After a decade of strong expansion, growth in global demand for natural gas is expected to slow in the coming years. This is driven by declining consumption in mature markets in Asia Pacific, Europe and North America. This is according to the latest outlook by the IEA.
Five key takeaways from the report are:
(1) After a peak in mature markets in 2021, gas demand is set to slow by a third over the forecast period: structural forces are set to drive down gas demand in mature markets by 1% per year over the medium-term;
(2) Demand growth is increasingly concentrated in fast-growing Asian markets, with China alone accounting for almost half of incremental gas demand through the forecast period;
(3) LNG is set for a strong, US-led expansion: global LNG supply grows by 25% by 2026, with 70% of supply additions concentrated in 2025-26. this vague of LNG will ease market fundamentals and supply security concerns in the second half of the decade;
(4) Low-emission gases are set to double: biomethane and low-emission hydrogen is set for a strong growth, but further efforts are needed to reach the ambitious government targets;
(5) Winter is coming: northwest Europe will have no access to two sources which were the backbone of its supply: Russian piped gas and Groningen. volatility and market tensions can’t be excluded especially in case of colder winter and lower LNG availability.
What is your view? How will gas markets evolve in the coming years?
Source: Greg Molnar (LinkedIn)