IEA says near-term natural gas export growth to be fueled by US, Australia and Russia
The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows.
During a presentation at Gastech in Spain on Wednesday, IEA senior natural gas analyst Jean-Baptiste Dubreuil said other countries contributing to the exports growth during that period will be Australia and Russia.
Australia is a major LNG exporter, while Russia supplies significant amounts of pipeline gas to Europe. Besides its growing LNG exports efforts, the US is also a major exporter of pipeline gas to Mexico, which is heavily reliant on the supplies for power generation.
“We do anticipate natural gas will have a positive contribution to the energy mix and, therefore, the volumes for natural gas consumption are expected to rise in all our long-term scenarios, even in the most restrictive with GHG emissions,” Dubreuil said.
The conference, in its third day at Fira Barcelona Gran Via, has provided an opportunity for leaders and emerging players in the natural gas and LNG sectors to put their best foot forward, in an effort to gain new customers and remain relevant in the market conversation. China’s decision Tuesday to impose a 10% tariff on imports of US LNG starting September 24 rattled the conference, but exhibitors were looking to move beyond the noise with an eye toward the future.
IEA forecasts natural gas growth to persist in the medium and long term, driven by China entering the global gas scene as a major importer, and thus a major source of consumption growth, Dubreuil said. Other drivers include LNG development and the shift in consumption from demand growth fueled by power generation to demand growth fueled by industry, especially in emerging markets.
“In the near future, we do expect that emerging Asia will be the main driver for natural gas demand growth,” Dubreuil said. “We also expect some growth from other regions, resource rich regions such as the Middle East but also North America, not just for domestic uses but also for exports.This growth will be met with additional production.”
While largely positive about the outlook for gas, Dubreuil said challenges remain, besides the recent trade tensions between the US and China.
Access to energy in some parts of the world, such as sub-Saharan Africa, continues to be limited, while market participants also focus increasingly on prices.
Dubreuil said natural gas must “remain competitive” on prices but also “prove its contribution to a cleaner, more sustainable energy environment.”