Utilities–Natural Gas–Global Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on US Natural Gas Market

• The US is a net exporter of natural gas and depends manly in the domestic production to meet the demand. Natural gas production increased by just 0.8 percent in 2020 as compared to 2019s production

• Natural gas consumption in the US declined by -1-(-2) percent. Demand declined in 2020 with a major decline coming from commercial and industrial segments

• The US contributes 82 percent of the North American natural gas production and 23 percent of the global gas production

• In the US, demand for natural gas increased across commercial, industrial and residential segments. Gas consumption in Q1 2021 is expected to increase compared to Q4 2020. Gas consumption from power plants witnessed a reduction in Q4 2020.

• Consumption of natural gas in the industrial and commercial segment increased Q4 2020 on Q-o-Q but the consumption was lower by 3.8 percent as compared to Q4 2019 indicting a negative impact of the pandemic. With recovery in gas prices, electricity producers decreased their usage of gas

COVID-19 Impact –Natural Gas (US) 

• COVID-19 forced countries to implement strict social distancing norms, isolation measures and shutting down of industries and businesses and this has led to a price a decline in Q2 2020. The prices have recovered in Q4 2020 due to winter demand and rise in exports.

 Global Market Outlook on Canada Natural Gas Market

• The national demand is expected to grow at approx. 1-2 percent CAGR through 2019-2022

• The top five natural gas production companies hold for more than 40 percent of the share and the rest of the market share by many other private players

• The midstream sector which includes the transmission of natural gas is done by TransCanada Group which holds for more than 50 percent of the market share

• Canada is sixth largest producer of natural gas and exporter of natural gas globally

Impact of COVID-19 on Natural Gas –Canada

• The natural gas sector has recovered from a significant impact, as industrial demand has recovered. The expected winter demand increasing gas usage for heating applications also acts as a relief for the sector.

• In 2019, Canada imported 0.07 bcm/d of natural gas from the US. 98 percent of the US imports are from Canada and 9 percent of the entire consumption in the US is accounted through it. 99 percent of Canadian imports come through the US and 21 percent of Canada’s consumption comes from this.

• The renewable energy and energy efficiency technology OEM companies have faced problems due to supply chain disruption with travel impositions and reduced industrial output globally due to the lockdown effect.

• Natural gas market wi tnessed lower prices gl obally after the outbreak of COVID-19 in China and gl obally. China, being the s econdl argest i mporter of LNG, the reducti on in demand i n China has caused s urplus supply globally. The demand i n other As ian Countri es like Japan has also reduced from February which has impacted more on the decl ining trend of gas prices

• Canada’s natural gas prices witnessed a reduction of 22 percent in the month of January 2020 after the outbreak of COVID-19 in Chi na. LNG prices were already facing a downward pressure due to mi l d wi nter months in North America and after the COVID-19 outbreak, i t has acted as catalyst to the al ready tumbling gas prices.

 Global Market Outlook on Australia Natural Gas Market

• Australia’s natural gas demand is expected to increase at a CAGR of 6.3 percent during 2015–2020, with an increasing share of power industries and rising domestic demand in natural gas consumption

• Australia’s natural gas production is expected to increase by 18.81 percent in 2020, with a rise in East Coast and Queensland CSG production

• The electricity generation sector is expected to decreased its share in natural gas consumption in the coming years, due to an increasing share of renewables in fuel mix

• Australia was the second largest exporter of LNG next to Qatar, with 104.7 BCM of LNG exports at the end of 2019

• Australia’s natural gas consumption is expected to increase by 6.35 percent to reach 57.15 billion cubic meters in 2020 and is expected to increase at a CAGR of 6.3 percent during 2015–2020, with an increasing share of power industries and rising domestic demand in natural gas consumption.

• Australia’s natural gas proven reserves stoodat 84.4 Tcf in 2019, relatively modest and unchanged to 2018 reserves

• Australia has a R/P ratio of 15.6 years, which is lower than the world’s average of 49.8 years, indicating higher demand in the coming years, cautioning to increase explorations and productions

• AWE report independent review had increased by 78 percent, the estimated reserves for Waitsia natural gas field in thePerth Basin of Western Austr

• Australia’s gas reserves are relatively modest, the country overtook Qatar’s exports and was the world’s largest LNG exporter in 2019

• alia, which has a largest onshore discoveryfor 40 years and is destined for the domestic market