that interregional trade is expected to continue to grow in a similar fashion during the forecast period, with a strong contribution from LNG as well as an increase in pipeline flows between Eurasia (both Caspian countries and Russian Federation (“Russia”) and China.

Figure 3.1 Interregional natural gas trade balance, LNG and pipeline imports and exports, 2014–24

The future growth in interregional natural gas trade is mainly driven by Asian LNG and pipeline gas on the imports side and by North American LNG and Eurasian pipeline gas on the exports side.