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McKinsey Energy Insights releases report on global gas and LNG

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Oilfield Technology,

McKinsey Energy Insights has released its Global Gas and LNG Outlook to 2035. The report reveals that gas is the only fossil fuel expected to continuously rise in demand through to 2035.

The report reveals that, in 2018, China emerged as the world’s biggest importer of gas and LNG, overtaking Japan, and second biggest importer of LNG, overtaking South Korea. Total gas demand is set to rise by 0.9% a year, while Asian gas demand is set to rise by 2.1% a year in the same period, driven primarily by power and gas-intensive industries.

On the supply side, more than half of the global growth of 635 billion m3 by 2035 is predicted to be driven by the US—adding 380 billion m3 —followed by Russia (+110 billion m3), and Africa (+110 billion m3). Meanwhile, Europe and the Rest of Asia’s gas supply is forecast to decline rapidly.

“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 FID. In many ways, that sets the tone through to 2035: Asian economies in the ascendancy—led by China—with growing energy demand; the US continuing to rank highly for both supply and demand; but on the supply side Europe and Asia’s second-tier economies falling away. Overall though, this is a growth story for gas and LNG,” said Rahul Gupta, Associate Partner at McKinsey Energy Insights.

Construction of new pipelines will add more than 200 billion m3 of cross-border gas capacity by 2025, with the US and Russia retaining their positions as major piped gas exporters. Three US-Mexico projects reaching a total of 60 billion m3 are set to completed by the end of this year—the largest set of pipeline projects set be completed by 2025 globally. The world’s second largest set of pipeline projects expected to be completed by 2025 is Nord Stream 2, reaching a total of 55 billion m3 by 2020.

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