Global gas demand declined by around 2.4% in 2020, noted an Anglo-Dutch hydrocarbons company Royal Dutch Shell.
In contrast, the annual growth rate observed since the beginning of the century is 2.5 percent.
Above all, the deterioration in gas demand for power generation and in industry was due to blockages related to Covid-19.
Still, demand for resilient heating gas helped offset the overall decline.
Demand fell in all regions except Asia outside the OECD.
In non-OECD Asia, gas demand grew in China, which experienced a robust recovery after mitigating the impacts of the pandemic.
Outside of China, aggregate gas demand in non-OECD Asia was stable year-over-year.
Gas demand
In 2020, global LNG imports were almost unchanged from 2019, increasing by approximately 2 million tonnes year-on-year to 360 million tonnes.
The growth of LNG supply capacity was mainly limited to the United States, where 21 million tons of new liquefaction began to operate commercially in 2020.
Already, the liquefaction plants that were in operation in the United States responded to the environment of weak gas prices by significantly reducing production in the middle of the year.
Also the supply of the main LNG exporting countries such as Egypt, Malaysia and Norway was lower year on year due to operational interruptions and closures to avoid economic losses.
Factors in the quote
In the United States, the price of natural gas at Henry Hub averaged $ 2.0 per million British thermal units (MMBtu) in 2020, this is 21% lower than in 2019.
It traded in a range of 1.5 to 3.2/MMBtu.
In the first part of 2020, there was downward pressure on prices due to declining demand, as a result of a mild winter, lower LNG exports and a weak domestic market caused by Covid-19.
For its part, supply fell because activity decreased as producers cut investments and because lower oil production meant that there was less associated gas.
During the summer, prices found support in the growing demand for gas that could generate energy to cool during the hottest months of the year.
Later in 2020, demand strengthened due to storage before the winter season and increased LNG exports from the United States.
In Europe, the average price at the UK National Balance Point (NBP) in 2020 was 28% lower than in 2019.
