Highlights

  • Northeast Asian and Australian gas demand will grow in H2 – but by less than 1%
  • Chinese gas production is continuing to grow faster than demand
  • LNG imports into Asia will fall on an annual basis in H2
  • At $7.5/MMBtu in mid October, Asian spot LNG prices remain under pressure

Economic overview

India could see the strongest economic growth of any major economy in Asia Pacific over the next five years.

India’s economy is expected to grow by 7.3% in 2015, according to the International Monetary Fund’s latest World Economic Outlook. The pace of expansion is then set to increase further between 2016 and 2020. Larger investments, supported by policy reforms and lower commodity prices, are all expected to support economic growth in the country. India has been taking advantage of low spot prices to buy more LNG. Continuing low spot prices and strong economic growth are expected to support the prospects for Indian LNG imports over the coming months.

Asia Pacific GDP forecast

  2015 2016 2017 2018 2019 2020
Australia 2.4% 2.9% 3.1% 3.0% 2.9% 2.8%
China 6.8% 6.3% 6.0% 6.1% 6.3% 6.3%
India 7.3% 7.5% 7.5% 7.6% 7.7% 7.7%
Indonesia 4.7% 5.1% 5.5% 5.8% 6.0% 6.0%
Japan 0.6% 1.0% 0.4% 0.7% 0.9% 0.7%
Korea 2.7% 3.2% 3.6% 3.6% 3.6% 3.6%
Malaysia 4.7% 4.5% 5.0% 5.0% 5.0% 5.0%
Taiwan 2.2% 2.6% 2.9% 3.1% 3.1% 3.2%
Source: IMF World Economic Outlook Database, October 2015

In contrast, China’s growth will slow between 2015 and 2020. The economy is expected to expand by 6.8% in 2015, but growth will range from 6% to 6.3% between 2016 and 2020. The outlook is the result of slower investment growth, but this will be balanced by structural reforms. China’s gas demand looks likely to grow at a slower pace than GDP for the rest of this year – in contrast to the patterns seen over recent years. In 2013, gas demand grew by 15%, compared with GDP growth of 7.7%. Reduced economic growth will continue to constrain the expansion of China’s gas market.