Namely, demand for natural gas increased 4.6% in 2018, which is its fastest annual pace since 2010. Gas accounted for about half the increase in primary energy consumption globally. Demand is also expected to increase by over 10% over the next five years, achieving more than 4.3 trillion cubic metres (tcm) in 2024.
Commenting on these findings, Dr Fatih Birol, the IEA’s Executive Director, said that:
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. Natural gas can contribute to a cleaner global energy system. But it faces its own challenges, including remaining price competitive in emerging markets and reducing methane emissions along the natural gas supply chain
According to IEA, China is expected to account for more than 40% of global gas demand growth to 2024, driven by the government’s target of improving air quality by limiting the use of coal. Chinese natural gas consumption grew 18% 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 expects significant rise in gas consumption in other Asian countries, especially in South Asia. In Bangladesh, India and Pakistan, the industrial sector is contributing greatly to growth, specifically for fertilisers to meet the needs of growing populations.
Industrial use of natural gas, both as a fuel and a feedstock, will also expand at an average annual rate of 3% and account for almost half of the increase in global consumption to 2024. Power generation is still the largest consumer of natural gas, despite slower growth because of strong competition from renewables and coal.
Gas 2019 also sheds light on the role of LNG at sea, which will be a fast-growing alternative fuel due to stricter rules on sulphur content that will apply in January 2020.
Specifically, supplies to meet growing global demand for natural gas will come from both new domestic production in growing economies but also from major exporting countries, led by the development of abundant shale gas resources in the US.
What is more, the strong growth in LNG export capacity will facilitate international trade to play a growing role in developing natural gas markets.
In addition, investment in LNG projects have rebounded in 2018 after numerous years of decline, and the large number of projects that will take final investment decision in 2019 is likely to further drive trade and market expansion. Nevertheless, more investment will be necessary.