Global Demand for Natural Gas to Rise by 2.5% in 2024 -IEA

Global demand for natural gas is projected to rise by 2.5% in 2024, according to the International Energy Agency (IEA).

Global gas demand is anticipated to increase by over 2.5 percent in 2024, with a similar growth trajectory expected for 2025, as indicated in the latest edition of the International Energy Agency's (IEA) annual Global Gas Security Review.

In 2023, Africa's natural gas reserves were estimated at more than 17.89 trillion standard cubic meters, with Nigeria possessing the largest share at approximately 5.94 trillion standard cubic meters, representing about three percent of the world's proven natural gas reserves.

The report, released yesterday, called on both producers and consumers to collaborate in ensuring the security of global gas supplies in light of escalating geopolitical tensions.

The IEA noted that global natural gas demand is rising at a faster pace in 2024 compared to the previous two years, which were significantly impacted by the global energy crisis. However, it also pointed out that new gas supplies entering the market in 2024 are expected to be limited.

This limitation is attributed to the relatively slow expansion of Liquefied Natural Gas (LNG) production, coupled with ongoing geopolitical tensions that contribute to price fluctuations.

The IEA report highlights that rapidly growing markets in Asia are responsible for a substantial portion of the demand increase in 2024, while a recovery in Europe’s industrial gas demand is also playing a role, despite remaining below pre-crisis levels.

Additionally, the new Security Review incorporates the IEA’s most recent quarterly analysis of the Gas Market Report

IEA Director of Energy Markets and Security, Keisuke Sadamori, stated that the increase in global gas demand observed this year and projected for next year signifies a gradual recovery from the severe global energy crisis that significantly impacted markets.

He emphasized, however, that the equilibrium between demand and supply remains precarious, with evident risks of future fluctuations. It is essential for producers and consumers to collaborate closely during these uncertain times, while also prioritizing the advancement of clean energy transitions to secure a sustainable future.

The report indicates that markets are still highly responsive to unforeseen developments on both the supply and demand sides.

Since the beginning of the global energy crisis, the significance of LNG in the global gas trade has expanded, and it is expected to play a vital role in sustaining the supply-demand equilibrium worldwide.

Ongoing constraints in the Panama Canal and the Red Sea are affecting shipping routes, yet they have not resulted in a decrease in LNG supply to date.

Nevertheless, these challenges underscore the potential vulnerabilities within the LNG trade in an increasingly interconnected global gas market.

Looking ahead to 2025, LNG supply growth is anticipated to accelerate to nearly 6 percent as several major LNG projects are expected to commence operations, particularly in the latter half of the year.

North America is projected to contribute the majority of this new capacity, with additional volumes from Africa and Asia also playing a role.

A significant uncertainty looming over the 2024-25 Northern Hemisphere winter is the transit of Russian gas through Ukraine, as existing contracts are set to expire at the end of 2024.

This situation could result in the cessation of all piped gas deliveries from Russia to Europe via Ukraine, necessitating increased LNG imports to Europe in 2025 and leading to a tighter global gas balance compared to a scenario where transit through Ukraine continues.

To tackle some of these issues, the IEA suggested enhancing flexibility mechanisms throughout the gas and LNG value chains by increasing the liquidity of the global LNG market, integrating the Ukrainian gas storage system into the worldwide gas market, and exploring potential frameworks for voluntary gas reserve mechanisms.

This year's Global Gas Security Review features a dedicated section on the integration of low-emissions gases within the transport sector. This analysis is part of the IEA’s Low-Emissions Gases Work Programme.

In addition to analyzing global gas markets, the IEA collaborates with governments globally to bolster supply security.

Since its inception in October 2022, the International Energy Agency’s Task Force on Gas and Clean Fuels Market Monitoring and Supply and Security has delivered essential market updates and facilitated data and information sharing among its members.

The Task Force has closely collaborated with the Japanese government in preparation for the 13th LNG Producer-Consumer Conference, which was co-organized by the International Energy Agency and Japan’s Ministry of Economy, Trade and Industry.