China is fastest growing market for natural gas

China’s switch to gas-fired power generation will significantly increase global gas demand.

The International Energy Agency said global gas demand will rise by 2.7% a year until 2017 to hit 3.94 trillion cubic meters. China and the USA are expected to drive this growth as both nations switch from coal to gas-fired power generation.

IEA said China remains the fastest growing market for natural gas. Its gas demand is expected to double from 130 billion cubic meters in 2011 to 273 billion cubic meters in 2017, representing an average growth rate of 13% per year.

"To reach these levels, there are certain key policy issues regarding pricing and regulation that China is assumed to have tackled," IEA said. "In particular, the power generation sector is key and gas-fired plants need to be more competitive against coal-fired plants.

Over the six year-period, global gas demand will grow by 17%, or 576 billion cubic meters. The new estimate compares to an average annual growth of 2.4% predicted last year to 2016.

It comes after gas demand grew a weak 2% to 3.36 trillion cubic meters last year, dragged down by the debt-crisis and mild weather in Europe.