IEA’s Mid Term Gas Report Launched in Brussels Event – IENE’s Executive Director Was There

In a well organized event convened in Brussels by the Friends of Europe (www.friendsofeurope.org) last Wednesday (8/6), the international Energy Agency (IEA) launched its annual 2016 Mid Term Gas Report . IEA’s closely watched publication was introduced by the organization ‘s Executive Director, Dr Fatih Birolwho said that the next five years will bring a reshaping of the global gas trade as new liquefied natural gas (LNG) supplies are coming online just as demand growth in some major markets weakens, resulting in major shifts in global gas trade patterns. A weak outlook need to find other markets, added Birol, while China, India and ASEAN countries will emerge as key buyers.

"We see massive quantities of LNG exports coming on line while, despite lower gas prices, demand continues to soften in traditional markets,” said IEA Executive Director Fatih Birol. These contradictory trends will both impact trade and keep spot gas prices under pressure.” Dr. Birol added that the combined factors of cheaper coal and continued strong renewables growth were blocking gas from expanding more rapidly in the power sector.

The annual IEA report, which gives a detailed analysis and five-year projections of natural gas demand, supply and trade developments, sees global demand rising by 1.5% per year by the end of the forecast period, compared with 2% projected in last year's outlook. Slower primary energy demand growth and the decline in the energy intensity of the world economy are lessening demand growth for all fossil fuels, including gas. As demand growth for coal and oil also weakens, the share of gas in the energy mix is still expected to increase –albeit modestly– by 2021.

While gas demand is projected to remain weak, global LNG exports will increase substantially. Between 2015 and 2021, liquefaction capacity will increase by 45%, mostly from the United States and Australia. New projects in both countries have commenced ramping up production. Several others are at an advanced stage of development. By 2021, Australia will rival Qatar as the world’s largest LNG exporter and the US will not be far behind.

Following the report’s presentation by Dr Birol a lively panel discussion followed with the participation of Rune Bjørnson, the vice president of European Policy and Regulatory Affairs at Statoil , Philippe Jeunet , Member of the executive committee of ENGIE and Dominique Ristori, European Commission Director General for Energy.

Upon the invitation of the IEA, the Executive Director of IENE Mr. Costis Stambolis participated in the Brussels event for the launch of the IEA Mid Term Gas Report. Taking the floor during the Q+A session which followed, Mr. Stambolis asked Dr. Birol as to when he predicted, in view of latest developments, that gas markets would reach a stage similar to that of oil markets in terms of trading, marketability, shipping and availability ? Responding to the question Dr. Birol admitted that as gas is fast emerging as the main complimentary fuel on the road to energy market transformation and decarbonation, gas markets were indeed threading on the steps of the oil markets in terms of flexibility and tradability, a process which is to be accelerated with the growing presence of LNG. " Gas, sooner or later, will reach a market level similar to that of oil, thanks largely to the speedy inroads of LNG”, Dr Birol commented in replying to Mr. Stambolis’s question.