Global gas demand to rise 1-2 pct in 2010 - IEA

ABU DHABI (Reuters) - Global gas demand is likely to rise by 1-2 percent in 2010 after falling by 3-4 percent last year, International Energy Agency (IEA) gas analyst Hiroshi Hashimoto said on Monday.

Most growth will be in countries that are not members of the Organisation for Economic Co-operation and Development (OECD), a group of 30 rich countries the IEA advises, although the United States may import more liquefied natural gas (LNG) because of the availability of cheap supplies.

"I see demand growth of 1 to 2 percent ... fuelled by demand in the Middle East, China and India," Hashimoto told Reuters, adding that the world's biggest LNG exporter may send more to the United States in 2010, despite low gas prices in the world's biggest energy consumer.

"Qatar can still make money sending LNG to the United States," he said.

Although demand is set to rise again in 2010 after an unprecedented dip in global gas consumption to around 3 trillion cubic metres last year, the recovery will not be strong enough to return to levels seen in 2007-2008, he said.

The IEA said last November global gas production capacity could exceed demand by up to 200 billion cubic metres a year by 2015, largely because U.S. gas production has boomed unexpectedly just as new LNG facilities in the Middle East aimed at supplying the United States have started up.

Some gas industry observers say a surge in Australian coal-bed methane production could hit conventional gas exporters just as hard, but Hashimoto said the market should be better prepared for the competing supply than it was for the largely unforeseen U.S. shale gas boom over the last few years.

"I don't think this will be a shock because those projects will be sanctioned based on long-term contracts with Asian buyers, so it will be a step by step process," he said.

DEMAND GROWTH

Part of the excess supply caused by the loss of appetite for imported gas in the United States will be mopped up by Middle Eastern consumers taking advantage of cheap gas.

Asian demand for imported gas surged at the end of last year, with China and South Korea both gobbling up much more LNG than at the end of 2008.

Korea's appetite for LNG has been strong enough to attract cargoes away from Europe this winter.

But Hashimoto said such high demand for imports in the world's biggest LNG consumer was unlikely to last.

"It's winter demand ... That demand is not sustainable," he said.

(Writing by Daniel Fineren; editing by Sue Thomas)