Energy security and sustainability mean a restructuring of global gas supply and a reconfiguration of international gas flows

CEDIGAZ, the International Gas Association, has just released its « Medium and Long Term Gas and LNG Outlook 2023 », which provides projections on natural gas and low-carbon gases markets to 2050.

CEDIGAZ Reference Scenario assumes a strong acceleration of the energy transition towards a low-carbon economy, incorporating specific government targets and CO2 emissions reduction commitments, corresponding to a global warming of 2.1 °C by 2100. The evolution of the world energy mix is driven by strong energy efficiency improvements, a fast expansion of clean electrification and low-carbon technologies. CEDIGAZ 2.1 °C Scenario highlights that natural gas and low-carbon gases will play an important role in a context of the decarbonization of the world energy system. Natural gas will be gradually supplanted by low-carbon gases in OECD markets, whereas in non-OECD markets, especially in Asia, both natural gas and low-carbon gases will grow significantly in the long term. Additional investments in new international gas and LNG projects are required to meet future global demand. Achieving carbon neutrality, energy security and sustainability will mean profound changes in global gas dynamics and a rebalancing of global gas flows towards Asia. Decarbonization efforts imply the reduction of all GHG, including methane emissions, along the whole international supply chains. The expansion of low-carbon gases, especially hydrogen, requires a supportive and appropriate political and regulatory framework as well as an adaptation of natural gas infrastructure to a future low-carbon economy.

Quarterly report – Q4 2022 – International natural gas prices

In the fourth quarter of 2022, average European and Asian prices fell back compared to the previous year. European prices have been extremely volatile in the short term, with periods of dramatic, weather-driven declines. The TTF price has fallen over the last four weeks to pre-war levels in Ukraine, a sign of unexpected easing in the European market as the Russian gas crisis intensifies. The drop in gas consumption, due to unusually mild weather and the decline in industrial activity, and the continued strong growth in LNG imports explain the very high level of European gas stocks, which reaches 930 TWh at the beginning of 2023. This situation has pushed down spot and forward prices and eased fears of tensions in the coming months.


Key UGS metrics in the world remained virtually unchanged in 2021

Seven new storage facilities were commissioned, six of which were in China and one in Sharjah. These new capacities were largely offset by declines in the main storage markets. Overall, the global number of storage facilities, working gas capacity and peak withdrawal rates remained virtually unchanged year-on-year.

… but interest in UGS is growing, as evidenced by a growing pipeline of new projects and expansions totalling 133 bcm of working capacity

While the UGS market remains highly concentrated, with 5 countries (United States, Russia, Ukraine, Canada and Germany) accounting for almost 70% of global storage capacities, there is a clear shift of storage activity towards new, fast growing gas markets, China and the Middle East notably.