- •Foreword
- •Acknowledgements
- •Table of contents
- •List of figures
- •List of boxes
- •List of tables
- •Executive summary
- •After another record year, gas demand is set to keep growing to 2024
- •Asia is the key to demand growth, driven by China’s push for gas
- •The United States leads global growth in natural gas supply and exports
- •The global gas trade’s expansion is mainly driven by LNG
- •LNG investment is increasing, but more will be needed
- •Towards a global convergence of natural gas prices?
- •1. Demand
- •Highlights
- •Global overview
- •Sectoral outlook
- •Focus on LNG as a maritime fuel
- •Assumptions
- •Regional outlook
- •Asia Pacific
- •China
- •Japan
- •Korea
- •Australia
- •Other emerging Asian economies
- •India
- •Pakistan
- •Bangladesh
- •North America
- •United States
- •Canada
- •Mexico
- •Middle East
- •Iran
- •United Arab Emirates
- •Saudi Arabia
- •Eurasia
- •Russia
- •Belarus
- •Ukraine
- •Caspian
- •Europe
- •Power generation
- •Residential and commercial
- •Industry
- •Central and South America
- •Argentina
- •Brazil
- •Africa
- •Egypt
- •Algeria
- •Other North Africa
- •Sub-Saharan Africa
- •References
- •2. Supply
- •Highlights
- •Global overview
- •Regional supply outlook
- •North America
- •United States
- •Canada
- •Mexico
- •Asia Pacific
- •China
- •Unconventional gas
- •Developing the network to reduce internal supply bottlenecks
- •Increasing UGS capacity to develop seasonal flexibility
- •Australia
- •Other emerging Asian economies
- •India
- •Indonesia
- •Middle East
- •Iran
- •Qatar
- •Saudi Arabia
- •Eurasia
- •Russia
- •Azerbaijan
- •Other Caspian
- •Europe
- •Norway
- •The Netherlands
- •Other Europe
- •Central and South America
- •Argentina
- •Brazil
- •Africa
- •Egypt
- •Algeria
- •Sub-Saharan Africa
- •References
- •3. Trade
- •Highlights
- •Global natural gas trade
- •Regional trade outlook
- •Asia Pacific
- •China
- •LNG infrastructure
- •LNG supply
- •Pipeline imports and infrastructure
- •Japan and Korea
- •Other emerging Asian economies
- •Europe
- •Recent trends
- •A widening supply–demand gap
- •Natural gas infrastructure
- •The role of LNG
- •Americas
- •North America
- •South America
- •Global LNG market
- •2018 marked a third year of strong LNG trade growth
- •LNG demand outlook
- •LNG supply outlook
- •LNG trade flows
- •Liquefaction capacity and investment
- •LNG shipping outlook
- •References
- •4. Prices and market reforms
- •Highlights
- •Market prices in 2018–19
- •Asian LNG prices – from tight to loose
- •Europe – a counter seasonal price pattern
- •North America – stability and volatility
- •Global natural gas pricing overview
- •Prospects for natural gas trading hubs in Asia
- •Pricing and market reforms in regulated environments
- •China
- •City gate prices
- •End-user prices
- •India
- •Pakistan
- •Egypt
- •Russia
- •References
- •Annexes
- •Tables
- •Glossary
- •Regional and country groupings
- •Africa
- •Asia Pacific
- •Caspian
- •Central and South America
- •Eurasia
- •Europe
- •European Union
- •Middle East
- •North Africa
- •North America
- •List of acronyms, abbreviations and units of measure
- •Acronyms and abbreviations
- •Units of measure
Gas Market Report 2019 |
1. Demand |
reactor was given approval to restart operations in 2018, with a total of 15 nuclear reactors having obtained approval. Ten further reactors are applying and under review for safety approval to restart. Sixteen nuclear reactors have yet to apply. In addition, four reactors restarted in 2018 by meeting the newest standards, Ohi No.3 and No.4, and Genkai No.3 and No.4, which are 1.2 GW each. Thus, nine reactors are operating in total at the time of writing. An additional six reactors are preparing to restart after approval (Figure 1.7).
However, the outlook for nuclear restarts could be further challenged as, in late April 2019, the NRA has reportedly refused to further extend deadlines for utilities to build emergency facilities for reactors in the event of terrorist attack, with a risk of shutdown for units that do not comply with construction timelines. The earliest deadline is in March 2020 for the Sendai No.1 reactor. This decision may affect at least 10 reactors with deadlines within the forecast period (Stapczynski and Inajima, 2019).
A further pressure on gas consumption in the power sector is increasing generation from renewable energy sources. Between 2011 and 2018 power production from renewables increased from 127 TWh to 191 TWh, mostly led by solar power (IEA, 2018c). This forecast assumes strong growth of renewable energy generation at a rate of around 5% per year, equivalent to an increase of almost 65 TWh from the 2018 level.
Figure 1.7. Status of safety approval for nuclear power reactors in Japan, 2013–18
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Decommissioned |
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GW |
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Not yet applying for safety |
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40 |
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permission |
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Applying for safety |
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30 |
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permission |
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Preparation for restart |
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In operation (stopped |
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following court order) |
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In operation |
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2013 |
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2017 |
2018 |
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IEA, 2019. All rights reserved.
Source: IEA compilation based on information from company websites.
Nuclear restarts began in 2016, but as of the end of 2018 less than one-quarter of capacity that applied for safety permission has actually resumed operations.
Korea
Natural gas consumption in Korea has shown a rebound since 2016 after decreases in 2014 and 2015 (Figure 1.8). LNG imports actually increased by 16% in 2018, mainly driven by new contracts and long-term contracts ramping up, with the difference absorbed by Korea’s ample LNG storage capacity. Demand peaked in 2013 when almost half of the natural gas supply was consumed in the power sector. Gas consumption in this sector decreased in the following years, declining by 2.5% per year on average, as gas power generation was
PAGE | 27
IEA. All rights reserved.
Gas Market Report 2019 |
1. Demand |
displaced by increased output from new coal-fired generation plants as well as nuclear power. However, natural gas demand for power generation recovered to its 2012 level in 2018, thanks to limitations on coal generation.
The Korean government announced a policy of reducing coal generation due to severe air pollution in 2019. One of the main features is the simultaneous increase in coal import tax (up 28% to about USD 40/tonne) and a 75% cut in LNG import tax (to about USD 20/tonne) enacted from 1 April 2019 (Russell, 2019), alongside the setting of additional operational load limitations on coal-fired power plants. Furthermore, early retirement of older coal-fired power plants and conversion to natural gas will be considered. The detailed rules are expected to be included in Korea’s 9th Basic Plan for Long-Term Electricity Supply and Demand, which is due to be issued by the end of 2019. However, the commissioning of two new nuclear reactors (Shin Kori 5 and 6) scheduled in 2022 and 2023 respectively (WNN, 2019) is likely to introduce more competition for natural gas in power generation in the second half of the forecast period (Figure 1.8).
The residential and commercial sector accounts for roughly 30% of consumption, and this level is expected to continue throughout the forecast period of 2019–24. The industrial sector, where iron and steel and chemical/petrochemical companies lead consumption, accounts for 20% and is expected to retain this proportion over the forecast period.
Figure 1.8. Natural gas demand, Korea, 2004–24
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bcm |
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2004 |
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2014 |
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2018 |
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2022 |
Losses
Energy industry own use
Transport
(including pipeline)
Residential and
commercial
Industry
Power generation
2024
IEA, 2019. All rights reserved.
Natural gas consumption has rebounded in Korea since 2017 with more stringent emission controls on coal, but is expected to decrease in 2022–23 as new nuclear capacity is scheduled to begin operating.
Australia
The structure of Australia’s natural gas consumption has been strongly affected by the development of LNG export projects – especially on the east coast – resulting in energy sectorrelated needs (or own use) accounting for a growing share of the country’s total natural gas consumption. Australian natural gas consumption increased by 1% in 2018, driven by this demand from the energy sector as the last LNG plants from the current wave of investment enter service. Consumption linked to natural gas production and liquefaction is expected to remain the main driver of total natural gas demand trends for the forecast period (Figure 1.9).
PAGE | 28
IEA. All rights reserved.