The International Energy Agency (IEA) said that worldwide natural gas demand would decrease by 150 Bcm (4%) to 3,850 Bcm in 2020. The recovery is expected to be slow starting in 2021, led by consumption of liquefied natural gas (LNG). However, the recovery will likely depend on China and India policies, according to Clyde Russell, a commodity and energy columnist at Reuters.
There is a question whether China and India will stick with their transition toward natural gas or backslide and favour coal. China is expected to dethrone Japan as the world’s top LNG buyer in 2025. This forecast assumes that China will move forward with its coal-to-gas switching policies, but the future of the policy remains uncertain. China has recently approved the construction of new coal-fired power plants as part of efforts to support the virus-hit economy.
IEA expects India’s LNG demand to increase by 28 bcm annually over the period of 2019 to 2025. India has a target to increase natural gas share in its energy mix from 6% to 15% over the period. The country is also developing various LNG-related infrastructure to meet the target. India’s industrial sector is expected to drive gas demand increase, although the residential and transport sectors will also contribute to the growth.
