Experts at the latest GECF Monthly Gas Lecture forecast a steady demand for liquefied natural gas (LNG) in the 2020-21 winter season due to the pandemic and resulting economic slowdown.
The panel at the virtual ‘Winter Outlook for Global LNG – Cautiously Optimistic’ event conducted by experts from leading information provider, Refinitiv expect the overall demand to by 4 billion cubic meters (bcm) this winter season with the year-on-year demand mainly driven by South Asia.
The representation from Refinitiv remarked that with 4 billion cubic meters (bcm) demand arriving from South Asian countries like China and Japan being canceled of with lesser demand of 3 bcm led by the US, global LNG demand is expected to be just 1 bcm more than last year’s winter season.
Even though the pandemic and subsequent economic slowdown contributed to subdued demand for LNG, the panel also observed natural variations such as slightly warmer winter in the northern hemisphere driving the demand down.
Varied effects on LNG demand
The panel observed that LNG demand in the world’s largest buyer Japan decreased by about 4 percent due to the shutting down of factories and warmer winter, the third-largest LNG buyer, South Korea showed an increase of 7 percent in overall demand for LNG as the government moved away from coal-fired power plants to lesser polluting gas alternatives to generate energy.
The expert panel anticipated that “while the economic recovery is still very slow in Japan, we do see the La Nina weather pattern emerging for this winter and that will mean colder temperatures than last winter, boosting demand for heating.”
Meanwhile, South Korea may see its LNG demand drop by almost 10 percent as energy from nuclear power plant begin to contribute more towards the overall energy production along with lesser coal-fired power plants being closed next year.