China a big unknown factor in global LNG demand growth
(Bloomberg; June 5) - Global natural gas consumption may rise 17 percent by 2017 from last year as demand surges in Asia and the U.S., according to the International Energy Agency. That's an average increase of 2.7 percent a year, similar to the growth rate during the past decade, the June 5 report said. Emerging nations will account for 69 percent of the gain.
"Asia will be by far the fastest growing region, driven primarily by China," the IEA said. China's annual consumption will rise to an estimated 9.6 tcf in 2017 from 4.6 tcf in 2011, with domestic production to cover about two-thirds of that. But the increase of 13 percent a year is less than the 20 percent a year over the past three years. The rate of growth depends on construction of infrastructure to handle imports, distribution and storage, and local prices need to be high enough to attract costly imported supplies.
Imports into China are expected to rise to 3 tcf, with slightly more than half coming as LNG and the rest by pipeline from Central Asia and Myanmar. Russian piped supplies to China remain an uncertainty, according to the IEA. While deliveries aren't expected before 2017, Russian imports will make up a significant part of Chinese purchases in the longer term unless China ramps up production of shale gas rapidly. "The question for suppliers is how much pipeline gas and LNG China will need in five or 10 years."