IEA sees slower global natural gas demand growth

Brussels, June 8: Growth in natural gas demand will slow to an average 1.5% a year globally through 2021, as stagnation in Europe and uncertainty about Chinese consumption offsets robust growth in India, the International Energy Agency (IEA) said on Wednesday.

After growth of 2.5% over the last six years, gas is facing competition from renewable energy and cheap coal, meaning the global gas market will remain over supplied.

In Europe, Russian gas exportmonopoly Gazpromw ill be challenged by the prospect of a glut of liquefied natural gas (LNG) as export capacity rises 45% by 2021, even as demand drops in key markets in Japan and Korea.

“Developments are pointing to a period of oversupply,” IEA head Fatih Birol said in the agency's annual medium term gas outlook. “The next five years will witness a reshaping of global gas trade.”

Growth will be led by India, at an average of 6% per year, while Chinese demand is likely to recover, spur red by a switch from coal to gas-fired power generation, the IEA said. However, new supplies are also limited as production shrink sin Europe and US gas production hovers around flat next year as lower gas prices cut into investment.

Longer term, the US sh ale industry is expect to help drive recovery in production to reach 100 billion cubic metres (bcm) by 2021, or onethird of the global supply rise over the period.

Growth will be led by India, at an average of 6% per year, the IEA said