1) Global oil demand remains robust and is projected to increase by 1.4 mb/d in 2019, with China and India accounting for almost half of the growth. Renewables accounted for almost half of the growth in electricity generation in 2017 and are projected to meet a higher share of future growth. 2) Natural gas demand is growing rapidly thanks to its flexibility and ability to reduce environmental problems. China has become the largest natural gas importer and U.S. production and LNG exports are rising dramatically. Industry is now the leading driver of gas demand growth. 3) The U.S. accounts for almost 45% of the growth in global natural gas production and 75% of growth in LNG exports between 2017

1. © OECD/IEA 2018
NATURAL GAS AND LNG IN THE
FUTURE OF GLOBAL ENERGY
Dr. Fatih Birol
Executive Director, International Energy Agency
IEA
World Gas Conference, 26 June

2. © OECD/IEA 2018
Global oil demand remains robust
Global oil demand is set to rise by 1.4 mb/d in 2019, with China and India accounting for almost half of the increase;
Petrochemicals are becoming increasingly important drivers of oil demand
0
0.4
0.8
1.2
1.6
2
2005-2014
mb/d
2016 2017 2018 20192015

3. © OECD/IEA 2018
Renewables accounted for almost half of the growth in electricity generation in 2017 and are set to meet a
higher share of the growth going forward
Annual electricity generation growth by technology
Renewables growing rapidly in the power sector
0
50
100
150
200
250
300
350
400
450
Renewables Other sources Renewables Other sources
Annual average (2000-16) 2017
TWh
Other sources
Hydro and other
renewables
Wind
Solar PV

4. © OECD/IEA 2018
Natural Gas – Outlook for the next 5 years
n Gas demand is in the fast lane, thanks to its flexibility & ability to ease
environmental problems
n Global gas markets are being re-shaped by three major structural shifts
Ø China becoming the world’s largest natural gas importer
Ø US gas production and LNG exports rising dramatically
Ø Industry displacing power generation as the leading growth sector
n The gas industry’s future remains bright, but it is not without challenges
Ø Gas price competitiveness & market reforms in emerging markets
Ø Curbing methane leaks along the value chain

5. © OECD/IEA 2018
Industry has taken over from the power sector as the drivers of gas demand;
China accounted for 30% of the increase in global gas demand in 2017
Growth in global natural gas demand
Natural gas – life in the fast lane
bcm
2000-2016
average
2017
30
60
90
120 Industry,
buildings &
others
Power
generation

6. © OECD/IEA 2018
China dominates world gas consumption growth
Global consumption passes the 4 tcm mark by 2022
China to account for almost 40% of growth driven by clean air policy target
World natural gas consumption growth for selected countries and regions, 2017-23
6
bcm
-20 0 20 40 60 80 100 120
Russia
Japan
Europe
Latin America
Africa
India
United States
Middle East
China

7. © OECD/IEA 2018
The United States takes the lion’s share of the growth in global supply
The United States accounts for almost 45% of global growth in natural gas production and 75% of growth in
LNG exports
Natural gas production growth for selected countries and regions, 2017-23
7
-50
0
50
100
150
200
United States Middle East China Australia Russia Egypt Europe
bcm
Domestic market Export market

8. © OECD/IEA 2018
2011-17
Power generation Industry Residential and commercial Other sectors
Industry surpasses power generation to lead growth
Industry accounts for over 40% of the growth in global gas demand to 2023, mainly on greater use for
petrochemicals and fertilizers
Natural gas consumption growth by sector (%)
8
2017-23

9. © OECD/IEA 2018
After remaining flat for 3 years, global CO2 emissions rose again in 2017, to an all-time high
Global energy-related CO2 emissions
After plateauing for 3 years, global emissions are on the rise again
CO2 emissions
Increase in 2017
5
10
15
20
25
30
35Gt CO2

10. © OECD/IEA 2018
China was a remarkable success story for electrification, bringing access to hundreds of millions in record time;
India achieved electricity access for all its villages in 2018; Today the challenge is concentrated in sub-Saharan Africa
Population without electricity access
Electrification success elsewhere, but sub-Saharan Africa still remains in the dark
500
1 000
1 500
2 000
2 500
1985 2000 2017 2030
million
Rest of World
Sub-Saharan Africa
India
China

11. © OECD/IEA 2018
Conclusions
n The versatility of natural gas means that it is well placed to grow, with LNG underpinning
the shift to a more competitive, global gas market
n Gas demand continue to rise in all IEA scenarios to 2040
n For the future of gas to remain bright, prices need to stay competitive in emerging
markets & industry needs to continue to improve its environmental performance
n Gas can play a role in overcoming the challenges of local air pollution, climate change &
energy access
n The IEA will continue to help governments & industry with timely data, rigorous analysis,
an all-of-technology approach and real-world solutions