The International Energy Agency has released a new report that predicts China will more than double its current demand for natural gas over the next five years, while the world will experience a 2.7 per cent growth in demand per year.

 

The Medium-Term Gas Market Report 2012 found that China will become the third-largest gas importer behind Europe and Asia Oceania. The report also predicts that North America will become a net LNG exporter over the next five years, while the formation of Japan’s new nuclear policy will inform its import demand.

 

“The Golden Age of Gas has dawned in North America, but its continued expansion worldwide depends on producing gas and bringing it to the market in a way that is friendly to investors and society as a whole,” IEA Executive Director Maria van der Hoeven said.

 

“As gas competes against other energy sources in all market segments, notably in the power sector, pricing conditions are a key element to keep it competitive everywhere. This medium-term report aims to facilitate investor decisions by providing a timely, in-depth analysis of the current trends and what we expect to take place over the coming five years.”

 

Other key findings of the report include:

  • A quarter of new gas demand will come from China, another quarter from the Middle East and other Asian countries together, and a fifth from North America.
  • Low gas prices will result in gas generating almost as much electricity as coal in the United States by 2017.
  • Global gas trade will expand by 35%, driven by LNG and pipeline gas exports from the FSU region; most of this expansion occurs from 2015 onwards, following a period of further tightening of global gas markets.
  • Natural gas is the most important commodity with no global market price yet. Divergence among regional gas prices will decline but remain a feature of global gas markets. The emergence of a spot price in Asia would aid regional producers and buyers.

 

The report can be purchased from the IEA here