AlwaysFree: Asia LNG Demand Recovery To Depend On China, India Policies

The International Energy Agency (IEA) recently reported that global natural gas demand would likely fall by 150 Bcm (4%) to 3,850 Bcm this year. However, the market is expected to see a slow recovery starting in 2021, led by liquefied natural gas (LNG) consumption. However, the demand recovery will likely depend on China and India policies, according to Clyde Russell, a commodity and energy columnist at Reuters.

China is expected to take Japan’s position as the world’s no.1 LNG buyer in 2025. This prediction assumes that China will proceed with its coal-to-gas switching policies, although the future of the policy remains uncertain. However, it remains unclear whether China will stick with its transition toward natural gas. Beijing recently granted a green light for the construction of new coal-fired power plants as part of measures to bolster the virus-hit economy.

Meanwhile, India’s LNG demand is expected to grow by 28 bcm annually from 2019 to 2025. India aims at increasing the natural gas contribution in its energy mix from 6% last year to 15% in 2025. The country is also developing various LNG-related infrastructure to meet the target. India’s industrial sector is expected to drive gas demand growth, although the residential and transport sectors will also contribute to the increase.

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