Global gas demand is expected to grow this year by 2.5 percent, or 100 billion cubic meters, due to colder temperatures and easing prices, according to the International Energy Agency (IEA).
IEA stated in its latest Gas Market Report that the “strong growth” would be driven primarily by the industrial and power sectors in fast-growing economies in Asia, as well as gas-rich countries in Africa and the Middle East.
“Expected colder winter weather in 2024, compared with the unusually mild temperatures experienced in 2023, is likely to bring increasing demand for space heating in residential and commercial sectors,” IEA said.
Last year, natural gas prices saw a steep decline across all key markets.
In Asia, IEA observed a 60-percent decrease in prices as supply availability improved and demand softened. This was mainly due to the rapid expansion of renewables in the continent, it said.
Despite the projected demand growth, however, IEA warned that gas supply would again be tight in 2024 on the back of a “limited increase in global LNG (liquefied natural gas) output.”
Global supply seen up by 3.5%
According to IEA, LNG supplies are expected to grow this year by 3.5 percent—still well below the average 8-percent growth recorded in prepandemic years—as the development of new plants is projected to slow down.
“We expect to see solid growth in global gas demand this year as prices have come down to relatively manageable levels,” said Keisuke Sadamori, IEA director of energy markets and security.
“But the speed at which this new demand can be met will be critical, particularly as supplies are tight and substantial new LNG capacity will only come online after 2024,” he added.
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In the Philippines, the government is strongly pushing for LNG use and development, saying that it is a crucial transition fuel that would allow a more efficient and viable shift toward renewables.
The Energy Regulatory Commission had said that importing LNG could pull up prices even as overall supply is expected to increase due to the entry of new renewable energy technologies.
Transition fuel
Gas-fired power plants in Batangas province currently supply a fifth of the country’s electricity needs.
As gas is also a fossil fuel that increases greenhouse gas emissions, IEA recognized the need for more investments toward emission reduction across the value chain.
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It noted that cutting emissions would require around $600 billion in investments until 2030, backed by strong government policies and international cooperation.
“International cooperation, together with public-private partnerships, will be critical to facilitating and fast-tracking the reduction of [greenhouse gas] emissions stemming from gas and LNG supply chains,” IEA said.
IEA highlighted that 5 percent of global energy-related greenhouse gas emissions came from natural gas-related operations.