There are indications that strong demand growth from China, greater industrial demand, and rising supplies from the United States, will transform global natural gas markets over the next five years, the International Energy Agency stated in its latest market forecast.
Global gas demand will grow at an average rate of 1.6 per cent a year, reaching just over 4,100 billion cubic meters (bcm) in 2023, up from 3,740 bcm in 2017, according to the IEA’s latest annual gas market report titled: Gas 2018.
“In the next five years, global gas markets are being re-shaped by three major structural shifts,” said Dr Fatih Birol, IEA’s executive director.
“China is set to become the world’s largest gas importer within two-to-three years, US production and exports will rise dramatically and industry is replacing power generation as the leading growth sector. While gas has a bright future, the industry faces tough challenges. These include the need for gas prices to remain affordable relative to other fuels in emerging markets and for industry to curb methane leaks along the value chain.” Chinese gas demand is forecast to grow by 60 per cent between 2017-2023; underpinned[L1] by policies aimed at reducing local air pollution by switching from coal to gas. China alone accounts for 37 per cent of the growth in global demand in the next five years and becomes the largest natural gas importer by 2019, overtaking Japan. The IEA also forecasts strong growth in gas use in other parts of Asia, including South and Southeast Asia, driven by strong economic growth and efforts to improve air quality. For end-use sectors, industry will become the largest contributor to the increase in global gas demand to 2023, taking the lead from power generation, which had historically held this role. The change is especially marked in Asia and other emerging markets thanks to higher gas use in industrial processes and as feedstock for chemicals and fertilisers.
Overall, industry accounts for over 40 per cent of growth in global gas demand to 2023, followed by 26 per cent for power generation. Major changes are also evident on the supply side, with the United States leading gas production growth worldwide to 2023.