Global gas demand to fall – IEA
Global natural gas use will rise at a slower pace than previously forecast.
That’s according to the International Energy Agency (IEA), which said demand will rise by 2% every year in the next six years until 2020 – in comparison to 2.3% estimated last year.
According to its latest Medium-Term Gas Market Report, a “significant” reason for the fall is weaker gas demand in Asia where persistently high gas prices – until very recently – led to consumers switching to other options.
A few Asian nations have decided to move ahead with plans to expand coal-fired power generation instead of gas.
IEA Executive Director Maria van der Hoeven said: “One of the key – and largely unexpected – developments of 2014 was weak Asian demand. Indeed, the belief that Asia will take whatever quantity of gas at whatever price is no longer a given.
“The experience of the past two years has opened the gas industry’s eyes to a harsh reality: in a world of very cheap coal and falling costs for renewables, it was difficult for gas to compete.”
In the short term, gas demand is expected to benefit from plunging prices but the long term outlook “has become more uncertain, especially in Asia”, the report states.
Gas markets will also have to cope with “a flood of new LNG supplies” as the report projects global LNG export capacity to rise by more than 40% by 2020, with 90% of the additions coming from Australia and the US.
Europe’s LNG imports are expected to double by the end of the decade.