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French gas and LNG association Cedigaz issues report on sector

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LNG Journal editor

The US and China were the two main centres of the growth in natural gas, though the demand expansion in these two markets slowed down compared with the previous years in a context of weakening economic growth, according to a new report from France on LNG and pipeline gas.

While the US and China accounted for 31 percent and 27 percent respectively of the global increase slower economic growth last year and Chinese policy changes and a milder inter added to the oversupply and lower prices.

Grouping

The report from Cedigaz, an international association created in 1961 by a group of international gas companies and the French Institute of Petroleum, said the main factor behind growth was the switching from coal and oil to natural gas in the power and industry sectors.

“This was prompted by the competitiveness of natural gas thanks to a growing abundant low-cost supply. This was notably the case in the US and Europe,” said the Cedigaz report. “Thus, natural gas has remained the main beneficiary of the energy demand growth to the detriment of coal in particular, causing its share in the energy mix to expand further,” it added.

Global natural gas consumption reached 3,948 Billion cubic metres last year, an increase of 2.3 percent from the previous 12 months when the US and China also led the market.

“However, the expansion of natural gas demand in these two markets slowed down compared to the previous years in a context of weakening economic growth,” stated Cedigaz.

“This slowdown also resulted from weather factors as well as the relaxation of Chinese policy on coal-to-gas switching,” it added.

Cedigaz data showed demand was also strong in the European Union (up 2.4 percent), Asia-Oceania (Australia, India), North Africa (Algeria), the Middle East (Iran) and OECD Americas (Canada, Chile).

That’s as natural gas demand declined in the Russia and Ukraine, mainly as a result of a mild winter.

“The growth in natural gas demand slowed from 5 percent in 2018 to 2.3 percent in 2019, returning to the average annual growth rate observed since the start of the century,” said Cedigaz.

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