Global gas supplies are making for a buyer’s market as demand weakens and new supplies come on stream, according to a draft 2009 World Energy Outlook (WEO) by the International Energy Agency (IEA). The agency, which is set to issue its final report on Tuesday, is expected to announce another downward revision to its world oil forecast for the second year in a row.

The annual WEO report provides a quantitative outlook for energy supply and demand in the medium term (2010-2015) and the longer term (2015-2030). In addition to analyzing global gas markets, the 2009 report analyzes financing energy investments under a post-2012 climate framework and details energy trends in Southeast Asia.

Overcapacity of global gas pipelines and liquefied natural gas (LNG) terminals could reach “at least” 250 billion cubic meters by 2015, which would be four times the spare capacity in 2007, according to the draft report.

“Projected global demand points to significant under utilization of inter-regional pipeline and LNG capacity around the world,” the draft stated. “This looming glut could have far-reaching effects on gas pricing.”

Countries expected to take the biggest hit in an oversupplied gas market would be Russia, Qatar and Iran, which control the most gas reserves, the draft noted. Russia’s state-owned Gazprom could suffer a setback because an oversupply of gas would erode the control the company has held over consuming and transit countries; it also could leave the company’s LNG ambitions “unfulfilled” before 2030, the draft noted.

By itself an oversupply of global gas would reduce prices, but the gas markets also are seen taking a hit as countries move ahead to develop more renewable energy and nuclear power, according to the draft. Environmental policies to limit carbon dioxide emissions, far from supporting gas demand, could cause gas demand to peak in the early 2020s, it said.

The 2009 outlook “will provide updated projections that take into account the implications of the global credit crisis, the economic slowdown and the recent slump in the prices of oil and other forms of energy,” IEA said.

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