Medium-Term Gas Report 2023

Including the Gas Market Report, Q4-2023 INTERNATIONAL ENERGY AGENCY The IEA examines the full spectrum of energyissues including oil, gas and coal supply anddemand, renewable energy technologies,electricity markets, energy efficiency, access toenergy, demand side management and muchmore. Through its work, the IEA advocatespolicies that will enhance the reliability,affordability and sustainability of energy in its 31member countries,13association countries andbeyond. SpainSwedenSwitzerlandRepublic of TürkiyeUnited KingdomUnited States IEA member countries: AustraliaAustriaBelgiumCanadaCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNew ZealandNorwayPolandPortugalSlovak Republic The European Commissionalso participates in the workof the IEA This publication and any map included herein arewithout prejudice to the status of or sovereigntyover any territory, to the delimitation ofinternational frontiers and boundaries and to thename of any territory, city or area. IEA association countries: ArgentinaBrazilChinaEgyptIndiaIndonesiaKenyaMoroccoSenegalSingaporeSouth AfricaThailandUkraine Abstract The energy crisis triggered by Russia’s invasion of Ukraine markeda turning point for global natural gas markets. Growth in global gasdemand is set to slow down significantly over the medium term(2022-2026). This follows a decade of strong expansion in whichgas contributed around 40% of the growth in primary energy supplyworldwide. over the medium term as a result of the rapid deployment ofrenewables and improved energy efficiency standards. Demandgrowth is almost entirely concentrated in fast-growing Asianmarkets and gas-rich countries in Africa and the Middle East.Strong LNG supply at the end of the forecast period is set to easemarket fundamentals and unlock price sensitive demand inemerging markets in Asia. While market tensions eased in the first three quarters of 2023, gassupplies remain relatively tight and prices continue to experiencestrong volatility, reflecting a fragile balance in global gas markets.High storage levels in the European Union allow for cautiousoptimism ahead of the 2023-24 heating season. However, a rangeof risk factors could easily renew market tensions. NorthwestEurope will have no access this winter to two sources that used tobe the backbone of its gas supply: Russian piped gas and theGroningen field in the Netherlands. The International Energy Agency’s (IEA)Gas 2023Medium-TermMarket Reportprovides an outlook on the development of globalgas demand and supply until 2026. This year’s report includes aspecial spotlight on Africa and the potential for gas to contribute toregional economic growth and improved energy access. Beyond themedium-term outlook, the report provides a thorough review ofrecent market developments ahead of the 2023-24 winter season inthe Northern Hemisphere. As part of the IEA’s Low-Emission GasesWork Programme, this year’s report includes a section on themedium-term outlook for biomethane, low-emissions hydrogen ande-methane. In addition, a special focus is provided on thedevelopments in emerging markets. The gas supply shock of 2022 reinforced the structural trends thatare weighing on the longer-term prospects for global gas demand.Overall gas consumption across the mature markets of Asia Pacific,Europe and North America peaked in 2021 and is set to decline Table of contents Executive summary and key assumptions................................................3Gas market update.....................................................................................15Medium-term market outlook....................................................................37Spotlight on Africa.....................................................................................75Medium-term outlook for low-emission gases.......................................87Annex .........................................................................................................104 Executive summary and key assumptions Beyond the Golden Age of Gas: Slower growth, higher volatility and greater uncertainty The period between 2011 and 2021 marked the Golden Decadeof Gas:During this period, natural gas consumption worldwideexpanded by close to 25% and accounted for 40% of the growth inprimary energy supply worldwide – more than any other fuel. Thisrapid growth was underpinned by a number of factors including theavailability of relatively cheap and cost-competitive gas supply,clean air policies in the fast growing markets of the Asia Pacificregion, and the scaling up of shale production in the United States. Asian spot LNG prices averaged 70% and 60% below their 2022levels, respectively. However, they have remained well above theirhistorical averages. The supply side remained tightin the first three quarters of2023, as the additional LNG supply (+11 bcm) was insufficient tooffset the steep decline in Russian piped g