Gas to overtake coal by 2030: IEA

Oil will remain as the largest source of energy

Natural gas is expected to overtake coal as the world's second largest energy source after oil by 2030 due to a drive to cut air pollution and the rise in liquefied natural gas (LNG) use, the International Energy Agency (IEA) said.

The IEA said in its World Energy Outlook 2018 that energy demand would grow by more than a quarter between 2017 and 2040 assuming there will be more efficient uses of energy - but would rise by twice that much without such improvements.

Global gas demand would increase by 1.6 percent a year to 2040 and would be 45 percent higher by then than today, it said.

The estimates are based on the IEA's "New Policies Scenario" that takes into account legislation and policies to reduce emissions and fight climate change. They also assume more energy efficiencies in fuel use, buildings and other factors.

"Natural gas is the fastest growing fossil fuel in the New Policies Scenario, overtaking coal by 2030 to become the second-largest source of energy after oil," the report said.

China, already the world's biggest oil and coal importer, would soon become the largest importer of gas and net imports would approach the level of the European Union by 2040.

According to Reuters calculations, based on China's General Administration of Customs data, China has already overtaken Japan as the world's top natural gas importer.

Although China is the world's third-biggest user of natural gas behind the US and Russia, it has to import about 40 percent of its needs as local production cannot keep pace.

"Although talk of a global gas market similar to that of oil is premature, LNG trade has expanded substantially in volume since 2010 and has reached previously isolated markets," it said.

The US would account for 40 percent of total gas production growth to 2025, the IEA said, while other sources would take over as US shale gas output flattened and other nations started turning to unconventional methods of gas production.