REPORT HIGHLIGHT

The global Liquefied natural gas (LNG) market is valued at $ 13.7 billion with projected growth of 4.8% (CAGR) till 2027 to rise to $ 19.7 billion by the end of 2027. Market demand for LNG was 376.2 million tons with a volume forecast of 560.2 million tons in 2027. Rapid growth in infrastructure, favorable government regulations and increasing demand for eco-friendly energy sources are driving factors for the growth.

LNG is a type of natural gas which is also referred to as a colorless and non-toxic liquid that is cooled at -260-degree F. Because of its liquid form, it is easy for long-distance transportation of gas. At the destination, it again turns back into gas at regasification plants then it is supplied to industries, homes, or power generation plants via a network of pipelines.

Market Dynamics

The rapid expansion of pipeline infrastructure and upcoming production projects are expected to come in line with demand growth trends that are supporting low prices and affordability. Demand growth in the LNG market is expected to be driven by many developing countries such as India and China in the APAC region and countries like Brazil in South America. The need to shift to eco-friendly energy sources to control adverse climate conditions and pollution is the main factor for increased demand. Technological advancement in the petroleum industry is helpful to improve production at lower costs. Moreover, favorable government regulations, rapid industrialization & urbanization are major factors for growth.

Some of the major drivers of supply-side growth for LNG are large conventional projects of the United States in gas reservoir countries like Russia & the Middle East. Price volatility of petroleum products in the international market threatens the long-term practicality of these projects. Several small-scale expansions on the supply side are motivated by demand in Southeast Asia, & the Caribbean. Apart from that, lack of transportation pipeline infrastructure for a long distance is also a restricting factor for exports. Large investment in LNG projects in the USA, Russian, and Africa brought large export capacities. But low demand in emerging markets due to several reasons are challenging pricing and profitability of these projects. 

For fulfilling increasing demand and maintain the viability of projects, industrial players will have to manage costs with technological developments. They will also need to develop sophisticated sales and distribution strategies to meet the different demands of emerging buyers spanning geographies. Further, strategic downstream investments in new markets will help lock in demand and target high growth prospects.

Another key driver for the growth of LNG in developing countries is the policy being drafted by various governments regarding energy security across countries, improve sustainability and also reduce dependency on petroleum and the global oil market. Policymakers and manufacturers likewise are incentivized to boost up the production of Liquefied natural gas.

An increase in FDI and investments from major companies in emerging economies are helping boost the LNG infrastructure. Many companies are investing in countries where access to other sources of energy is costly, and hence developing an alternate source of energy would be fruitful for the economy. Subsidies and incentives provided by the government likewise are helping pull investors into their economies to help build the required infrastructure for production.

Application Takeaway

Major bifurcation in LNG markets can be done based on applications. There are main 3 applications: transportation, power generation, and mining & industrial application. Power generation is expected to deliver most of the growth in the upcoming decade given the movement from conventional power generation sources to climate-friendly energy sources. In 2019, the power generation segment accounted for 47.1% share of total volume. Increasing urbanization and the need for a large public transportation network are increasing possibilities of transportation applications. Many vehicles and transportation facilities are shifting to LNG because of its clean nature as well as certain subsidies received on it. For industrial applications, a major shift in technology and logistics network for LNG is required for major growth prospects.

Type Takeaway

Liquefication technology can be another segmentation parameter. Major 2 types of liquefication are in use currently: APCI (atmospheric pressure chemical ionization) & Cascade liquefaction. Technological application for liquefication is based on several parameters such as gas application, a distance of transportation, and storage needs. Currently, APCI liquefication technology is the most prominent and captures a majority of the market share. This is because of the ease of availability in technology required to produce. The technology also ensures the scalability of production and ensures there is enough supply.

Alternatively, improvement in technology is helping the cascade liquefication technology gain prominence and grow at a fast rate.

Regional Takeaway

Global LNG markets are segmented into 5 zones: North America, Europe, APAC and Latin America, Middle East, and Africa regions. The Asia Pacific and Latin America are major demand driving regions while North America, Middle East & Russia are supply-side leading regions. Currently, Qatar is the largest LNG exporter in the world with an annual volume of 104.8 billion cubic meters in 2019. The Middle East is expected to gain a substantive position in global export markets during the forecast period of 2020-2027.

The Asia Pacific is expected to deliver strong growth in the upcoming decade with countries such as India, China is looking for increasing imports of new eco-friendly energy sources. Increasing population and infrastructure development to support the needs of increasing migration towards cities in these developing countries are major factors for demand growth. Rapid investment in pipeline infrastructure and supportive policies are creating nurturing setup for industrial players to expand their network in these regions. Several LNG companies are investing in upcoming projects because of lower initial investment compared to other petroleum projects. These investments can contribute to anticipated growth in demand for clean energy sources.

COVID-19 Impact

Even before the COVID-19 crisis, LNG markets were facing a serious issue of price volatility due to excess supply. Major demand from the countries such as India, China, Japan was hit with an economic slowdown because of COVID controlling measures. European markets were the last resort for LNG suppliers as demand in the region was increasing because of reduced domestic gas production. With a saturated storage level, European markets also reduced imports. Even though China, the largest emerging importer of LNG, recovered relatively quickly from pandemic impact, the annual growth rate was low comparatively. Because of reduced industrial activities, power demand was reducing which directly impacted the need for power generation which is the largest sector for LNG applications. Even though demand is expected to grow in the medium and long term, the COVID impact dampened the growth perspective this year.

Key Vendor Takeaway

A supply-side major player in LNG global markets includes Total, Chevron Corporation, Petronet, China National Petroleum, Snam SPA, Petro China Ltd., Royal Dutch, British Petroleum, Equinor ASA, Garprom, Eni SPA, Conoco Phillips Company, Exxon Mobil, Cheniere Energy, and Royal Dutch Shell

LNG demand in developing regions is driving growth for these major players. For an instant, Exxon Mobil in 2019 signed a purchase agreement with Zhenjiang Provincial Energy for the supply of 1 million metric tons of LNG over the next 20 years. Exxon Mobil planned to fulfill this demand with technological & infrastructural development as well as investments & partnerships with other global market players.

Patro China in 2019 entered a memorandum of understanding with JERO Inc. for LNG business. Companies are said to develop demand planning for LNG and optimization of current business for future business expansion. Increasing demand for green energy sources is improving opportunities for regional players for technological collaboration to improve the supply of LGN with reduced cost of production.

The market size and forecast for each segment and sub-segments has been considered as below:

• Historical Year – 2016 to 2019
• Base Year – 2020
• Estimated Year – 2021
• Projected Year – 2021 to 2027

SCOPE OF THE REPORT

The scope of this report covers the market by its major segments, which include as follows:

GLOBAL LIQUEFIED NATURAL GAS MARKET KEY PLAYERS

• Total
• Chevron Corporation
• Petronet
• China National Petroleum
• Snam SPA
• Petro China Ltd.
• Royal Dutch
• British Petroleum
• Equinor ASA
• Garprom
• Eni SPA
• Conoco Phillips Company
• Exxon Mobil
• Cheniere Energy
• Royal Dutch Shell

GLOBAL NATURAL GAS MARKET, BY TYPE

• APCI Liquefaction technology
• Cascade Liquefaction technology
• Other Liquefaction technology

GLOBAL LIQUEFIED NATURAL GAS MARKET, BY APPLICATION

• Transportation Fuel
• Power Generation
• Mining and Industrial
• Others

GLOBAL LIQUEFIED NATURAL GAS MARKET, BY REGION

• North America
  • The U.S.
  • Canada
• Europe
  • Germany
  • France
  • Italy
  • Spain
  • the United Kingdom
  • Rest of Europe
• Asia Pacific
  • India
  • China
  • South Korea
  • Japan
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of LATAM
• The Middle East and Africa
  • Saudi Arabia
  • the United Arab Emirates
  • Rest of MEA