The United States is expected to account for more than half of the global natural gas supply growth through 2035, McKinsey & Company said in a new report.
The U.S., thanks to booming shale gas production, is expected to contribute 380 billion cubic meters (bcm) to global supply growth by 2035. The total global supply growth is seen at 635 bcm, according to McKinsey. The U.S. will be followed by Russia and Africa, which will add 110 bcm to global supply each. On the other hand, gas supply in Europe will decline, the report showed.
The pace of growth in the gas market is set to slow, but natural gas will remain the fastest-growing fossil fuel and the only fossil fuel expected to grow beyond 2035, McKinsey said in its ‘Global gas and LNG outlook to 2035’ report.
“The past year saw the natural-gas market grow at its fastest rate in almost a decade, supported by booming domestic markets in China and the United States and an expanding global gas trade to serve Asian markets,” according to the McKinsey analysts.
Over the past twelve months, the global gas market expanded by 5.3 percent, while the liquefied natural gas (LNG) market increased by 8.6 percent in 2018, the report says.
LNG demand is expected to grow at 3.6 percent every year until 2035. In order to meet additional demand after 2027-2028, the industry will need to invest more than US$400 billion across the LNG value chain, McKinsey noted.
“We expect LNG demand to outpace overall gas demand as Asian markets rely on more distant supplies, Europe increases its gas-import dependence, and US producers seek overseas markets for their gas (both pipe and LNG),” according to the report.
Earlier this year, the International Energy Agency (IEA) said that the United States would surpass current market leaders Australia and Qatar to become the world’s biggest LNG exporter in 2024, while China will become the top LNG importer, outpacing Japan.
By Tsvetana Paraskova for Oilprice.com