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Business News/ News / World/  Over half of global gas supply to come from US by 2035: McKinsey
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Over half of global gas supply to come from US by 2035: McKinsey

Three US-Mexico projects reaching a total of 60 bcm are set to complete by the end of this year
  • Construction of new pipelines will add more than 200 bcm of cross-border gas capacity by 2025
  • In 2018, China emerged as the world’s biggest importer of gas and LNG, overtaking Japan. (Photo: Reuters)Premium
    In 2018, China emerged as the world’s biggest importer of gas and LNG, overtaking Japan. (Photo: Reuters)

    Mumbai: Over half of global gas supply growth of 635 billion cubic metres by 2035 is expected to be driven primarily by the United States at +380 billion cubic metres, says the Global Gas and LNG Outlook 2035 from McKinsey Energy Insights, the global energy market intelligence and analytics arm of McKinsey & Company.

    Gas supply growth will be followed by Russia at +110 bcm and Africa at +110 bcm while production in Europe and the Rest of Asia will decline rapidly.

    "While liquefied natural gas (LNG) demand grows at 3.6% per annum between 2018-35, we see oversupply returning to the market in 2024-2026 with the new capacity required only from 2028-29 onward," says the report.

    While 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.

    McKinsey expects demand to continue rising in the region, with China, ASEAN, and South Asia to account for 95% of global LNG demand growth until at least 2035. Total gas demand is set to rise by 0.9% p.a., while Asian gas demand is set to rise by 2.1% p.a. in the same period, driven primarily by power and gas-intensive industries.

    "China is expected to experience the largest growth in LNG imports between 2018 and 2035 adding 126 bcm. South Asia and South-East Asia will be relevant LNG demand growth centres amid declining local demand profile," says the report.

    Also, construction of new pipelines will add more than 200 bcm of cross-border gas capacity by 2025, with the United States and Russia retaining their positions as major piped gas exporters.

    Three US-Mexico projects reaching a total of 60 bcm are set to complete 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 bcm by 2020.

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    Published: 18 Sep 2019, 10:25 AM IST
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