2. Supply

2. Supply

Highlights

•2018 was another year of record output for major producers such as the United States, People’s Republic of China (“China”), Australia, Russian Federation (“Russia”) and Islamic Republic of Iran (“Iran”). Other countries, such as Egypt and Argentina, saw their domestic supply gap close on the back of strong production recovery.

•Global natural gas production is expected to grow at an average annual rate of 1.6% over the forecast period, driven by a limited number of countries, mainly for domestic market needs (e.g. China, Iran and Egypt) but for a few by developing exports (the United States and Russia, and Australia mainly in the early part of the projection period).

•The United States continues to lead in terms of individual contribution to gas production growth, mainly driven by oil-rich associated gas production increases over the first two years of the forecast, then by further development of dry shale gas plays. US production passes the 1 tcm mark by the end of the forecast period.

•Apart from Australia, Asia Pacific countries and territories see their supply gap increase in the medium term. Strong growth in production in China cannot keep pace with consumption growth. For most other countries production growth is limited while domestic needs increase strongly.

•In spite of its stable consumption, Europe sees its supply gap widen due to domestic production depletion or phase-out in the case of the Netherlands. This results in higher import dependency due to a loss of above 45 bcm of production by 2024 compared to 2018.

Global overview

Global natural gas production is forecast to rise from 3 940 billion cubic metres (bcm) in 2018 to 4 332 bcm by 2024, an average annual increase of 1.6% (Table 2.1). The United States provides the largest individual contribution to this increase thanks to the continuous development of its ample shale gas resources, both for domestic and export markets. US production reaches above 1 trillion cubic metres (tcm) by the end of the forecast period. Canadian production growth remains limited by the absence of export outlets until 2024 – the LNG Canada project is assumed to start operations by 2025.

China and Australia drive production growth in the Asia Pacific region. Australian growth takes place mainly during the early years of the projection period, driven by the ramping up of its liquefied natural gas (LNG) export projects, whereas China is expected to have strong and continued growth of 7.1% on average – although not sufficient to cover the country’s

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