Gas demand and supply are set to grow at a sustained rate in the next five years, due largely to demand growth from China and increasing production in the United States, the International Energy Agency (IEA) said in a report on Tuesday.
The IEA, which regroups leading consumer nations in the industrialised world, said in its latest five-year forecast that gas has a “bright future” on the energy scene but could face affordable pricing challenges and the need to master technical problems like methane leaks.
“Deep transformations are underway in natural gas markets – China is entering the global gas scene, driven by continuous economic growth and strong policy support to curb air pollution,” the report noted.
Added to this, “the United States is emerging as a global LNG player (and) the industry sector is set to take over from power as the key driver for natural gas demand,” it said.
Thus global gas demand is expected to expand by an average 1.6 percent annually, rising to just over 4.1 trillion cubic meters (tcm) in 2023, compared with 3.74 tcm in 2017, the IEA indicated.
Chinese gas demand is forecast to grow 60 percent between 2017-2023, spurred on by environmental issues, industry demand and pollution reduction policies. Chinese gas demand growth will account for 37 percent of all demand growth in the five-year period under study, and China will overtake Japan as the largest gas importer, globally.
Moreover, other parts of Asia are also set to increase their use of gas as a switch from power-generation usage to industrial use is taking place.
Industry needs will account for 40 percent of demand growth for gas in the period up until 2023, while power-generation will account for only 26 percent of demand growth in the like period.
The Paris-based IEA also remarked on “major changes” on the supply side of the gas market, as the US is to emerge as the leading gas producer in 2023, due to the sharp focus on and increase in shale gas production.
The US is also gearing up to serve export markets with both LNG and pipelines, adding flexibility to the supply chain, the gas report said.
The IEA also forecasts a growing share of the market for LNG, which now accounts for about 34 percent of supply, but will rise to 40 percent within five years.
Source: Kuwait News Agency