Natgas demand outlook most attractive among fossil fuels - Goldman

* Natgas demand to see higher allocation of growth capital

* Gas demand to increase 4 times faster than oil

* Global gas inventory heading to summer below seasonal avg

SINGAPORE, May 16 (Reuters) - Demand for natural gas will top other fossil fuels in the long term on the back of rising number of electric vehicles and as new emission standards could see new vessels adopting alternative fuels, according to Goldman Sachs.

This will result in a higher allocation of growth capital in the years ahead, the investment bank said in a note released on Wednesday.

Demand for gas is expected to rise 1.7 percent per year in the period to 2035, four times faster than in case of oil, based on an average from the International Energy Agency and the Energy Information Administration.

“We believe they may diverge in the future as the market digests the robust increase in Chinese gas demand over the 2017-2018 winter,” Goldman Sachs analysts said.

Beijing is trying to switch more of its energy use to gas from coal to help clear up the foul air in the country’s north through a gasification push.

“Global LNG demand should rebound in the period to August, as cooling demand boosts power generation in temperate regions and Bangladesh ramps up imports at the country’s first regasification unit,” the bank said.

Bangladesh’s LNG demand is set to hit 17.5 million tonnes per year by 2025 after the country imported its first cargo last month.

Global gas inventory levels heading into the summer are below the seasonal average just as stocks of competing fuels, oil and coal, dive to multi-year lows, boosting gas prices, the analysts said.

Gas inventory across the Organisation for Economic Co-operation and Development may be 650 billion cubic feet (bcf) below average, equivalent to a shortfall of 4.3 days of demand.

The deficit in March-April was particularly acute in Europe where utilities increased imports of liquefied natural gas (LNG) and pipeline gas to rebuild inventory, they said.

LNG supply growth, on the other hand, is on track to reach 8 percent this year, after slowing to 4 percent in April due to disruptions in earthquake-hit Papua New Guinea and a dip in the utilisation of U.S. and Russian terminals, Goldman said.

As coal plants retire and the share of natural gas in the fuel mix grows, the scope for fuel switching in response to price change may become limited in some markets such as the United Kingdom where utilities have less flexibility, which could increase the appeal of gas as an investment, they said.

A greater willingness to take on price risk should allow producers with strong balance sheets to drive the next wave of LNG investment, they added. (Reporting by Jessica Jaganathan; Editing by Subhranshu Sahu)