The world’s two largest economies, the United States and mainland China, are poised to be the world’s top export and import markets for liquefied natural gas (LNG) by 2022, highlights a new report from IHS Markit.
The report, titled LNG Trade in 2021: Runaway Recovery, describes that the United States, which was the third-largest exporter of LNG behind Australia and Qatar for all of 2021, is poised to claim the top spot in 2022.
The United States was the largest source of LNG supply growth in 2021, adding 25 million metric tons (MMt) amid continued build-up of liquefaction capacity, as well as increased production from plants that were downsized for the year. previous.
Average utilization of plants in the United States increased 43% in the third quarter of 2020, to 98% in the third quarter of 2021.
Meanwhile, according to IHS Markit, mainland China has already become the world’s top LNG importer.
Imports reached 81 MMt in 2021 (an increase of 12.3 MMt or 18%), surpassing Japan, where imports remained stable year after year at 75 MMt.
This is the first time since the early 1970s that Japan has not been the world’s largest importer of this gas.
“A new LNG map is taking shape as 2021 became the year of rapid recovery, making the oversupply and low prices of 2020 seem like a distant memory,” said Michael Stoppard, chief strategist at global gas from IHS Markit.
“It is a tale of two markets with China driving increased demand as the world’s leading importer and the United States poised to become the world’s leading exporter, providing the supply boost,” he added.
Among other key LNG trends noted in the report:
Long-term contract signings rebounded to an all-time high after a hiatus in 2020.
More than 65 million metric tons per year (MMtpa) of long-term firm contracts were signed in 2021, surpassing the previous record of 61 MMtpa in 2013.
Among sellers, firms were more or less evenly divided among portfolio providers from the United States, Russia, and Qatar.
In a notable sign of potential investment trends in 2022, the US projects were by far the largest source of pre-final investment decision (FID) contracts, as most of the contracts signed in Qatar and Russia were for existing or under construction capacity.
Among buyers, mainland China was by far the largest specified end market, with Chinese buyers signing around 25 MMtpa of long-term firm deals.