LIQUEFIED NATURAL GAS MARKET ANALYSIS

Liquefied Natural Gas Market Size and Trends

The liquefied natural gas market is estimated to be valued at USD 142.17 Bn in 2024 and is expected to reach USD 261.57 Bn by 2031, growing at a compound annual growth rate (CAGR) of 9.1% from 2024 to 2031.

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The liquefied natural gas market is witnessing positive trends over the past few years. There has been substantial investment in the LNG infrastructure like pipelines, shipping, and receiving terminals to facilitate the increasing import and export of LNG across regions. Many countries are switching to natural gas and LNG to reduce carbon emissions, improve energy security by diversifying supply sources, and meet growing long-term energy demand. Several nations have announced goals to expand their LNG terminals and import capacities to capitalize on affordable and relatively cleaner LNG. The market is also getting conducive government policies and initiatives focusing on developing domestic gas distribution networks. These factors have been driving the liquefied natural gas market growth.

Rising Demand for Clean Energy

Liquefied Natural Gas or LNG being a cleaner alternative to coal and oil has led to a surge in demand globally. Many large energy importing countries have been switching to natural gas to fuel their power plants and other industrial needs as it emits significantly less CO2 and other pollutants compared to other fossil fuels. Countries like China, India and several nations in Southeast Asia have been on the forefront to replace aging coal fired plants with gas based generation to curb air pollution in their major cities. The floating and land based LNG receiving terminals built by countries like Japan, South Korea provide easy access to imported gas. Transition to gas based economy helps nations to comply with their climate commitments under Paris agreement. Many gas exporters too have been successful in promoting LNG as a bridging fuel in transition to renewables. Long term gas sale agreements are signed to ensure supply security and price stability. Investments are made in liquefaction facilities, pipelines and carriers to help monetize newly discovered gas reserves and expand market share. As coal is gradually phased out, role of natural gas becomes more important especially in countries which lack domestic oil and gas reserves. The rising preference for LNG as a preferred fuel supports steady growth in global liquefaction capacity and trade volumes in the coming years. Growing consumption of clean energy is expected to drive the market growth. For instance, according to data by the Center for Climate and Energy Solution, in 2023, about 11.2 percent of the energy was consumed globally for heating, power, and transportation.

Another key driver for the LNG market expansion is the increasing focus on the usage of natural gas as a transport fuel. Both compressed natural gas (CNG) as well as liquefied natural gas (LNG) are disrupting the traditional diesel and gasoline markets. Commercial vehicles especially heavy duty trucks and buses are rapidly shifting to CNG/LNG mainly in countries where gas grid is already developed. Adoption accelerated due to significant economic benefits from lower fuel costs and clean mobility. Countries like Pakistan, Iran, Argentina, Brazil and India now have sizeable CNG vehicles on road. For long haul trucks and marine vessels, LNG provides distinct advantages over conventional fuels due to its higher energy density and storage at ambient temperatures compared to compressed gas. Leading marines companies are investing in LNG fueled ships and bunkering facilities to reduce emissions. Major global truck manufacturers too launched dedicated models which can run on LNG. The US interstate trucks are shifting to LNG in big numbers to meet tightening emissions regulations.