A new study released by energy market intelligence firm Rystad Energy forecasts global spending on liquefied natural gas (LNG) infrastructure to increase by 50% to $42 billion by 2024.
The report states that the increase in LNG investments will be driven by an upsurge in energy demand, which will be motivated by a short-term rise in natural gas demand in Europe and Asia as a result of the Russia-Ukraine war.
Palzor Shenga, vice president of analysis, Rystad Energy, stated that “Recent price surges in natural gas markets worldwide have somewhat constrained gas demand, triggering a resurgence of coal-fired power generation in many countries. However, governments remain bullish on gas as an affordable, transition fuel for power in the coming years as demonstrated by the rapid growth in LNG infrastructure investments.”
However, the research firm anticipates spending on greenfield LNG projects to decline in 2022 from $28 billion in 2021 to $27 billion. With the demand for LNG growing, an increase in LNG project sanctioning is expected to rise in 2023 with spending nearing $32 billion in 2023 and $42 billion in 2024.
With the demand for gas expected to surge 12.5% through 2030, from 4 trillion cubic meters (Tcm) to around 4.5 Tcm, Rystad Energy predicts the supply of this gas in LNG form to increase from 380 million tons per annum (Mtpa) in 2021 to about 636 Mtpa in 2030 to peak at 705 Mtpa in 2024.
While the US will strengthen its position as the world’s top LNG exporter, markets such as Qatar, Mozambique and Russia will play a significant role in ensuring energy security and decarbonization through LNG during the forecast period.