Photo: ENN Group chief executive officer Zhang Yesheng
BEIJING, Apr. 1 (Xinhua) -- With rising supply, a global natural gas market is developing, as the rising LNG trade has broken geographic restrictions and optimized resource allocation, said Zhang Yesheng, chief executive officer of ENN Group, a leading private clean energy provider in China.
Zhang made the remark in an exclusive interview with Xinhua before the opening of the 19th International Conference & Exhibition on Liquefied Natural Gas (LNG2019). LNG2019 will open in Shanghai on April 2 and last to April 5. Zhang is a speaker at the plenary forum “Downstream LNG Infrastructure and Applications” to be held on April 4.
Natural gas plays bigger role in energy transformation
As a clean energy, natural gas will see continuous growth in consumption, as both developed and emerging economies are in urgent need to transform their energy structures and fight against pollutions, said Zhang.
It becomes an industry consensus that consumption of natural gas will register the fastest growth in all energy consumption by 2030 or even by 2040.
In developed economies, such as the United States, European countries and Japan, natural gas will be mainly used in power generation in order to reduce consumption of coal. Although these economies are pressing ahead renewable energy, such as solar and wind power, natural gas-fired power plants could work as peak-shaving projects for renewable energy, said Zhang.
In order to fight against pollution and promote the energy transformation, emerging economies are also having strong demand for natural gas, said Zhang. In China, the share of natural gas in primary energy consumption is about 8 percent, far lower than the ratio of about 24 percent for natural gas in global energy consumption. This indicated that natural gas consumption in emerging economies, such as China and India will have great growth potential, said Zhang.
Asia takes lead in LNG demand growth
Due to its flexible delivery mode and potential demand growth from transportation industry, the share of LNG in global natural gas trade will continue to rise in the future, said Zhang.
According to Zhang, the global LNG trade market is undergoing major changes. One of the changes is that spot trade is on the rise and more players are entering the market. More spot trade and market players have enhanced market liquidity in the global LNG market, said Zhang.
Except for the United States which has become a major LNG supplier in the global market, some emerging LNG suppliers, such as Mozambique, Papua New Guinea, Russia, and Canada, are also increasing their LNG supply on the global market.
According to estimates by IHS Markit, the global LNG supply will increase by about 35 million to 40 million tonnes in 2019 and it will maintain similar growth momentum in 2020. Investment in global LNG projects will also keep growing in the following two years.
In regard to LNG demand, northeast Asia, south Asia and southeast Asia will become the major drive force for the growth of global LNG demand, Zhang said.
China imported about 54 million tonnes of LNG in 2018, an increase of 41.1 percent from a year ago. The spot trade exceeded 18 million tonnes, accounting for 34 percent of China’s total LNG imports in the year.
Rising LNG trade paves way for global natural gas market
The fast development of LNG market has broken the geographic restrictions in global natural gas market, said Zhang.
In order to enhance market liquidity, Zhang said it’s important for all players in the market, such as LNG suppliers, traders, shipping companies, and downstream customers, to increase the flexibility of LNG trade, such as removing restrictions over delivery destinations, and establishing product swapping mechanism among buyers in order to meet emergency need.
In view of the strong demand from the Asian region, it’s important to foster a natural gas trade center in Asia, as its demand accounts for more than 70 percent of the global total, said Zhang.
Given the huge investment in the LNG industry, strengthening global cooperation in financing could also give a boost to the development of a global natural gas market, he added.
Speaking of the LNG 2019, Zhang said that the conference is expected to bridge the supply and demand among all players on Chinese domestic market and overseas market. Against the background of rising natural gas consumption and LNG imports in China, it would further inject impetus to this dynamic market.
This triennial event was first held in 1968. This year marks the first time the conference to be held in China, the world’s fastest growing LNG market. LNG 2019 is presented by the International Gas Union (IGU), Gas Technology Institute (GTI) and the International Institute of Refrigeration (IIR). The Shanghai conference, the largest LNG event ever held in China, is hosted by China LNG Association, China Gas Society, Chinese Association of Refrigeration and China Gas Association. An estimate of over 170 enterprises and 1,800 representatives from 53 countries and regions will attend the conference. (Contributed by Dong Shishan, Jiang Yujuan)
A single purchase
