Global demand for natural gas is expected to grow at an average of 1.6 percent annually within the next five years, with rising Asian markets as the main engine for demand, the International Energy Agency (IEA) said in its latest annual report for the world gas industry.
According to the report, the global gas demand will climb to around 4.1 trillion cubic meters (cu m) by 2023, with China accounting for 37 percent of the global consumption growth between 2017 and 2023.
The IEA said in the report that global consumption of natural gas would see an increase of 376 Bcm by 2023, as compared to the 358 Bcm growth over the past six years.
China will undoubtedly be the biggest driver for the growth of global gas market in the coming years due to its robust and continuous economic growth and strong policy support to improve air quality.
“China, whose market grew by an astonishing 15% in 2017 with a strong coal-to-gas switching program in the residential and industrial sectors, is set to continue to lead the trend with an expected average annual growth rate of 8% for the next five years,” the energy agency said.
It also expected that China will become the world’s No.1 gas importer by 2019 and will import 171 Bcm of natural gas per year by 2023, as the country’s gas production is set to lag a little behind its consumption growth.
North America and the Middle East, although being major gas-producing regions will also see growing demand for industrial gas, in order to sustain the expansion of their petrochemical industry.
Notably, it was indicated in the report that the industry sector is set to replace power generation as the key driver of global gas market growth. “Emerging markets, primarily in Asia, account for the bulk of this increase with uses as a fuel for industrial processes as well as for feedstock for chemicals and fertilizers,” the IEA said.
US Leads Global Supply Growth
In terms of the supply side, the United States is set to account for the biggest share of global increase in natural gas supply, while also contributing largely to export growth.
“Additional US production accounts for almost 45% of the global growth,” the IEA said, adding that the increase in US output is mostly exported to outside markets.
As for other major producing regions such as the Middle East and China, most of their gas production rise is targeted for domestic markets in the short run.