LNG is a highly transportable energy vector that has proven its potential as an alternative to coal and refined petroleum products. Many countries rely on revaporised imported LNG for power generation on gas-fired turbines. The war in Ukraine has also highlighted the value of LNG as a flexible energy vector: LNG tankers can be re-routed to those most in need, and terminal inventories can act as a buffer in long supply chains.
As a result of the Ukraine war and the resulting sanctions against Russia, supplies of LNG derived from shale gas in the US and from conventional natural gas from Africa and the Middle East will substitute Russian pipeline gas in Central Europe. With increased demand for LNG in Europe and continued strong demand in Asia, shipped LNG cargoes are likely to increase through this decade and ‘peak-LNG’ may be as late as the mid-2040s.
Despite the array of clean energy challengers such as green hydrogen, the construction of additional hydrogen-ready gas-fired power stations, LNG terminals and regasification facilities will be inevitable. And in the short-term, floating regasification units or floating power plants will also be used until additional shore-side infrastructure has been built.
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