Global natural gas supply and demand are tightly balanced, and gas prices may remain medium-high

Global LNG imports are mainly from Asia Pacific and Europe

From the perspective of regional structure, global LNG imports mainly come from Asia Pacific and Europe. According to BP data, in 2021, the imports of Asia Pacific and Europe will be 371.8 billion square meters and 108.2 billion square meters, accounting for 72.0% and 21.0% respectively. By region:  9.0% and 7.2%, respectively; The import demand in Europe mainly comes from EU countries, of which Spain, France and Turkey will import 20.8 billion square meters, 18.1 billion square meters and 13.9 billion square meters in 2021, accounting for 19.2%, 16.7% and 12.9% respectively, and the EU accounted for 86.1% in total; Non-eu regions (including the UK) imported 15 billion cubic meters, accounting for 13.9%.

The increase in LNG exports in recent years has been mainly concentrated in the Americas

The main export regions of global LNG are Asia Pacific, the Middle East and the Americas, and the growth structure has differentiated in recent years. Since 2019, the export volume of Asia Pacific and the Middle East has remained stable. According to BP data, the export volume of Asia Pacific and the Middle East in 2021 will be 176.3 and 129.7 Bcm, with a CAGR of -0.3% and +0.8% respectively in 2019-2021. LNG exports from the Americas have been increasing in recent years, reaching 108.3 Bcm in 2021, with a 2019-2021 CAGR of + 24.5%. By the end of 2021, Asia Pacific, the Middle East and the Americas accounted for 34.2%, 25.1% and 21.0% of global LNG exports, respectively.

The Russia-Ukraine conflict in 2022 catalyzed a shift in the pattern of global gas trade

The gap between natural gas supply and demand in Europe continues to widen, and imports will depend on Russian pipeline gas in 2021 and before

The gap between natural gas supply and demand in Europe continues to widen, and imports will depend on Russian pipeline gas in 2021 and before. With the depletion of North Sea gas fields controlled by the United Kingdom and the Netherlands, natural gas production in Europe has declined year by year, and the steady rise in demand has amplified the gap between natural gas supply and demand in Europe, according to BP data, the gap between natural gas supply and demand in Europe has expanded from 296.1 billion cubic meters in 2017 to 360.6 billion cubic meters in 2021. With a CAGR of +5.1% for 2017-2021, the gap between supply and demand in 2021 represents about 63.1% of the total 571.1 billion cubic meters of gas demand in the European region during the same period. European natural gas imports are mainly from Russia, although the number of Russian pipeline gas imports in 2020-2021 has been reduced, but Europe still has a high degree of dependence on Russian pipeline gas, according to BP data, Russian pipeline gas imports in 2021 reached 167 billion square meters, still accounting for 49% of Europe's total imported gas (341 billion square meters). From the perspective of gas source structure, in 2021, imported pipeline gas and LNG accounted for 68.3% and 31.7% respectively in Europe, and pipeline gas was the main form of natural gas import. Among them, Russia, Africa, CIS and the Middle East accounted for 71.7%, 16.0%, 8.4% and 3.9% of total pipeline gas imports.

Under the Russia-Ukraine conflict, Europe and Russia launched a game in the energy field, and the global LNG trade pattern changed

Under the Russia-Ukraine conflict in 2022, in order to deal with the chaos of the global energy market and energy security issues caused by the accelerated energy system reform to end the dependence on Russian fossil energy, the European Union proposed the "REPowerEU" energy plan. In the plan, the EU proposed to import 50 billion cubic meters of LNG and 10 billion cubic meters of pipeline gas from other countries in 2022, reducing demand by a total of 38 billion cubic meters, including 20 billion cubic meters of gas reduction in the power sector, in order to gradually replace Russian natural gas, thus opening a structural shift in the global LNG trade pattern. On the other hand, Russia's anti-sanctions measures on natural gas combined with the accidental damage of the Nord Stream pipeline have significantly reduced the number of Russian pipeline gas exports to Europe in 2022.

In 2022, the global LNG trade pattern will undergo structural changes

Global LNG trade volume will maintain growth in 2022. Global LNG trade volume rose from 286 million tons in 2017 to 398 million tons (about 568.15 billion cubic meters) in 2022, with a CAGR of +6.8% in 2017-2022, with a 4.8% year-on-year growth in 2022, maintaining a modest growth. In terms of structure, the top five major LNG importing countries/regions in 2022 are the European Union, Japan, China, South Korea and India, accounting for 30%, 19%, 16%, 12% and 5% respectively; The top five major exporting countries are Australia, Qatar, the United States, Russia and Malaysia, accounting for 21%, 20%, 19%, 8% and 7% respectively.

In 2022, China's natural gas imports have declined significantly, and the complementary role of pipeline gas is limited