(Adds more detail, quotes)
By Nina Chestney
LONDON, Feb 20 (Reuters) - Global demand for liquefied
natural gas (LNG) is expected to double to 700 million tonnes by
2040, with gas continuing to play a key role in a lower-carbon
energy system, Royal Dutch Shell's annual market outlook said on
Thursday.
Global LNG demand grew by 12.5% to 359 million tonnes last
year. Asia is expected to remain the dominant region in the
decades to come, with South and South-East Asia generating more
than half of the increased demand, the report said.
"The global LNG market continued to evolve in 2019, with
demand increasing for LNG and natural gas in power and non-power
sectors," Maarten Wetselaar, integrated gas and new energies
director at Shell, said.
"Record supply investments will meet people's growing need
for the most flexible and cleanest-burning fossil fuel."
Natural gas emits between 45% and 55% fewer greenhouse gas
emissions and less than one-tenth of the air pollutants of coal
when used to generate electricity.
Last year, a record 40 million tonnes of additional supply
became available to the market and there was record investment
in liquefaction capacity of 71 million tonnes.
European imports increased by 74%, as gas was more
competitive to burn than coal in the power sector.
Global LNG prices have fallen to record lows this winter as
mild weather and the coronavirus outbreak in China reduced
demand amid ample supply.
"While we see weak market conditions today due to record new
supply coming in, two successive mild winters and the
coronavirus situation, we expect equilibrium to return,"
Wetselaar added.
That will be "driven by a combination of continued demand
growth and a reduction in new supply coming on-stream until the
mid-2020s", he said.
In China, LNG imports increased by 14% last year due to
efforts to improve air quality. LNG imports also grew in
Bangladesh, India and Pakistan, the outlook showed.
(Reporting by Nina Chestney; Editing by Jan Harvey)
