An association of 84 companies involve in global liquefied natural gas (LNG) trade is working to ensure that a stable supply of LNG remains available as the Russia-Ukraine conflict continues to escalate.
As uncertainty persists over Europe’s economic stability and rising energy prices, concerns have been raised over the potential reduction or disruption of Russian natural gas supplies and the increased risk of energy shortages.
The lack of policy and necessary framework could create an environment in which higher amounts of coal and oil are burned, putting into question the attainment of net zero targets.
The sustained provision of LNG could help lower the risk of incoming energy shortages, according to members of GIIGNL - the International Association of LNG Importers.
Over the past 60 years, commercial LNG trade has expanded to involve around 44 importing markets and 20 exporting countries, with a fleet of 640+ LNG vessels.
The global decarbonisation agenda has seen LNG jump the queue to now account for more than half of the international natural gas trade.
This is partly due to an attempt to diversify energy supply by integrating renewables and substituting coal and other traditional fuels in power and hard-to-electrify sectors.
LNG has also revealed itself as a flexible energy source ready to be deployed where energy is most needed, such as Japan following the ‘Great Earthquake’ in 2011.
Nuclear power stopped producing in 2014 but imported cargoes from the global LNG market helped kickstart natural gas-fired generation, boosting the country’s ability to sustain its power sector.
Demand for natural gas is set to increase as regions such as Asia undertakes large-scale coal-to-gas switching and production slows down in Europe and South East Asia.
To avoid unnecessary price spikes, GIIHNL has suggested that – to preserve LNG’s affordability – diversification across the entire supply chain is necessary, from production to liquefaction, shipping, receiving terminals and storage.
Commenting on this necessity, Jean Abiteboul, President, GIIGNL, said, “The recent Russia-Ukraine conflict is highlighting the importance of energy supply security and diversification.”
“The LNG market is growing quickly and the recent price hikes indicate astructural imbalance between demand and supply growth.”
“On the pathway to a decarbonised world and in the face of looming energy shortages, cooperation between importers, governments and producers is urgent in order to fast-track investments in all stages of the LNG supply chain and to implement all possible measures to guarantee reliable LNG supplies,” he added.
GIIGNL promotes three main factors to help develop the sustainability and usage of LNG:
· The improvement of safety and efficiency of LNG import activities through experiencing sharing between LNG operators.
· Dialogue to address contractual and logistical obstacles to LNG trade.
· Initiatives to enhance sustainable and drive transparency on GHG emissions from the LNG train.