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Global LNG demand could fall 4.2 percent in 2020 in a multi-wave pandemic scenario before recovering in 2021. The market is expected to begin re-balancing as producers curb supply and the pandemic delays commissioning of new LNG projects.
The Global Gas Report 2020 , published by the International Gas Union (IGU), research company BloombergNEF (BNEF) and Snam, the Italian-headquartered international gas infrastructure company, noted that global LNG imports reached 482 billion cubic meters in 2019, up 13 percent from 2018. The expected 4.2 percent fall, could rebound quickly to previous levels as soon as 2021, depending on the persistence and longevity of the pandemic.
The report re-affirmed that Qatar retained the top global LNG export spot in 2019. A long term LNG demand outlook shows Asia Pacific will be the main engine of natural gas demand growth to 2040, led by China and India. Economic growth, expansion of gas pipeline networks, construction of LNG regasification terminals, market reforms and environmental policies will all support gas demand across the region.
China will be the single largest growth market, led by its industrial sector. By 2040, China will make up 12 percent of global natural gas demand, only behind the US at 18 percent. LNG demand in Japan and South Korea will start to decline.
India’s growth is supported by pipeline buildouts, more LNG regasification terminals and implementation of policies restricting the use of polluting fuels in industries, such as furnace oil and petroleum coke. Gas consumption could reach 196 billion cubic meters in 2040, registering a 5.4 percent annual growth rate between 2018-40 – the highest seen across all countries and regions.
In emerging Asia, demand growth is propelled by the addition of new gas-fired power generation capacity. The industry sector will be the primary contributor to natural gas consumption growth in Pakistan, Bangladesh and Indonesia.
Natural gas demand in Eurasia will see modest annual growth of 0.5 percent over 2018 to 2040.
More demand also emerges from the Middle East’s large gas-producing markets, such as Saudi Arabia and Iran, as they increase their own domestic consumption with rising supply.
As a region, Africa will see the biggest growth potential in natural gas consumption with a 3.2 percent compound annual growth rate to 2040. The increase in consumption comes alongside new domestic gas production.
