However, with the strong growth in industry, led by the fertiliser sector and followed by the textile and leather sector, the use of natural gas in the industrial sector is set to outpace the growth in gas demand for power generation and is expected to reach almost 30% of total natural gas demand by 2024. Although agriculture contributes less than 20% of the country’s GDP, the production of urea is the largest natural gas-consuming industry in the country. While the country currently depends on imported urea to meet its fertiliser needs, the government plans to improve the domestic fertiliser infrastructure to increase the country’s self-reliance. The textile industry, especially ready-made garments (RMG), is one of the fastest-growing industry sectors in the country. The RMG sector currently accounts for more than 80% of Bangladeshi export earnings in US dollar terms, and the government supports the industry by increasing the cash incentives for export to non-traditional markets, which are all the markets other than European Union and United States. The resulting natural gas demand for industrial uses is expected to reach around 24 bcm/y by 2024.

In order to cope with this domestic demand increase, Bangladesh is planning its first onshore LNG import terminal, on the Bay of Bengal 380 km from the country’s capital and largest city, Dhaka. The planned capacity is about 10 bcm/y and the project is currently in the process of inviting developers to bid on a build-own-operate basis for 20 years, with the aim of starting imports of LNG under long-term commitment from 2024–25. Until completion of the onshore terminal, as an interim solution the country plans to import LNG through FSRUs, which will be anchored at Moheshikahi Island in the Bay of Bengal and use underwater pipelines to deliver natural gas to the mainland of Bangladesh. The first FSRU received its inaugural LNG cargo from Qatar in the spring of 2018. After solving technical and weather-related problems, the country successfully imported gas in the summer of the same year, and continues to receive LNG cargoes from Qatar regularly, with further supplies sourced from Nigeria, Oman and Indonesia.

A second FSRU arrived in Bangladesh in late April 2019. This second FSRU is set to double the country’s importing ability to 10 bcm/y, with a current firm plan to build a 2 400 MW gas-fired power plant connected to the FSRU.

North America

Over the past decade North American gas demand has increased by 230 bcm/y, or an average 2.3% growth per year. Most of the increase occurred in the United States, where greater consumption for gas-fired power generation accounted for almost 65% of the increase in demand. In 2018 North American natural gas demand exceeded one trillion cubic metres for the first time in history.

This increase in consumption continues, and by end of the forecast period natural gas demand increases by another 59 bcm, or an average 1% per year (Figure 1.14). Consumption associated with power generation, new industrial projects and energy industry own use support this increase.

gas production from US shale. While ammonia production has been a key driver historically, the medium-term forecast shows that most industrial consumption growth will be due to additional methanol projects in Louisiana and Texas.

In 2018 US methanol exports increased by almost 60% (ICIS, 2019). The United States is projected to reach net exporter status in 2019, with the Asian market as the primary offtaker. OCI’s Natgasoline project in Beaumont, Texas, started up in June 2018, requiring 1.5 bcm/y in feedstock gas. Total additional gas consumption by new methanol projects over the forecast period is 5.8 bcm/y. This could increase, as Methanex has announced plans to nearly double the capacity of its 2 million tonne per annum (Mtpa) Geismar, Louisiana plant (The Advocate, 2018). The expansion would lead to another 2.4 bcm/y of natural gas consumption as feedstock if the project reaches final investment decision (FID) – due to be announced by mid-2019.

To the end of 2024, the energy sector’s own use of gas increases by an average 4.7% per year due to greater consumption from new gas liquefaction facilities and the lease and plant fuel needed to support record amounts of crude oil and natural gas production (Figure 1.17). Considering only liquefaction terminals that have achieved FID at the time of writing, LNG export capacity expansion adds consumption of about 7 bcm/y by 2024 (see Chapter 3 for more information on US LNG export projects and global LNG trade). As US crude oil production continues its dramatic ascent and reaches 19.56 mb/d by 2024 (from 15.48 mb/d in 2018 [IEA, 2019b]), the resulting natural gas needs in lease and plant fuel consumption are expected to grow by 16 bcm over the forecast period.

Figure 1.17. Energy industry own use consumption, United States, 2018–24

IEA, 2019. All rights reserved.

Natural gas consumption in the energy sector is driven by the strong growth in oil and gas production and the expansion of natural gas liquefaction capacity during the forecast period.

Canada

Canadian natural gas consumption growth has recently been driven by own use in the energy sector to support oil sands operations. This category accounts for about 30% of Canadian natural gas demand. A forecast of slower oil production growth over the next five years compared to last year (IEA, 2019b) tempers the pace of this growth trend (Figure 1.18).

Figure 1.18. Natural gas consumption by sector, Canada, 2004–24

Canadian natural gas consumption growth has mainly been driven by the development of oil sands, which is expected to decelerate in the near future due to infrastructure bottlenecks.

The pace of the increase in oil sands production has been too rapid for Canadian pipeline capacity to accommodate. With limited available rail capacity to meet the transport demand, the large discounts between Canadian volumes and US grades reached up to USD 50 per barrel in 2018 (IEA, 2019d). These heavy discounts incited government-mandated production cuts in Alberta, with enforcement planned throughout 2019 while participants build out further rail capacity. Permitting issues, legal challenges12 and construction delays challenge the build-out of the pipeline infrastructure necessary to support previously forecast levels of oil production in the country. Consumption growth in energy sector own use to the end of 2024 is therefore expected to average 1.5% per year during the forecast period (against above 4.5% annually over the past five years), mostly driven by previously sanctioned smaller projects that are unaffected by these bottlenecks.

In October 2018 a Shell-led consortium including PETRONAS, PetroChina, Mitsubishi Corporation and KOGAS took FID on the USD 31 billion LNG Canada liquefaction project in Kitimat, British Columbia. The two-train, 14 Mtpa project is planned to come online in 2025 and is the largest private-sector industrial project in Canadian history. Operations will marginally increase energy industry own use at the end of the forecast period due to gas consumption during the liquefaction process.

Residential and commercial demand is around 30% of natural gas consumption in Canada. Demand in this sector is anticipated to grow marginally due to population and economic growth outpacing the country’s planned improvements in energy efficiency. The increase observed in 2018 was due to weather conditions and returns to usual consumption levels assuming normal weather.