IEA says global gas glut to exceed 200 bcm in 2011

LONDON (Reuters) - The global gas glut, in which capacity to supply gas exceeds the amount sold, is set to grow from 130 billion cubic metres (bcm) in 2009 to over 200 bcm in 2010, perhaps shrinking slowly from 2012, the International Energy Agency said.

"The glut of global gas-supply capacity that has emerged as a result of the economic crisis (which depressed gas demand), the boom in US unconventional gas production and a surge in liquefied natural gas capacity, could persist for longer than many expect," the IEA says in its latest World Energy Outlook report published on Tuesday.

The energy advisor for many of the world's largest industrialised economies said continued oversupply could pressure gas exporters to move away from oil-indexed gas pricing, resulting in cheaper gas and stronger demand than projected, especially from the power sector.

In the longer term, the IEA expects gas use to rise much faster than any other fossil fuels, with a projected 44-percent increase in global demand from 2008 to 2035 under the outlook's base case scenario, with China accounting for about a fifth of the global increase in the volume of gas consumed.

Nuclear power is seen increasing its share in the global energy mix from 6 percent to 8 percent, while renewables are expected to double to 14 percent of primary energy supply, the IEA said.

(Reporting by Daniel Fineren)