Gas is the only fossil fuel expected to continuously rise in demand through to 2035, according to a new report.
McKinsey Energy Insights’ ‘Global Gas and LNG Outlook to 2035’ report revealed that, in 2018, China emerged as the world’s biggest importer of gas and LNG, overtaking Japan, and second biggest importer of LNG, overtaking South Korea.
The consultancy said that it expected demand to continue rising in the region, with China, ASEAN, and South Asia to account for 95% of global LNG demand growth until at least 2035. Total gas demand is set to rise by 0.9% per annum, while Asian gas demand is set to rise by 2.1% per annum during the same period, driven primarily by power and gas-intensive industries.
On the supply side, more than half of the global growth of 635 bill cu m by 2035 will be driven by the US - adding 380 bill cu m - followed by Russia (+110 bill), and Africa (+110 bill cu m). Elsewhere, Europe and the Rest of Asia’s gas supply is forecast to decline rapidly.
“We’ll look back at this as a milestone year, when China became the world’s biggest LNG importer and we saw the highest volume of liquefaction projects taking FID. In many ways, that sets the tone through to 2035: Asian economies in the ascendancy—led by China—with growing energy demand; the US continuing to rank highly for both supply and demand; but on the supply side Europe and Asia’s second-tier economies falling away. Overall though, this is a growth story for gas and LNG,” said Rahul Gupta, McKinsey Energy Insights’ associate partner.
“In the last 12 months, a record volume of LNG projects took FID (over 60 mill tonnes per annum, or 20% of today’s market), pushing the LNG supply/demand balance into the late 2020s. Looking ahead, only one in 10 proposed LNG projects will take FID, with over 100 LNG projects totaling 1,100 mill tonnes per annum of capacity competing to fill the 125 mill tonnes supply gap by 2035,” added Dumitru Dediu, McKinsey Energy Insights’ Partner.
‘ Global Gas and LNG Outlook to 2035’ covers the global gas demand outlook, supply outlook and changes in cross-border capacity
