After another record year, global demand for natural gas is set to keep growing over the next five years due to strong consumption in fast-growing Asian economies, the International Energy Agency (IEA) said in its Gas 2019 report.
The IEA said in its Gas 2019 annual market report that natural gas demand grew 4.6 percent in 2018, fastest rise since 2010.
Gas also accounted for almost half the increase in primary energy consumption worldwide. Demand is expected to rise by more than 10 percent over the next five years, reaching more than 4.3 tcm in 2024.
Fatih Birol, IEA’s executive director, said: “Natural gas helped to reduce air pollution and limit the rise in energy-related CO2 emissions by displacing coal and oil in power generation, heating and industrial uses. But it faces its challenges, including remaining price competitive in emerging markets and reducing methane emissions along the natural gas supply chain.”
IEA’s report further stated that China was expected to account for more than 40% of global gas demand growth to 2024, propelled by the government’s goal of improving air quality by shifting away from coal.
The country’s natural gas consumption grew 18 percent in 2018 but is expected to slow to an average annual rate of 8% to 2024 as a result of slower economic growth.
The IEA also saw strong growth in gas consumption in other Asian countries like Bangladesh, India, and Pakistan where the industrial sector is the main contributor to growth.
Industrial use of natural gas, both as a fuel and a feedstock, is set to expand at an average annual rate of 3 percent and account for almost half of the rise in global consumption to 2024. Power generation remains the largest consumer of natural gas, in spite of slower growth due to strong competition from renewables and coal.
IEA said that the strong growth in LNG export capacity would enable international trade to play a growing role in the development of natural gas markets as they move towards greater globalization.
Investments in LNG projects rebounded in 2018 after several years of decline, and a large number of projects due to take final investment decisions in 2019 are likely to further support trade and market expansion. However, the Agency believes that more investments will be needed in the future.