LNG use will be crucial to nations’ energy transitions

Significance

LNG is cleaner than most fossil fuels but still incompatible with net zero emissions. India, China and other Asian economies see LNG imports as a ready and economically viable means of displacing coal and oil use. Natural gas and then LNG demand will eventually peak as the energy transition accelerates over the next 20 years.

Impacts

• LNG market growth will embed fossil fuel use and infrastructure in developing economies’ energy mixes.
• Recent market volatility and record spot LNG prices may reverse the trend of greater reliance on spot transactions than long-term contracts.
• Although the greenhouse gas (GHG) benefits of LNG use in transport are far from clear, it will gain market share in the next few years.
• LNG project developers will seek to cut GHG emissions from their projects to prolong LNG's attractiveness in the energy transition.