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June 11, 2014

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China’s need for natural gas may double in 5 years

DEMAND for natural gas may nearly double within five years in China but the country will meet half that with domestic supplies, the International Energy Agency said yesterday.

In its latest medium-term forecasts for the natural gas sector, the IEA cut its five-year outlook for consumption by 0.2 points to an annual rise of 2.2 percent as European countries step up use of renewable energy.

But it said demand for cleaner-burning natural gas was likely to grow in China as air quality woes prompted authorities to take measures to cut pollution.

“Driven by booming demand, the ‘Golden Age’ of natural gas that is now firmly established in North America will expand to China over the next five years,” said the IEA.

“The power, industrial and transport sectors will drive overall Chinese gas demand to 315 billion cubic meters in 2019, an increase of 90 percent over the forecast period.”

The energy analysis arm of the OECD group of advanced countries said China was also set to benefit from a boom in gas production.

“While China will remain a significant importer, half of its new gas demand will be met by domestic resources, most of them unconventional: Chinese production is set to grow by 65 percent, from 117 bcm (billion cubic meters) in 2013 to 193 bcm in 2019,” said the IEA.

It was cautious about the outlook for natural gas given efforts to switch to renewables, high prices for liquefied natural gas supplies, and competition from other fuels such as coal.

“High LNG prices are threatening to crimp demand as many countries are increasingly unwilling, or unable, to afford these supplies — and that could open the door to coal,” IEA Executive Director Maria van der Hoeven said in a statement.

That is of major concern as higher Asian demand for gas may be met mostly by LNG supplies, which the IEA sees to rise by 450 percent to 450 bcm in 2019.


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