On Monday, the International Energy Agency (IEA) adjusted its forecast on 2020 global gas demand up but still predicted the biggest fall in history on the back of the coronavirus pandemic.
Gas demand this year would likely fall by 3% year-on-year or 120 bcm to 3,886 bcm. The IEA’s previous prediction in June predicted a 4% of contraction or 150 bcm.
The adjustment was made as the global gas demand has been progressively recovering since June. The emerging markets are cited as the main driver of the recovery.
However, IEA director Fatih Birol still warned against returning to business as usual right away as there would be long-lasting repercussions from the crisis.
In the January-September period of 2020, liquefied natural gas (LNG) contracting activity had slumped from 2018’s record high of 95 bcm to only 35 bcm. In the January-July period, global LNG exports plunged by 17%.
Looking forward, the outlook for 2021 is clouded by the resurgence of coronavirus cases and the possibility of a prolonged pandemic.
Over the upcoming five years, one-third of active LNG contracts, or 190 bcm, are scheduled to expire but the global liquefaction capacity is estimated to jump by 20% on the back of the currently developed projects.
