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Released October 10, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Global natural gas consumption is experiencing "pronounced growth" in 2024, and is expected to set new records this year and next, the International Energy Agency said in its just-released Global Gas Security Review 2024. For the first three quarters of 2024, gas demand rose 2.8% over year-earlier levels. That rate of growth far outstrips the previous 2% average for the first three quarters of the year that was recorded between 2010 and 2020.
The energy agency projected worldwide demand for gas for the full year will exceed 2.5%, and 2.3% growth is forecast for 2025. Fast-growing economies in Asia, mainly China and India, will account for about 45% of the expected growth in 2024; next year, over 50% of incremental gas demand will come from Asian nations, again, principally China and India, IEA said.
Demand growth in 2024 will add slightly over 100 billion cubic meters of gas (Bcm), pushing worldwide usage to a new all-time high of over 4,200 Bcm, or about 148.3 trillion cubic feet (Tcf). The IEA projected next year's growth at slightly under 100 Bcm, or about 3.5 Tcf.
Click on the image at right to see a breakdown from the IEA showing the year-on-year change in key piped natural gas trade and global LNG supply over the 2019-2024 period.
In its report, released October 3, the IEA warned that global supplies of gas "remains fundamentally tight," and thus subject to disruption. Supply is tight largely because global supplies of liquefied natural gas (LNG) grew only 2% through the first three quarters of this year. That increase works out to about 7 Bcm or about 247 Billion cubic feet (Bcf). That rate of growth is far behind the 8% annual growth rate experienced between 2016 and 2020, during the most recent LNG buildout.
The gas report blamed project delays together with feedgas supply issues at certain legacy producers (including in Angola, Egypt, Trinidad and Tobago). But in the fourth quarter, the report added, two new export terminals are scheduled to come online, which would improve the gas supply. The terminals are Plaquemines in the U.S. and the Tortue floating liquefied natural gas (FLNG) terminal off the coast of West Africa.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Plant and Project databases can read profiles on the Plaquemines and Tortue terminals, in addition to information on the Plaquemines and Tortue projects.
Full-year 2024 LNG supply is expected to grow about 2%, or about 10 Bcm. That sum is about 353 Bcf. It would be the slowest rate of annual growth since the COVID pandemic began in 2020.
The Global Gas Security Report 2024 projected that LNG supply growth is expected to grow nearly 6%, or about 30 bcm, next year as several LNG export terminals in North America are expected to begin operating. The report said about 16 Bcm, or approximately 565 Bcf, of that new capacity will come from U.S. export terminals. New terminals in Africa and Asia also are expected to begin operating in 2025. The report said Russia's Arctic LNG 2 terminal was not considered as a new source of firm LNG supply given the sanctions against Russia stemming from its 2022 invasion of Ukraine.
Industrial demand for gas accounted for about half of the world's growing appetite for gas in 2024. Once again, fast-growing Asian economies will lead the charge. Europe's recovering industrial demand is expected to contribute to global demand growth, though industrial demand there remains well below its pre-2022 level.
Click on the image at right to see an IEA chart showing which global regions are expected to drive global growth in demand for gas for full-year 2024.
A longer-term perspective, since 2019 and projected through 2025, shows which global regions experienced growth or reduction in annual gas demand. Asia's sharply rising demand for 2023-2025 is notable.
Click on the image at right to see a breakdown from the EIA on which global regions grew or shrunk their annual demand for gas between 2019-2023, with projections for 2024 and 2025.
Quarterly demand for gas in North America slowed sharply through the first three quarters of 2024 compared to the comparable period in 2022. For the first nine months of 2024, demand grew by about 1.5%, or about 11 Bcm, the report said. Most of that demand growth came from the U.S. electric power sector, as gas continued to displace coal in electric generation.
Click on the image at right to see an IEA chart showing quarterly gas demand in North America since 2021.
Turning to U.S. gas production, the report shows how low prices in 2024 led to production cutbacks: "The effects of early 2024's precipitous fall in U.S. spot natural gas prices on production were swift and persistent. Dry natural gas production responded by an equally marked decline, falling to its lowest monthly level in nearly 18 months by May 2024 as some upstream players cut back on drilling activity and operations. Prices subsequently whiplashed in the second quarter, gaining more than $1 per million British thermal units (MMBtu) from their March low of $1.55/MMBtuu to their June peak of $2.64/MMBtu as restrained production dynamics met with early and strong seasonal power demand."
Production in the Appalachian and Haynesville fell sharply throughout the spring and summer of 2024, though Appalachian production recovered by the end of the third quarter.
Click on the icon at right to see U.S. gas production on a monthly basis.
Third-quarter U.S. dry natural gas production dynamics "continued to highlight the gradual rebalancing of the world's largest gas market in 2024, reflected in steep price movements and a slowing year-over-year decline in supply," the IEA report continued. "As upstream activity continues to respond to evolving market fundamentals, year-over-year movements are likely to remain volatile in the short term, but underlying trends point to production recovery in 2025."
The energy agency sees U.S. gas production, and the global gas market more generally, as being in a "rebalancing" phase, as supply and demand come closer to being in equilibrium after the disruption created by Russia's 2022 invasion of Ukraine. A market in equilibrium should have less price volatility than an unbalanced market. But as wars in the Middle East and Europe rage on, the IEA reminded readers that equilibrium could be disrupted by any number of events. Global natural gas markets are in a "fragile balance," it said, still "sensitive" to disruption after the 2022 gas market supply shock."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The energy agency projected worldwide demand for gas for the full year will exceed 2.5%, and 2.3% growth is forecast for 2025. Fast-growing economies in Asia, mainly China and India, will account for about 45% of the expected growth in 2024; next year, over 50% of incremental gas demand will come from Asian nations, again, principally China and India, IEA said.
Demand growth in 2024 will add slightly over 100 billion cubic meters of gas (Bcm), pushing worldwide usage to a new all-time high of over 4,200 Bcm, or about 148.3 trillion cubic feet (Tcf). The IEA projected next year's growth at slightly under 100 Bcm, or about 3.5 Tcf.
In its report, released October 3, the IEA warned that global supplies of gas "remains fundamentally tight," and thus subject to disruption. Supply is tight largely because global supplies of liquefied natural gas (LNG) grew only 2% through the first three quarters of this year. That increase works out to about 7 Bcm or about 247 Billion cubic feet (Bcf). That rate of growth is far behind the 8% annual growth rate experienced between 2016 and 2020, during the most recent LNG buildout.
The gas report blamed project delays together with feedgas supply issues at certain legacy producers (including in Angola, Egypt, Trinidad and Tobago). But in the fourth quarter, the report added, two new export terminals are scheduled to come online, which would improve the gas supply. The terminals are Plaquemines in the U.S. and the Tortue floating liquefied natural gas (FLNG) terminal off the coast of West Africa.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Plant and Project databases can read profiles on the Plaquemines and Tortue terminals, in addition to information on the Plaquemines and Tortue projects.
Full-year 2024 LNG supply is expected to grow about 2%, or about 10 Bcm. That sum is about 353 Bcf. It would be the slowest rate of annual growth since the COVID pandemic began in 2020.
The Global Gas Security Report 2024 projected that LNG supply growth is expected to grow nearly 6%, or about 30 bcm, next year as several LNG export terminals in North America are expected to begin operating. The report said about 16 Bcm, or approximately 565 Bcf, of that new capacity will come from U.S. export terminals. New terminals in Africa and Asia also are expected to begin operating in 2025. The report said Russia's Arctic LNG 2 terminal was not considered as a new source of firm LNG supply given the sanctions against Russia stemming from its 2022 invasion of Ukraine.
Industrial demand for gas accounted for about half of the world's growing appetite for gas in 2024. Once again, fast-growing Asian economies will lead the charge. Europe's recovering industrial demand is expected to contribute to global demand growth, though industrial demand there remains well below its pre-2022 level.
A longer-term perspective, since 2019 and projected through 2025, shows which global regions experienced growth or reduction in annual gas demand. Asia's sharply rising demand for 2023-2025 is notable.
Quarterly demand for gas in North America slowed sharply through the first three quarters of 2024 compared to the comparable period in 2022. For the first nine months of 2024, demand grew by about 1.5%, or about 11 Bcm, the report said. Most of that demand growth came from the U.S. electric power sector, as gas continued to displace coal in electric generation.
Turning to U.S. gas production, the report shows how low prices in 2024 led to production cutbacks: "The effects of early 2024's precipitous fall in U.S. spot natural gas prices on production were swift and persistent. Dry natural gas production responded by an equally marked decline, falling to its lowest monthly level in nearly 18 months by May 2024 as some upstream players cut back on drilling activity and operations. Prices subsequently whiplashed in the second quarter, gaining more than $1 per million British thermal units (MMBtu) from their March low of $1.55/MMBtuu to their June peak of $2.64/MMBtu as restrained production dynamics met with early and strong seasonal power demand."
Production in the Appalachian and Haynesville fell sharply throughout the spring and summer of 2024, though Appalachian production recovered by the end of the third quarter.
Third-quarter U.S. dry natural gas production dynamics "continued to highlight the gradual rebalancing of the world's largest gas market in 2024, reflected in steep price movements and a slowing year-over-year decline in supply," the IEA report continued. "As upstream activity continues to respond to evolving market fundamentals, year-over-year movements are likely to remain volatile in the short term, but underlying trends point to production recovery in 2025."
The energy agency sees U.S. gas production, and the global gas market more generally, as being in a "rebalancing" phase, as supply and demand come closer to being in equilibrium after the disruption created by Russia's 2022 invasion of Ukraine. A market in equilibrium should have less price volatility than an unbalanced market. But as wars in the Middle East and Europe rage on, the IEA reminded readers that equilibrium could be disrupted by any number of events. Global natural gas markets are in a "fragile balance," it said, still "sensitive" to disruption after the 2022 gas market supply shock."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
