Impact of COVID-19 on the Global Small-Scale LNG Market
COVID-19 has negatively affected the global economy as the operations of various sectors have come to a standstill. Some of the major industries using small-scale LNG are oil & gas, marine, automotive, manufacturing, and power generation. In the power generation sector, companies are dealing with several challenges due to a decline in demand for electricity post-COVID-19. Furthermore, industries such as construction and manufacturing have stopped operations completely, which has drastically impacted the small-scale LNG market globally. Small-scale LNG is altogether the LNG transportation from liquefaction terminal to regasification terminals through tankers, ships, and trucks. LNG is a better alternative, which serves as a conscious step toward greener and cleaner fuel. It is mostly used as vehicular fuel and for generating power. Most companies in the small-scale LNG supply chain have stopped operations to ensure the safety of employees. However, some companies are operating at minimum capacity to support essential industries, such as power generation companies and manufacturing. Numerous utilities across the globe are dependent on small scale LNG for power generation. As the electricity demand has declined globally, the demand for new small-scale LNG has also declined.
Decline in Demand for Electricity in Major Economies Since the Lockdown
Furthermore, the revenue generation for numerous manufacturing companies across the globe has declined due to the reduced demand for manufactured goods. Manufacturing companies across the globe have shut down operations and are facing numerous difficulties in restarting business operations. Some of the common difficulties faced by manufacturing companies across the globe include disruptions in the supply chain, low revenue generation due to low sales, inability to operate at 100% due to social distancing norms, and lack of human resources. The decline in demand for manufactured goods and electricity has directly impacted the demand for small-scale LNG. However, as economies are planning to resume business to increase revenue generation gradually, the demand for the small-scale LNG is expected to resume its average growth rate by early 2021.
Source: Primary Experts, Secondary Sources, and MRFR Analysis