The document discusses projections for global gas markets over the next 10-20 years. It predicts that world gas demand will increase in all scenarios, with most growth occurring in non-OECD countries. However, there are significant differences between scenarios, with as much as a 1.2 tcm difference by 2035. Key regions discussed include Europe, China, Japan, the US, Russia, and Australia. The role of liquefied natural gas is also examined.

1. Global gas markets over the
coming 10-20 years
Anne-Sophie Corbeau
Senior gas expert
© OECD/IEA 2012

2. Gas has a bright future
 World gas demand is expected to increase in all scenarios
 Most of the growth takes place in non-OECD countries
 But there are many disparities between the scenarios
 Difference of 1.2 tcm by 2035 = US + EU demand together
 4 times the world’s LNG export capacity as of 2011
©© OECD/IEA 2010
OECD/IEA - 2012

3. WEO 2011 New Policies Scenario
Gas and REN meet two thirds of incremental demand
World primary energy demand
5 000
Mtoe
Additional
to 2035
4 000
2010
3 000
2 000
1 000
0
Oil Coal Gas Renewables Nuclear
 Gas is the fastest growing fossil fuel (1.7%/y)
 Gas still ranks third, but the gap with coal goes down
©© OECD/IEA 2010
OECD/IEA - 2012

4. But the EU story is not always one of
growth…
Source: IEA, WEO 2011
 In the NPS scenario, EU gas demand is expected to grow from
508 bcm in 2009 to 593 bcm in 2020 and 629 bcm by 2035
 The power generation sector remains the main driver for growth
 But it would actually go down by 12% in the 450 scenario
©© OECD/IEA 2010
OECD/IEA - 2012
 Why? Less energy used, more renewables and more nuclear

5. Europe: cyclical and structural limits to gas
demand
 The Eurozone crisis
 Decreased competitiveness of gas versus coal
due to oil indexation
 Continuous push on renewables
 Along with mild weather in 2011
Led to a major (-8%) demand decline over the
first 10 months of 2011
Is a reversal in sight?
©© OECD/IEA 2010
OECD/IEA - 2012

6. German moratorium:
Even with policy success, gas will be needed to deliver
CO2 reductions
German electricity mix with 10% demand reduction, no nuclear, 35%
renewables and CO2 at the target level
©© OECD/IEA 2010
OECD/IEA - 2012

7. Why China is interested in natural gas
Environmental impact
 China’s gas demand will increase to 500 bcm by 2035 compard to
130 bcm in 2011
 Plans to reach 260 bcm by 2015…
©© OECD/IEA 2010
OECD/IEA - 2012  They will need new sources of supply

8. Japan: future of nuclear might have large
impact on gas demand
600 TWh/y
Nuclear in Pre-Fukushima energy strategy
500
10 bcm LNG burned in
CCGTs: 60 TWh
400
Power demand growth halved
by efficiency: 85 TWh
300
Building the current EU PV
2010 nuclear production capacity in Japan: 25 TWh
200
100 Current nuclear production on an annualized basis
27 Jan 2012:
0 3.1 GW currently operating (out of 49 GW)
2011 2015 2020 2025 2030 2035
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OECD/IEA - 2012

9. US power sector
The taste of things to come?
Shares of coal and gas in the power generation
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10. Russia remains the largest gas producer
Changes in annual production
©© OECD/IEA 2010
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11. International trade is bound to increase
 China, Europe and OECD Asia are by far the largest importers
 Additional exports will come from FSU, Africa and the Middle East
©© OECD/IEA 2010
OECD/IEA - 2012

12. Shale gas in Europe: slower ramp up than
in the United States
 Geology less favorable than
in the US
 Higher population density
 Lack of an onshore industry
tradition – skilled
labor, service companies etc.
 But: shale gas competes with
oil indexed import gas at 3
times the Henry Hub price
©© OECD/IEA 2010
OECD/IEA - 2012

13. Russia set for greater diversity
of gas export markets
 Net gas exports rise substantially from 190 bcm in 2010 to close
to 330 bcm in 2035, bolstered by an expansion of gas trade
©© OECD/IEA 2010
OECD/IEA - 2012
links with China

14. China becomes the main market for
Turkmenistan gas
 The Turkmenistan-China pipeline has shifted the centre of gravity
of Central Asia’s gas sector eastwards, but uncertainty remains
©© OECD/IEA 2010
OECD/IEA - 2012 over markets for offshore Turkmenistan gas

15. Expanding supply along a southern
corridor to European markets
©© OECD/IEA 2010
OECD/IEA - 2012

16. The next wave of LNG supply is almost
entirely dominated by Australia
 Over the next 6 years, most of the new LNG is expected to come
from Australia
 If it arrives on time
 This LNG is not going to be cheap
 Only the US seems to be in a position to challenge this if
©© OECD/IEA 2010
OECD/IEA - 2012 Cheniere’s project (15 mtpa) moves forward

17. The Arab Spring and Gas supply
 Interruptions and security issues with Libya
(pipe, LNG), Egypt (pipe to Israel), and Yemen (LNG)
 No issues with Algeria, Qatar and Egyptian LNG
 Probably a higher priority for using gas for domestic
development
 Iran ?
©© OECD/IEA 2010
OECD/IEA - 2012

18. LNG and security of gas supply
 Advantages
 LNG is flexible, does not depend on one producer
 LNG can provide short-term relief (sometimes at a cost) if import
infrastructure is there
 LNG available under long-term or short-term, can sometimes be redirected
 Twice as much regasification capacity as liquefaction capacity
 Potential issues
Increasing importance of Dependency on some maritime routes
Qatar, which holds most of the
flexible LNG volumes
Based on capacity existing and under
©© OECD/IEA 2010
OECD/IEA - 2012
construction

19. Thank you for your attention
Anne-Sophie.Corbeau@iea.org
©© OECD/IEA 2010
OECD/IEA - 2012