2017 Gas Demand Hit New Peak: Cedigaz
Global gas demand rose by 3.3% year on year in 2017 to reach a new peak of 3,640bn m3 (128.5 trillion ft3), according to first estimates for last year from Paris-based research institute Cedigaz; in analysis published May 14, it said the growth rate was more than double the average 1.5%/yr growth of the five previous years.
Huge Chinese growth (up 15%, an increase of 30bn m3) was due to enhanced coal-to-gas switching, but it noted strong increases too in the Middle East and Africa of 4.8% and 6.7% respectively thanks to incremental gas-fired (CCGT) generation and improving infrastructure. Europe (including Turkey) also notched up 4.8% growth, as gas became competitive against coal and was used in existing CCGT units.
On the supply side, natural gas production grew by 3.7%, well above the 1.3%/yr average in 2012-16. Growth was above average in the former Soviet Union (+6.8%), Asia-Oceania (+4.1%) and Africa (+8.6%). Robust production additions were posted in Russia 50bn m3, Iran 17bn m3, Australia 13bn m3, China 11bn m3, while Egypt and Norway each produced 10bn m3 more.
In 2017, international gas trade (net of LNG re-exports) surged by 9.1% to a new record of 1204bn m3, with pipeline trade (+ 8.5%) and LNG flows (+ 10.5%) both increasing. China overtook the US to become the world’s third largest natural gas importer, after Germany and Japan.
Overall gas/LNG imports into Europe (+ 12%) and Asia (+ 10%) increased strongly. In Europe, most of the growth was due to new highs in 2017 in pipeline flows from Russia (+ 11%) and Norway (+ 11%).
Global LNG supply, up 10.5% to 382bn m3, was strongly driven by a ramp-up in Australian LNG. Chinese and other Asian demand, plus southern Europe, absorbed much of the incremental supply. But rather than a glut, Cedigaz said that 2017 was a relatively balanced year for the LNG market. Firmer international gas prices were underpinned by rising oil and coal prices.
Last month, global LNG imports in 2017 were reported to have increased by 9.9%, according to the annual report of the International Group of LNG Importers (GIIGNL).