Global natural gas demand growth set to slow to 2025, says IEA
The International Energy Agency predicted that due to rising prices and worries about supply disruptions brought on by Russia’s conflict in Ukraine, global natural gas demand will decline this year before slowly increasing over the next three years.
In its quarterly gas report, the IEA predicted a 0 percent fall in global gas demand. This is less than half of the 370 cm increase in the previous five years and is lower than the demand of roughly 175 bcm last year. According to the report, lower economic activity and fewer people moving from coal or oil to gas as a result of high gas prices around the world are the main causes of the decline in demand growth.
The industrial sector and the Asia Pacific area are the primary drivers of growth, contributing respectively 50% and 60% of the increase to 2025, but this is likely to alter if there is weaker economic development and persistently high pricing.
Russian pipeline shipments to the EU may decline by more than 55 percent by 2025 compared to levels in 2021 due to a decision by the European Union to phase out all gas imports from Russia before the end of the decade. The demand for LNG in Europe is anticipated to exceed supply capacity expansions this year and could be responsible for more than 60% of the net growth in LNG commerce globally through 2025.
Due to lowered investment expectations following lower LNG prices in the middle of the previous decade and construction delays brought on by COVID-19 lockdowns, the addition of LNG capacity is expected to decelerate globally over the next three years.