As for many industries, 2020 was a complicated year for the LNG market due to the Covid-19 health crisis.
2021 seems to be crucial for the recovery of the LNG market in France and around the world, and several projects are in preparation.
Since March 2020, the Covid-19 pandemic and the global industry slowdown have drastically reduced the demand for natural gas, and therefore for LNG. In addition, electricity consumption has dropped to such an extent that gas-fired back-up power plants are not necessary today. As a result, the supply of natural gas, especially LNG, is abundant in Europe, but demand is much lower. On top of this, the main LNG importing countries (Japan, China, and South Korea) no longer receive the usual shipments. Europe, having to store this surplus, has now reached the highest stock levels.
2021, a crucial year for the LNG industry’s recovery:
To revive the LNG market, consumption must be relaunched. To do so, several new applications are under development. The shipping industry plays a decisive role in this. Indeed, projects for LNG-powered ships are increasing, and major shipping groups are increasingly turning to LNG, such as CMA CGM, a world leader in marine transport. Several sea “giants”, such as CMA CGM Champs Elysées and CMA CGM Jacques Saadé, among the world’s largest container ships, now use this energy for their propulsion. LNG allows up to 20% reduction of CO2 as well as a considerable reduction of sulfur oxides, fine particles, and nitrogen oxides emissions.
New applications are also being developed. Keppel Data Centers, the operator of the main Data Centers in Asia and Europe, is planning to launch a floating LNG-powered Data Center in the coming years. This type of project has several advantages, such as saving land space and using sea water for cooling. This project goes even further with the intention of using the cold energy generated by the LNG regasification process to cool the Data Centers. Indeed, placed next to an LNG storage plant, a collaboration between Data Centers and LNG infrastructures would allow a much better energy efficiency. This would result to a potential greenhouse gas reduction of 550,000 tons per year.
This new generation of Data Centers and more efficient use of LNG seem to have convinced market players who are also investing in similar projects.
LNG use is developing in new industries such as Offshore & Marine, for ship power supply for example, and Infrastructure, such as LNG Data Center projects. Despite a more complicated year in 2020, the LNG industry is expected to continue to grow in the coming decades!
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