THE GLOBAL GAS MARKET IN 2018

Natural gas supply and demand grew at their fastest pace since 2010

 

According to CEDIGAZ report “The Global Gas Market – 2019 Edition”, 2018 has been a remarkable year for the global natural gas market.

Global natural gas demand surged 4.7% to 3850 bcm, driven by the US and China. The US was the standout performer, accounting for 45% of the global increase in both the consumption and supply of natural gas.

2018 marks the second year of strong growth of natural gas demand, after a 3.5 % rise in 2017. It also recorded the highest growth of gas demand since the post-crisis rebound of 2010.

This fast expansion was driven by the abundance of competitive gas supply, especially in the US and in Russia and by supportive energy and environmental policies, in some countries, particularly in China. Investment in transport infrastructure also contributed to bolster gas penetration in key markets.

China became the largest net importer of natural gas in the world before Japan. Chinese net imports jumped by 32% and accounted more than 80% of the global increase in net imports, once again highlighting the crucial role of China in absorbing global gas production.

Like in 2017, the expansion of natural gas demand was part of a substantial global growth in world energy demand, driven by a robust global economy and extreme weather conditions.

Strong gas demand growth in Asia contributed to a rise in market prices in key areas and prevented the formation of a global LNG bubble.

Global biomethane market: green gas goes global

CEDIGAZ launches new report and database

 

The biomethane sector is booming worldwide. There will soon be more than 1,000 biomethane production plants operating in thirty-four countries, up from 720 at year-end 2017. Long centered in Europe, the green gas sector is indisputably going global.

Since 2010, world biomethane production has increased exponentially, reaching three billion cubic meters in 2017. In Europe, biomethane use is spreading across the continent.  There are now nineteen European producing countries, whose output totalled nearly 2 bcm in 2017. The United States is now world leader for the use of biomethane as vehicle fuel, further to its production surge of 2014-2017 and driven by federal and state regulations. The fact that China and India have recently adopted biogas upgrading technology promises to be a game changer. Both countries have set ambitious biomethane production targets and figure as huge emerging markets. In Central and South America, Brazil is taking regulatory steps to exploit its huge potential.

Despite a flurry of projects and rising interest among governments and industry players worldwide, data on this sector are comparatively scarce and sources of information – national, regional or sectoral – are highly dispersed. To fill this void, CEDIGAZ, the International Centre on Natural Gas Information, is launching a new report and database focused on global biomethane markets and production plants. These are valuable tools for policy makers, energy companies, equipment providers or any entity or individual following this rapidly expanding market.

Quarterly report – Oil and natural gas prices

  • Brent: between $60 and $80/b in 2019 (2018: $71/b)

The oil price oscillated between $50 and $86/b in 2018, averaging $71/b (+31% compared to 2017). The volatility observed in 2018 was due in large part to uncertainty about supply and economic growth, but also to the U.S. sanctions against Iran. Initially announced as being extremely severe, the embargo was softened at the last minute by the American president when he realized the likely consequences of a rise in the price of oil products.

For 2019, the average Brent price is expected to be in the $60 to 80/b range. These expectations account for different scenarios for factors such as economic growth, the Iran embargo, OPEC’s management of supply and U.S. production.

  • NBP: €19-23/MWh in 2019 (€23.3/MWh; $8.1/MBtu in 2018)

Based on forward prices and expected oil prices, the average UK NBP price for 2019 could fall between €19 and 23/MWh ($6.5-7.8/MBtu) compared to €23,3/MWh ($8.1/MBtu) in 2018, representing a potential decrease of between 1 and 18%.