Global LNG demand continued to expand last year amid a broader recovery in global natural gas consumption following the 2022 energy crisis caused by Russia’s invasion of Ukraine, according to Cedigaz.
The international natural gas data service said in its annual “First Estimates” study that global liquefied natural gas transactions accounted for 54% of all the world’s gas trade, up from 51% in 2022 and 46% in 2021. The ongoing expansion of the LNG market came as international pipeline trade dropped 8.6% year-over-year as volumes continued to be “heavily affected” by the drop in Russian pipeline flows to Europe, Cedigaz said.
Overall, natural gas consumption recovered last year following a 1.5% decline in 2022 amid the supply crisis when Russia cut off exports to Europe. Natural gas consumption increased modestly by 0.6%, or by about 23 billion cubic meters (Bcm).
However, the rebound was not enough to offset losses in 2022 and global gas consumption remained below pre-crisis levels. The slowdown in natural gas consumption worldwide comes as about 150 million tons of new LNG capacity is under construction.
Demand was limited by a decline in gas-fired power generation caused by more renewables and stronger nuclear generation in places like France, Japan and South Korea. Mild weather conditions also kept demand in check along with economic difficulties in Europe, energy efficiency there, and a modest post-pandemic recovery in China, according to Cedigaz.
Europe was hit hardest by the energy crisis and natural gas consumption is at its lowest level since 1995. After European gas prices spiked in 2022, they have fallen closer to historical levels, but remain highly volatile.
European gas consumption fell by 7.4% to 444 Bcm last year. However, the continent continued to take in more LNG. The super-chilled fuel accounted for 37% of Europe’s gas supply, from 32% in 2022.
The sharp decline on the continent, Cedigaz said, was offset by growth in the Middle East and Asia-Oceania. China’s domestic gas demand rebounded by 8% year-over-year to 386 Bcm in 2023.
