Chinese demand for natural gas is set to jump by more than 50% by 2040, from 400 billion cubic meters (bcm) now to more than 600 bcm, according to an executive at the top U.S. LNG exporter, Cheniere Energy.
“There’s no doubt that gas demand growth in China, in absolute terms, is substantially driven by energy demand, policies like coal-to-gas-switch as well as a huge infrastructure build-up,” Yingying Zhou, director LNG origination at Cheniere, said at the Asia Gas Markets conference on Tuesday, as carried by Reuters.
Cheniere expects China to become the world’s first market with 100 million tons of LNG demand very soon. LNG will represent about 25%-30% of China’s total natural gas demand, the executive added.
China, which has surpassed Japan in recent years to become the world’s largest LNG importer, will be a key growth driver of global LNG demand growth, industry analysts and major LNG traders say.
For example, Shell, the world’s top LNG trader, expects global LNG demand to surge by 50% by 2040, driven by higher demand from Asia, with coal-to-gas switching in China and a boost in LNG consumption to fuel economic growth in South and Southeast Asia. The global LNG market is set to continue growing into the 2040s, largely driven by China’s industrial decarbonization and strengthening demand in other Asian countries, Shell said in its annual LNG outlook earlier this year.
Asia, a key market of growing natural gas demand, is also expected to see another major driver of LNG demand—AI technology and data centers.
Natural gas, and in Asia’s case LNG, could be the big winner in this technology boom as gas-fired power dominates the electricity mix in many of the developed Asian economies, with emerging data center markets preferring gas over coal to power AI due to emissions reduction goals, Wood Mackenzie said in the report Gas Fuels Asia's Data Centre Boom last month.
By Charles Kennedy for Oilprice.com
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