Global LNG demand is increasing

McKinsey has researched the global outlook for gas to 2050 and has determined that gas is the only fossil fuel expected to grow beyond 2030, peaking and plateauing from 2037. From 2035 to 2050, gas demand is forecast to decline by only 0.4 percent.  This relatively moderate decline is due to hard-to-replace gas use in the chemical and industrial sectors, which limits the impact of an accelerating decline in gas used for power.

What is concerning to future global demand is the additional supply required to be discovered and/or reach FID (Final Investment Decision) from 2027 onward.  It’s not just McKinsey saying the world has a massive future LNG deficiency problem, but also others including BP, Shell and Wood McKenzie. In BP’s Energy Outlook 2023, chief economist Spencer Dale, said investment in upstream production would be needed until 2050 to ensure supply matched demand. “Natural declines in existing production sources mean there needs to be continuing upstream investment in oil and natural gas over the next 30 years,” he wrote in the report.

Natural gas and LNG are essential for the global energy transition, as evidenced by growing long-term supply contracts

Since the outbreak of the conflict in Ukraine, European and Asian countries more than most have recognized that they must reduce reliance on any one region or country’s supply of energy including natural gas.

Natural gas is both a transition and a destination fuel. Natural gas and LNG are essential for the energy transition as they play an instrumental role in shifting away from coal and moving toward net-zero emissions. As the transition evolves, natural gas will remain vital in providing reliable and efficient energy to support economies in different parts of the world including Australia and all of Asia.

The re-drawing of global energy supply maps is pushing natural gas and LNG demand to new heights and spurring new off-take contracting and other activities and opportunities for companies like Gulf Energy, for example:

  • ADNOC Gas plc signed a 14-year agreement to supply LNG to Indian Oil Corp. Ltd.  The SPA delivery of 1.2 million tonnes/year (tpy) LNG sourced from the Das Island liquefaction plant which has a production capacity of up to 6 million tpy. (Oil & Gas Journal, 14 February 2025)

  • TotalEnergies signed a long-term agreement to supply state-owned Gujarat State Petroleum Corp. Ltd. (GSPC) with 400,000 tonnes/year of LNG, amounting to six cargoes per year. (Oil & Gas, 13 February 2025)

  • A BP PLC-operated liquefied natural gas (LNG) project in Western Africa is expected to dispatch its first cargo by March. On January 2 BP said gas had started flowing from wells in the Greater Tortue Ahmeyim (GTA) field on the maritime border of Mauritania and Senegal to the GTA floating production, storage and offloading (FPSO) vessel as part of the commissioning process. Located about 40 kilometers (24.85 miles) offshore, the FPSO removes water, condensate and impurities from the gas then sends it via pipeline to a floating liquefaction vessel situated 10 kilometers offshore. (Rigzone, 10 February 2025)

  • A groundbreaking ceremony has been held for five mini-liquefied natural gas (LNG) facilities in the Nigerian state of Kogi. NNPC holds stakes in three of the projects: 90 percent in Prime LNG, 50 percent in NGML/Gasnexus LNG and 10 percent in BUA LNG. The other two plants are LNG Arete and Highland LNG. The five will rise in the town of Ajaokuta. (Rigzone, 3 February 2025)

  • Argent LNG LLC signed a heads of agreement (HoA) with the Government of Bangladesh for supply of up to 5 million tonnes/year (tpy) of LNG. Argent LNG aims to build and operate a mid-sized onshore LNG export project with up to 12 LNG trains with a combined capacity of 25 million tpy. (Oil & Gas Journal, 28 January 2025)

  • ADNOC Gas PLC has won a $450 million (AED 1.653 billion) contract to deliver liquefied natural gas (LNG) to Japan for three years. The order was placed by JERA Global Markets Pte. Ltd., owned 66.7 percent by Japanese power utility JERA Co. Inc. and 33.3 percent by France’s EDF Trading Ltd. (Rigzone, 27 January 2025)

See past activities and opportunities for companies like Gulf Energy below:

Most of the future global LNG demand will come from Asia

Australia is ‘Location Competitive’ for much of Asia

The high potential Asian market for LNG is forecast to double, but Australia hasn’t found or developed enough new gas to meet the predicted demand

Australia is closer to most high potential Asian markets than its closest LNG exporting competitors, Qatar and the USA.

Australia has failed to maintain a steady stream of new gas production projects being brought online.

More than $200 billion of LNG projects were approved for final investment decisions (FIDs) in Australia before 2012. Since then, Woodside’s Scarborough project is the only LNG capacity project to reach FID (in November 2021).

Without further investment in new LNG trains and upstream infrastructure, Australia may lose its position as a major LNG exporter and will almost certainly lose its energy security.