China set for 'Golden Age' of natural gas10 june 2014, 21:40
Demand for natural gas is set to nearly double within five years in China but the emerging market giant will meet half that with domestic supplies, AFP reports according to the International Energy Agency.
In its latest medium-term forecasts for the natural gas sector, the IEA trimmed its five-year outlook for consumption by 0.2 points to an annual increase of 2.2 percent as European countries step up use of renewable energy.
However, it said demand for cleaner-burning natural gas was likely to grow in China as air quality concerns prompted authorities to take measures to reduce 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 metres) in 2013 to 193 bcm in 2019," said the IEA.
The IEA was somewhat cautious about the outlook overall for natural gas given efforts to switch to renewables, high prices for liquefied natural gas (LNG) 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 increased Asian demand for gas is expected to be met mostly by LNG supplies, which the IEA forecasts to increase by 450 percent to reach 450 bcm in 2019.
The IEA expects half of all new LNG exports will come from Australia and North America to account for 8 percent of global LNG trade by 2019.