Despite declines in South Korea and Japan, total demand in Northeast Asia is expected to rise in 2016 on an annual basis – driven by strong growth in China.
Northeast Asian gas demand is expected to reach around 390 billion cubic metres in 2016, up by 3% from 2015. Consumption in South Korea has fallen on an annual basis for most months this year, with an overall decline of around 4% expected for 2016 as a whole. As new coal-fired power generation has come online and more efficient combined-cycle gas turbines have accounted for an increasing share of the power mix, demand for gas from the power sector has taken a hit, and this trend is expected to continue over the coming months. A colder-than-average start to Q4 could support gas consumption levels, but the most recent forecasts suggest this is unlikely. Additionally, following the earthquake which hit the country in September, some CCGT capacity remains offline for safety inspections. This could limit power sector gas consumption in the coming weeks.
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