Global Gas Meters Industry

Decarbonization Policies Guarantee a Secure Future for Natural Gas. Gas Meters to Reach $3.8Billion

The global market for Gas Meters is projected to reach US$3.8 billion by 2025, trailing a CAGR of 4.5% over the analysis period 2018 to 2025.Natural gas is forecast to remain the fastest-growing fossil fuel through 2035. Growth in demand is expected to mainly stem from the power-generation and industrial sectors in North America and Asia and residential and commercial sectors in Southeast Asia. A major portion of the gas supplies would be generated from the US, Russia, China, and Africa. China is expected to increase its gas production by two times over the period 2018-2035 while Europe is expected to register a decline. Meanwhile demand for LNG is expected to exceed that of overall gas with Asian markets depending more on distant supplies. Global demand for liquefied natural gas (LNG) increased by 12.1% to 350 million tones in 2019, reflecting the growing importance of LNG as the world transitions towards a lower-carbon energy system. The year witnessed a slew of mega-liquefaction projects, particularly in the US, Qatar, and Russia. Technology advancements also resulted in exploiting stranded reserves. Majority of the production stemmed from Europe as prices registered a decline gaining a competitive edge over coal. A growing number of oil companies such as BP, Chevron, ExxonMobil, Shell and Total have over the last few years increase their share of gas production. Improvement in technologies to transport gas from remote production areas to consumption centers is also helping boost investments in gas production. Currently, the natural gas market remains amply supplied. The US emerged as one of the largest exporters of LNG in recent years backed by the shale revolution. Shale gas accounts for about 70% of the country’s domestic production.

Currently, US, China, Canada and Argentina are commercially producing shale gas with Mexico and Algeria expected to begin production by 2030 and 2020 respectively. By 2040, these six countries are expected to account for nearly 70% of the global shale gas production. Production in Canada is forecast to increase and account for 30% of total natural gas production by 2040. As one of the first countries outside of North America to develop shale resources, production in China is forecast to account for more than 40% of the country’s total natural gas production by 2040. Increased foreign investment and improved pipeline infrastructure are expected to drive shale gas production in Argentina, accounting for 75% of total natural gas production by 2040. Against the backdrop of soaring supply of natural gas and transformation of natural gas from a purely regional to an internationally traded commodity, prices not surprisingly remain low and a major positive for gas meters. Increase in LNG trade is creating a lucrative business opportunity for monetizing large gas reserves. With the US and Australia building large export capacities for LNG, the supply continues to increase, keeping the gas price low and regional price spreads compressed. Compared to the volatility of oil prices, natural gas prices are relatively stable, a major advantage for the development of piped gas infrastructure. While natural gas prices in North America and Europe remain low, prices in Asia have been relatively volatile for most part. Production outages; high seasonal demand fluctuation; oil indexed pricing; and market specific conditions such as pipeline infrastructure, geography, supply, demand, shipping costs and geopolitics, all represent factors that contribute to the vast price spreads between the US, Europe and Asia.

A key reason for the rising prices of natural gas in Asia is China’s unwavering focus on clean air campaign and curbing pollution. The Chinese government unveiled bold plans to the replacement of coal with natural gas in industries in an attempt to battle chronic pollution issues. Beijing and Tianjin’s dedicated move to reduce urban air pollution has helped increase imports of natural gas. With 26 other Chinese states also expected to crackdown on pollution, demand is forecast to grow stronger in the coming years. Strong Chinese import demand has pushed up Asia’s LNG prices. In short, a combination of abundant supply of shale gas in North America; low gas prices in Europe and North America; increased demand for natural gas in Asia as a result of stringent clean energy regulations, is leading to a robust outlook for natural gas. The scenario will help reshape the measurement industry which includes gas meters.