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 according to the International Energy Agency’s latest market forecast.
Global gas demand will grow at an average rate of 1.6% a year, reaching just over 4100 billion cubic meters (bcm) in 2023, up from 3740 bcm in 2017, according to the IEA’s latest annual gas market report, Gas 2018.
“In the next five years, global gas markets are being re-shaped by three major structural shifts,” said Dr. Fatih Birol, the 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 strongly 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% between 2017-2023, underpinned by policies aimed at reducing local air pollution by switching from coal to gas, according to the report. China alone accounts for 37% 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 in South and Southeast Asia, driven by strong economic growth and efforts to improve air quality.