IEA: Global Gas Demand Growth Will Slow Down

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The International Energy Agency (IAA) predicts that the increase in global gas demand will decrease in the coming years. According to IEA’s 2023 Medium Term Gas Market report, it is estimated that the increase in gas demand in the world will decrease from an average of 2.5 percent in the 2017-2021 period to 1.6 percent in the 2022-2026 period.

The strong growth seen in the 2011-2021 period in the gas markets, which has entered a new era after the war started by Russia in Ukraine, is expected to weaken and demand will decrease, especially in Australia, Japan, Korea, New Zealand and Singapore, as well as Europe and North America. Conversion to renewable energy sources and progress in energy efficiency are effective in the slowdown in demand in these markets.

Asia, the Middle East and Africa are expected to be the markets where growth in gas demand will be concentrated. It is predicted that China will account for half of the expected global gas demand increase in the 2022-2026 period.

While it is estimated that the supply congestion in the global gas markets will be partially relieved with the liquefied natural gas (LNG) facilities that will come into operation in the world in 2025-2026, it is estimated that the global LNG capacity will grow by 25 percent in the 2022-2026 period. During this period, it is anticipated that the USA will consolidate its position as the world’s largest LNG exporter with new facilities.

Gas Price Warning As Winter Approaches

According to the report, although there is a decrease in natural gas prices this year, uncertainty and risks continue. While the supply squeeze continues and LNG supplies, especially in Europe, are insufficient to compensate for the gap caused by Russian gas, the risk of price volatility in the event of a harsh winter period is a concern.

UEA Energy Markets and Security Director Keisuke Sadamori, in his evaluation of the report, stated that world gas markets have entered a new era and said, “The characteristics of this new era with more uncertainties are slowing demand growth and high volatility. We can see global gas demand peaking by 2030.” ” he said.

Noting that gas demand will follow a different course in developed and developing countries, Sadamori added that they expect a significant growth in global LNG capacity in a few years and that this will help alleviate the supply squeeze.

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