Based on the latest report by the International Energy Agency, the United States is on track to beat Australia and Qatar as the world’s largest exporter of natural gas.
Gas demand is predicted to grow by 1.6% a year for the next five years, with consumption on track to hit nearly 4,000 billion cubic meters by the year 2020. Many expect that China will account for almost 40% of growth. In today’s statement, IEA Executive Director Fatih Birol said: “The U.S. shale revolution shows no sign of running out of steam and its effects are now amplified by a second revolution of rising LNG supplies.” Birol added, “Also, the rising number of LNG consuming countries, from 15 in 2005 to 39 this year, shows that LNG attracts many new customers, especially in the emerging world.”
Right now, the United States is the world’s largest producer of natural gas. Therefore, the IEA has forecasted that by 2022 the country’s output will be 890 bcm, more than a fifth of global gas production. In an attempt to increase export demand, three key LNG terminals under construction on the Texan coast will double the number of U.S. ports that are currently in use.
Demand is Driven by the Industry
According to the IEA, future demand will be primarily driven by the industrial sector. Why? Because its conventional use in power generation is cut by a growing mix of coal and renewables.
The report noted that increased liquefaction capacity is entering into a market that is already well supplied, and the oversupply is driving down prices to interest new countries like Thailand, Pakistan, and Jordan. However, it warned that disruption to traditional routes of energy highlights the current diplomatic crisis involving Saudi Arabia and Qatar. “Even in a well-supplied market, recent events remind us that gas security remains a critical issue.”
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