Natural Gas Statistics - Page 4

Recent trends in world natural gas demand

The year 2017 still highlights the strong competition between natural gas, coal and renewable energies. While the global economic recovery has strengthened, it is estimated that growth in global gas consumption accelerated to 3% in the first three quarters of 2017, compared to the same period last year. But, at the same time, global consumption of coal would have increased at a similar pace, driven by Asian countries. In China, coal consumption increased significantly in 2017 after three years of decline. This increase is linked to an acceleration in electricity demand.

Many factors contributed to the strong expansion of global gas demand in 2017. As in 2016, Europe and China were the fastest growing gas markets. For the third year in a row, European gas consumption recorded strong growth in 2017, provisionally estimated at 5%, after a steady decline over the period 2010-2014. Many factors were at play: coal-to-gas switching in power generation as gas competitiveness versus coal improved; the replacement of some coal-fired power plants: a steady trend in the heating sector; the gradual economic recovery; a reduction in hydropower; French nuclear problems and a greater use of gas in transport. At the international level, it is China that has seen the largest increase, in absolute terms, in its gas demand. Cedigaz preliminary estimates show a record growth of 18% (+ 35 Bcm) in 2017, double the average growth rate observed over the period 2010-2016.

The latest statistics of the International Gas Association CEDIGAZ indicate that natural gas has pursued steady expansion. CEDIGAZ Survey Natural Gas in the World 2017 confirms the first estimates published early May, showing a 1.6% growth in global gas consumption in 2016, which is in line with the past five-year average. In recent years, the role of natural gas in the energy mix has slightly progressed, against the background of falling coal consumption and rising renewable energy production. Natural gas is expected to pursue similar growth trend in the short and medium term in the context of the energy transition towards an increasingly renewable-based, efficient and sustainable energy system.

Natural gas consumption grew 1.6% to 3528 bcm in 2016, according to CEDIGAZ, driven by multiple structural and temporary factors. This positive growth is similar to the previous year’s and also in line with Cedigaz short and medium-term natural gas demand forecasts.

These recent developments in natural gas demand illustrate the influence of mixed drivers. More affordable natural gas prices in 2016 have given a boost to natural gas and LNG demand in both industrialized (Europe) and emerging markets. In addition, colder than usual temperatures in the final months of 2016 in the main consuming markets had a strong upward effect on domestic gas sales. Reversely, moderate global economic activity, the decline in energy intensity, weak electricity demand in OECD markets and the strong expansion of renewables are still weakening gas demand growth. If we set climate effects aside, it can be noted that the expansion of natural gas demand has remained below the historical average. In the first three quarters of 2016, it increased at an estimated rate of only 0.5%, relative to the same period of the previous year.