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The ‘Golden Age of Gas’ heralded by the International Energy Agency (IEA) a few years ago remains out of reach for a large part of the globe – perhaps with the exception of the US. In its latest medium term gas market outlook, the agency cut its global gas demand forecast to an annual growth rate of 2% on average between 2014 and 2020, lower than the 2.3% average rate projected for the previous 10 years. The IEA now expects global gas demand (and thus production) to hit 3,926 bcm/year by the latter date.
Lacklustre demand growth for gas is mostly due to weaker gas demand in Asia, where high prices (see graph p10) led consumers to consider other options in 2013 and 2014. Consumption in Asia will grow by 2% annually to 355 bcm by 2020, compared with last year’s estimate of 2.3% through 2019. LNG demand from Japan, the world’s largest LNG importing country, is set to taper off as nuclear plants are expected to come back online after the 2011 Fukushima accident. Meanwhile, EU countries and the US have experienced plummeting renewable energy costs, denting gas demand.
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