Among fossil fuels, only natural gas will likely continuously grow in demand through 2035.
That is the conclusion of a new report from McKinsey Energy Insights, the global energy market intelligence and analytics arm of the management consulting firm McKinsey & Co. In addition, the study’s authors contend that 2018 was a turning point in terms of gas and liquefied natural gas (LNG) market dynamics.
“We’ll look back at this as a milestone year, when China became the world’s biggest LNG importer and we saw the highest volume of liquefaction projects taking final investment decision (FID),” Rahul Gupta, associate partner at McKinsey Energy Insights, said in a written statement emailed to Rigzone. “In many ways, that sets the tone through to 2035: Asian economies in the ascendancy – led by China – with growing energy demand; the U.S. continuing to rank highly for both supply and demand; but on the supply side Europe and Asia’s second-tier economies falling away.”
According to McKinsey’s Global Gas and LNG Outlook to 2035 report, China last year overtook Japan as the world’s biggest importer of gas and LNG and surpassed South Korea to become the second-biggest LNG importer. Moreover, McKinsey expects China, ASEAN countries and South Asia to account for 95 percent of global LNG demand growth until at least 2035.
Driven by the power and gas-intensive industries, Asian gas demand should increase 2.1 percent annually to 2035, McKinsey also concludes. In contrast, the study assumes a total worldwide demand growth rate for gas – already the fastest-growing fossil fuel – of 0.9 percent per year.