IEA has recently published its Medium Term Gas Market Report 2014 in which they state that natural gas boom is expanding to China from North America. China’s demand for gas will also get doubled through 2019, from current 168 billion cubic meters to 315 billion cubic meters in 2019.
The IEA report also sees global demand rising 2.2% per year by the end of the forecast period, compared with the 2.4% per year projected in last year’s outlook, till the end of this decade.
“The golden age of gas has arrived in China,” said IEA executive director Maria van der Hoeven as she presented the report at the Conference in Montreal. She further commented: “We are entering the age of more efficient natural gas markets, with additional benefits for energy security. While demand growth is driven by the Asia-Pacific region – and especially China – supply growth for the international gas trade is dominated in private investments in LNG in Australia and America”.
Despite the fact that Chinese production is set to grow by 65%, from 117 bcm in 2013 to 193 bcm in 2019, China will remain a significant importer. Half of its new gas demand will be met by domestic resources, most of them unconventional. The rest will be imported either by ship as super cooled gas or through pipelines. The power, industrial and transport sectors will drive overall Chinese gas demand to 315 bcm in 2019, an increase of 90% over the forecast period, the report said.
China needs to extend its infrastructure links, nationally and with Central Asia, and further out. China’s recent giant gas deal with Russia will also change the dynamics of the global energy market for LNG.
In China, where most of the electricity is produced using coal which pollutes the environment to a hazardous level, prompting the government to adopt tough plans to reduce pollution, and gas therefore is emerging as a major part of the solution. China will lead the growth of the global gas demand over the next five years and this will turn it into a key battleground for gas exporting countries including Canada and Australia.