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Gas demand to fully recover in 2021 from its drop in 2020

Oil&Gas Materials 5 July 2021 11:32 (UTC +04:00)
Gas demand to fully recover in 2021 from its drop in 2020

BAKU, Azerbaijan, July 5

By Leman Zeynalova – Trend:

Gas demand is expected to fully recover in 2021 from its drop in 2020, although the recovery remains modest compared to the rebound after the 2008-2009 crisis, Trend reports with reference to the International Energy Agency’s Gas Market Report Q3.

“Natural gas demand is expected to reach close to 4 300 bcm by 2024, adding 350 bcm or 9 percent compared to its 2020 low point. Short-term recovery plays a major role in the forecast period, with the demand gains expected in 2021 accounting for about 40% of the total increase. The global gas consumption growth rate stands at 3.6 percent in 2021, then declines progressively over the following years to 1.7 percent in 2024. Compared with 2019, natural gas increases by only 275 bcm over the forecast period – or about 7 percent,” reads the IEA report.

The agency believes that the industrial sector, which provides the largest contribution to the 2021 recovery in global gas demand, maintains a leading role in the following years.

“The growing demand for natural gas, both for industrial processes and as a feedstock, is expected to account for a dominant 40 percent share of the total increase in gas consumption over the 2020-2024 period. The Asia Pacific region alone is responsible for almost half of total gas demand growth, with a 47 percent share of the global increase. The Middle East, the second-largest contributor to growth, stands far behind at less than 20 percent. For most other regions, and especially mature markets, the bulk of the increase comes in the initial years as demand recovers from the 2020 downturn. From 2020 to 2024, the substitution of gas and efficiency gains reduce natural gas demand by 80 bcm, mostly in power generation, moderating a gross demand increase of 430 bcm to a net increase of 350 bcm.

The return to economic growth – driven by the industrial sector and led by Asia’s fast-growing markets – remains the principal driver of rising gas consumption, accounting for almost two-thirds of the gross demand increase to 2024. Fuel substitution in favour of gas and at the expense of coal and oil, principally (but not only) in the power generation sector, covers the remaining third. In spite of relatively modest demand growth in the coming years, projected gas demand in 2024 is already about 2 percent above the 2025 level of the World Energy Outlook 2020 Sustainable Development Scenario. This scenario maps out a trajectory consistent with global net-zero emissions by 2070.”

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Follow the author on Twitter: @Lyaman_Zeyn

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