Aerial drone ultra wide panoramic photo with copy space of LNG (Liquified Natural Gas) tanker anchored in small gas terminal island with tanks for storage

IEA: Global Gas Demand Growth Will Slowdown

12/10/2023
3 minutes

Global gas demand growth is expected to slow in the coming years. This follows from the latest medium-term gas market report for 2023 from the International Energy Agency (IEA).

Therefore, the unprecedented growth observed over the past decade is expected to decline due to reduced consumption in developed markets. According to the IEA’s medium-term forecasts, gas demand will continue to grow at an average rate of 1.6% until 2026 (it grew at 2.5% per year between 2017 and 2021), with the global energy crisis of 2022 becoming a tipping point.

Markets in Asia Pacific, Europe, and North America peaked in 2021 and are now expected to decline by 1% annually until 2026, due to accelerating deployment of renewable energy sources and improved energy efficiency. Future demand growth will be concentrated in fast-growing Asian markets and some gas-rich countries in the Middle East and Africa.

Liquefied natural gas (LNG) is expected to grow to 25% of global capacity between 2022 and 2026, marking a transition to a more globalized gas market that will improve supplier resilience and capacity, as well as enable consumers to respond to shocks in supply and demand.

“Following a period of prosperity between 2011 and 2021, global gas markets have entered a new and more uncertain period that is likely to be characterized by slower growth and greater volatility and that could lead to a peak in global demand by the end of this decade,” explained the IEA’s director for energy markets and security Keisuke Sadamori. “Trends vary across regions, with demand declining in mature markets but continuing to grow in emerging and developing countries.”

Gas prices fell between January and September 2023, but the next few months will be characterized by uncertainty and risks due to supply constraints not yet offset by LNG growth. Price volatility raises concerns, especially if the northern hemisphere faces a harsh winter. This is despite the fact that gas storage facilities in Europe are at 96% capacity.