Global gas consumption grew at fastest rate since recovery from financial crisis

refinery 109025 640Global gas consumption is estimated to have increased by 4.7 per cent to 3850 bcm, its fastest growth since 2010, when demand rebounded after the financial crisis, according to the International Information Centre on Natural Gas (Cedigaz)

The year 2018 marked the second consecutive year of strong growth in natural gas demand, driven by a combination of economic growth, rising energy demand, coal displacement, improved infrastructure and weather-related energy needs.

The US and China were the two main contributors to the increase in consumption.

US demand added 80 bcm, linking it to extremely cold winter and hot summer. China natural gas consumption rose by more than 17 per cent. Natural gas consumption was also well above-average in Russia and the Middle East.

Global production increased by 4.9 per cent to an all-time high of 3857 bcm. US gas production grew at 11.5 per cent, almost half of the global increase, followed by the Middle East and Russia, where gas production reached historic highs.

Europe was the only region that saw a substantial reduction in output of -5.2 per cent in 2018.

In line with growing production, international trade (net flows) has also experienced robust growth, up 3.7 per cent to 973 bcm, against the background of increased global LNG export capacity.

China has become the leading net importer of natural gas, ahead of Japan, absorbing more than 80 per cent of global import growth alone.

The expansion of international trade came mainly from net inter-regional flows (long-distance transportation to accommodate market needs in Europe and Asia), which jumped 11 per cent to almost 500 bcm.

In 2018, LNG trade continued its strong expansion wave, rising 8.7 per cent to 415 bcm, although at a slower pace than in 2017 (+ 10.5 per cent). In response to reduced European gas needs and also smaller exchanges between Canada and the US, the growth of international pipeline trade slowed sharply after two buoyant years. International pipeline trade (net flows) grew in 2018 at a modest rate of 0.3 per cent to 572 bcm.

Natural gas prices rebounded in major markets in 2018 due to strong growth in energy demand. The LNG market tightened in the first three quarters before loosening in the last quarter, when a surplus of LNG supply combined with lower than expected Asian LNG demand led to massive LNG inflows into Europe and falling prices.

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