LNG Market Tightness Expected to Persist Through 2022

The global liquefied natural gas (LNG) market is expected to remain tight in 2022 due to supply-demand imbalances, according to Shell. The company's executive vice president, Steve Hill, attributed the high prices to fundamentals such as low storage levels and supply uncertainty.

Last year, LNG demand rose by 6 percent, reaching 380 million tons, while natural gas prices surged to an all-time high of $56 per mmBtu in October. Benchmark prices currently stand at around $25 per mmBtu.

The lack of new supply and reduced investment in LNG are contributing factors to the tight market, Shell said. The company forecasts that global trade will continue to grow, with demand expected to almost double to 700 million tons by 2040.