Pandemic to cut global gas and LNG demand by about 4% in 2020
The collapse in global gas demand due to government lockdowns to stop the spread of the virus caused prices to fall to record lows in Europe and Asia earlier this year
The coronavirus pandemic will cut global natural gas and liquefied natural gas (LNG) demand by about 4 percent in 2020 from record highs in 2019, according to a study by the International Gas Union, an industry lobby group, and others.
Still, demand can recover to pre-Covid-19 levels in the next two years as the world economy regains momentum, the study said, citing abundant supply and continued low prices.
The report projected global LNG demand will fall about 4.2 percent in 2020 after soaring 13 percent in 2019 to a record 482 billion cubic meters.
IGU partnered with Italian gas company Snam SpA and BloombergNEF, a research company, to write the report.
The collapse in global gas demand due to government lockdowns to stop the spread of the virus caused prices to fall to record lows in Europe and Asia earlier this year. US prices dropped to a 24-year low.
Analysts said prices are still low and are expected to remain relatively low for years, which should encourage utilities to burn more gas in coming years.
The International Energy Agency (IEA) said in the "Stated Policies Scenario" of its 2019 World Energy Outlook that gas use will grow by an average of 1.4 percent through 2040.
IEA, however, also said in its "Sustainable Development Scenario" that global gas use would decline from the end of the 2020s onward if governments embrace stronger climate policies.
IGU said about a third of energy-related emissions could be abated by adoption of clean gas technologies, like hydrogen.
"The goal is to bring down the cost of green hydrogen until it becomes competitive with fossil fuels," Snam CEO Marco Alverà said, noting "A smart way to scale up hydrogen production is blending it with natural gas in existing gas pipelines."
