Middle East To Drive Gas Growth, But Is It Sustainable?

With global LNG supplies on the rise, prices are set to remain depressed over the coming years supporting global gas demand growth from energy-hungry countries in Asia, and other growing demand centers such as the Middle East.

Yet, LNG does not solve deeper, structural pricing issues in the region. As one of the highlights of its 2015 World Energy Outlook (WEO), released last week, the International Energy Agency (IEA) said that, based on its central New Policies scenario, the growth in global gas demand should support a 50% increase in gas trade, mainly thanks to new LNG projects.

About 140mn tons of LNG liquefaction capacity is currently under construction, although pipeline trade will also grow when the Russia-to-China 38 bcm pipeline scheduled to start around 2018 materializes. (CONTINUED - 1310 WORDS)