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The pace at which demand for natural gas is set to grow over the coming years is set to slow, according to the IEA”s new medium-term forecast published on Tuesday.
Global gas demand is set for 1.6% growth per year between 2022 and 2026, according to the IEA”s new Gas 2023 Medium-Term Market Report—this is down from the 2.5% per year seen between 2017 and 2021. The IEA claims the reason for the slowdown is the 2022 global energy crisis following Russia’s invasion of Ukraine, which has “ushered in a different era for global gas markets after their decade of strong growth between 2011 and 2021.
Gas markets in Asia Pacific, Europe, and North America peaked in 2021 according to the IEA’s report, and is now set to fall 1% each year through 2026. “An accelerated rollout of renewables and improved energy efficiency are among the key drivers behind the downward trend for natural gas in these markets,” the IEA said, adding that in Europe specifically, the drop in future natural gas demand growth is attributed in part to Russia’s invasion of Ukraine, which forced Europe to come up with alternate solutions for its energy needs.
According to the IEA, decreasing demand in those market markets, which accounts for about half of the world’s gas consumption, means that other fast-growing Asian, Middle East, and African markets will see most of the natural gas demand growth—with China accounting for nearly half of all of the demand growth for natural gas between 2022 and 2026.
“After their heyday between 2011 and 2021, the world’s gas markets have entered a new and more uncertain period that is likely to be characterised by slower growth and higher volatility – and could lead to a peak in global demand by the end of this decade,” IEA Director of Energy Markets and Security Keisuke Sadamori said in a Tuesday press release. “Different trends are playing out across different regions, with demand declining in mature markets but continuing to grow in emerging and developing economies. We expect a substantial increase in new LNG capacity coming online in the years ahead, which should ease some of the tightness and security of supply concerns that markets have been experiencing since Russia started withholding supplies in 2021.”
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.