Growth in global natural gas demand is expected to slow in the coming years as consumption declines in mature markets following a decade of unprecedented expansion, according to the International Energy Agency's (IEA) latest report on Tuesday.
Triggered by Russia's invasion of Ukraine last year, the global energy crisis has ushered in a different era for global gas markets, following a decade of strong growth from 2011 to 2021.
The increase in global natural gas demand will fall from an average of 2.5% in the 2017–2021 period to 1.6% in the 2022–2026 period, according to the IEA's new medium-term market report.
However, this growth is expected to slow down, especially in Asia-Pacific countries, Europe and North America by 1% annually through 2026.
Renewable energy deployment and energy efficiency improvements are primarily driving the decline in natural gas demand in these areas. This has been seen following Russia’s invasion of Ukraine, when Europe lost access to piped gas and sought alternative energy solutions to ensure energy security.
Asia, the Middle East and Africa are forecast to be the markets where growth in gas demand will intensify. China is projected to account for half of the expected global gas demand growth between 2022 and 2026.
Also, new liquefied natural gas (LNG) facilities commissioned in 2025–2026 are expected to partially relieve supply congestion in global gas markets. Global LNG capacity is set to grow by 25% between 2022 and 2026, with the US strengthening its position as the world's largest LNG exporter with its new facilities.
Growth in LNG supply indicates a shift to a more globalized gas market, which will improve resiliency for suppliers and consumers to respond to supply and demand shocks, the report says.
While the supply crunch continues, the risk of price volatility in the event of a harsh winter period is a concern, especially with LNG supply in Europe insufficient to compensate for the gap caused by Russian gas shortages.
IEA Energy Markets and Security Director Keisuke Sadamori stated that the world’s gas markets have entered a new and more uncertain era.
'This era is likely to be characterized by slower growth and higher volatility and could lead to a peak in global demand by the end of this decade,' he said.
As different trends are playing out across different regions, with demand declining in mature markets but continuing to grow in emerging and developing economies, Sadamori said the IEA expects significant growth in global LNG capacity in a few years, which will ease some of the tightness and security of supply concerns that markets have been experiencing since Russia started withholding supplies in 2021.
By Basak Erkalan
Anadolu Agency
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