Global gas demand to rise by 2.5% in 2024, says IEA

RIYADH: Global gas demand is expected to rise by more than 100 billion cubic meters or 2.5 percent this year, driven by continued expansion in fast-growing Asian markets, according to an analysis. 

In its latest report, the International Energy Agency said that combined gas needs for the Middle East region and Africa will rise 3 percent annually by 2024. 

According to the analysis, global demand for gas rose by 3 percent in the first half of this year compared to the same period of the previous year.

This increased growth was well above the historical 2 percent average expansion rate between 2010 and 2020. 

Natural gas is a significant source of energy for power generation, industrial processes, and heating. It is widely considered a cleaner-burning fuel than coal or oil as the world continues its energy transition journey. 

“Natural gas markets moved to more pronounced growth in the first half of 2024, with initial estimates indicating that global gas demand increased at a rate well above its historical average during this period,” said the IEA. 

“Demand growth is primarily supported by higher gas use in industry and is increasingly concentrated in Asia, where both China and India returned to double-digit growth rates in the first half of 2024,” the Paris-based think tank added. 

The energy agency revealed that Asia witnessed an estimated 8 percent year-on-year demand growth for natural gas in the first half of this year. In comparison, it grew by a marginal 2 percent in North America during the same period. 

Combined gas demand in Central and South America grew by 3 percent in the first half of 2024 compared to the same period in 2023. 

Asia also accounted for around 60 percent of the increase in global gas requests in the first half of the year, with demands in both China and India increasing by just over 10 percent year-on-year during the same period. 

Gas use in the industrial sector contributed to almost 65 percent of global demand growth, primarily supported by the economic expansion of fast-growing Asian markets. 

“Combined industrial gas consumption in China, Europe, India and the United States – accounting for around half of the global amount – increased by an impressive 6 percent or 20 bcm year-on-year,” said the IEA. 

Gas use in the power sector grew by a more moderate 2 percent year-on-year, as the strong gains in North America, fast-growing Asian markets, and Eurasia were partially offset by lower gas-fired power generation in Europe. 

Demand in the residential and commercial sectors grew by 1 percent year-on-year in the first six months of 2024 amid unseasonably warm temperatures in the first quarter. 

Meanwhile, global supply growth of liquefied natural gas only increased marginally by 2 percent in the first three months of this year, while it contracted by 0.5 percent in the second quarter. 

The IEA noted that a combination of feed gas supply issues and unexpected outages largely drove this decline in LNG production.

“Year-on-year growth in LNG supply is expected to accelerate during the second half of 2024, with new liquefaction capacity coming online,” the agency said. “The US is set to provide the lion’s share of new export capacity this year as existing plants expand and new plants start operating.”