After another record year, global demand for natural gas is set to keep growing over the next five years, driven by strong consumption in fast-growing Asian economies, according to a new report from the International Energy Agency (IEA).
Natural gas accounted for almost half the increase in primary energy consumption worldwide in 2018 with demand growing 4.6 percent, its fastest annual pace since 2010, the IEA says in Gas 2019.
Demand is expected to rise by more than 10 percent over the next five years, reaching more than 4.3 trillion cubic metres (tcm) in 2024.
“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,” IEA executive director Fatih Birol said in a statement.
“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.”
But despite having vast natural gas resources, Canada’s growth is “limited by the lack of export infrastructure,” the IEA said — at least within its five-year forecast period to 2024..
Development of the LNG Canada project will bring online some 14 million tonnes per annum of liquefaction capacity by 2025, it noted.
“Other potential LNG projects on the Canadian and U.S. west coast could offer additional export outlets in the medium term. However, these projects, if sanctioned, would begin commercial operations after 2024 and thus their impact on Canadian production would extend beyond the scope of this forecast.”
China is expected to account for more than 40 percent of global gas demand growth to 2024, propelled by the government’s goal of improving air quality by shifting away from coal, the IEA said. Chinese natural gas consumption grew 18 percent in 2018 but is expected to slow to an average annual rate of 8 percent to 2024 as a result of slower economic growth.
The strong growth in LNG export capacity will enable international trade to play a growing role in the development of natural gas markets as they move towards greater globalisation, the IEA said.
“Investment in LNG projects have rebounded in 2018 after several years of decline, and the large number of projects due to take final investment decision in 2019 is likely to further support trade and market expansion. However, more investment will be needed in the future.”