(Montel) Global gas demand is set to rise by 3.6% in 2021 amid economic recovery from the coronavirus pandemic, although growth will slow to an average of 1.7% over the ensuing three years, the International Energy Agency (IEA) said on Monday.
The strong short-term recovery was underpinned by the assumption of a prompt rollout of Covid-19 vaccination in mature economies, and continuous efforts to deploy vaccines and protect the most vulnerable in emerging economies, it said.
“However, levels of uncertainty remain high for the course of the global health recovery [and] the main short-term risk is the appearance and spread of new Covid-19 variants.”
While a repetition of last year’s hard lockdowns looked less likely, further waves of infection were possible, it added.
“Growth in 2021 mostly reflects economic recovery from the Covid-19 crisis, but it’s set to be driven in the following years in equal proportions by economic activity and by gas replacing other more polluting fuels,” the IEA said.
By 2024, demand is forecast to have risen almost 7% from 2019 levels, to 4,277bcm.
Consumers in the Asia-Pacific region would account for half of the demand growth until 2024, the IEA said, noting that demand would keep rising if governments did not implement strong policies to move the world onto a path towards net-zero emissions by mid-century.
Asia-Pacific demand by 2024 was seen at 1,024bcm, up 20% from pre-pandemic levels, with Chinese consumption rising 37% to 421bcm.
European demand would on the contrary ease marginally from 537bcm in 2019 to 530bcm.
On the supply side, the increased demand could be met by conventional assets, already approved or under development before the pandemic, mainly in Russia and the Middle East, the IEA said.
The IEA forecast global gas supply to rise 3.7% in 2021 to 4,105bcm, with output set to reach 4,328bcm by 2024 – a 6% increase from 2019.
“Supply is also likely to be supplemented by new investment in US shale gas production to support export capacity for LNG that is currently under development,” it said.
It noted LNG would ensure flexible and secure supplies, especially from the US, where the majority of additional global LNG capacity would be commissioned over the coming three years.
“Robust growth of the LNG carrier fleet will also make supplies more adjustable, with current order books representing a 25% increase in the vessel count in the next two to three years,” it said.
“Underground storage capacity, another pivotal source of flexibility, is set to increase by 7% over the forecast period.”