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Global Biomethane Market – 2026 Assessment: Towards a Global Commodity Market Author: Sylvie Cornot-Gandolphe Publisher: CEDIGAZ Publication date: July 2026 Format: PDF, 131 pages The report covers global and regional production data for 2024, preliminary estimates for 2025 and market and regulatory developments through 2025 and early 2026. It is accompanied by a database covering biomethane production, upgrading facilities and capacity in 41 countries from 2010 to 2024.

Recent trends in hydrogen investments have shown that the development of low-emission hydrogen is faced with major challenges. In contrast to mature technologies of the energy transition, investments in emerging technologies, including hydrogen, have not grown as fast as expected. The European hydrogen industry has experienced a turbulent 2025, with project delays and cancellations dominating the headlines. The proportion of projects at the FID stage remains very low and the global clean hydrogen market is still in its infancy. Global low-emission hydrogen demand in 2025 amounted to less than 1 Mt, or only around 1% of global hydrogen demand. New hydrogen investment has been very selective, focusing on demand-secured and government-backed projects. The most advanced projects mainly occur in existing industrial hubs rather than in new applications. Policy uncertainty and high costs were the most frequent reasons announced by investors to justify projects’ cancellations. But the real hurdle for hydrogen investment seems to be the lack of offtakers and insufficient demand-side incentives. Regarding policy targets, progress was made on the demand side, but this remains low compared to the supply side… The report tracks recent policy and market developments of the global low-emission hydrogen sector. It also focuses on project development and medium-term demand and supply prospects.

Underground Gas Storage in the World – 2025 Status provides a comprehensive assessment of the global storage market, revealing that working gas capacity reached a record 445 billion cubic meters (bcm) at the end of 2024, the fastest growth rate observed since 2015,. Driven by the critical need for energy security and supply flexibility following the 2022-23 energy crisis, the sector is witnessing a massive build-out with 80 projects currently under construction that will add 64 bcm of new capacity,. This report analyzes how UGS has evolved into a strategic asset essential for mitigating price volatility, optimizing LNG trade, and supporting the energy transition, with global capacity projected to exceed 500 bcm by 2031.

The report offers in-depth regional insights, detailing Europe’s high utilization rates where storage covered 24% of winter demand, alongside the EU's extension of storage regulations through 2027. It examines the urgent need for flexible storage in the United States to support booming LNG exports and the rapid expansion in China, where capacity has more than doubled in just four years,. With coverage of emerging markets in the Middle East and South America, and data on 195 projects under construction, planned, or potential, this publication is an essential tool for understanding the shifting dynamics of the global gas market.

CEDIGAZ’s annual report "Global Biomethane Market – 2025 Assessment" is now available, providing a comprehensive analysis of a rapidly evolving sector. The report details significant growth, with global renewable natural gas (RNG) production reaching 9.25 bcm in 2023 and forecasted to approach 12 bcm in 2024. Europe and North America remain the leading regions, while emerging markets such as Brazil, China, and India show promising momentum.

In an era marked by fluctuating energy markets and geopolitical tensions, the importance of underground gas storage (UGS) has never been more pronounced. As the backbone of global gas security, UGS facilities play a critical role in balancing supply and demand, mitigating price volatility, and ensuring a stable energy supply during peak consumption periods. The recent global gas crisis has thrust UGS into the spotlight, prompting accelerated growth and renewed investment in this vital infrastructure.

By the end of 2023, the global working gas capacity of UGS reached 437 billion cubic meters (bcm), a 2% year-on-year increase—the largest since 2015. This surge is primarily due to significant capacity expansions in China, with additional contributions from Europe, Kazakhstan, and Canada. The number of operational UGS facilities globally stood at 681, with China commissioning five new facilities and Saudi Arabia adding its first. The global peak withdrawal rate also increased by 1.6% to 7,516 million cubic meters per day (mcm/d).

CEDIGAZ has just published its 2024 annual report on the global biomethane market which focuses on recent trends in global and regional biomethane markets in 2023. According to CEDIGAZ, global biomethane production expanded to 7.7 billion cubic metres (bcm) in 2022, a growth of 20% compared to 2021, driven by Europe and North America. It is estimated at 9.5 bcm in 2023, an increase of 23%. Driven by strong structural policy and market drivers, the biomethane market is poised for a huge expansion over this decade and beyond. The targets announced by regional and national governments around the world exceed 100 bcm/y by 2030. Reaching this ambitious level requires the adoption of the right policy and regulatory framework, an acceleration of support, and faster permitting, which many governments have put in place in 2023.

Amidst the gas supply crisis aftermath in Europe and with global spot gas prices remaining in the double-digit range for the past years, the EastMed natural gas sector has been attracting growing attention from major producers, investors, and potential gas buyers. With vast reserves amounting to trillions of cubic meters, the EastMed countries hold the potential to bolster their own energy security and expand global gas export capabilities alleviating pressure in the tight gas market.

The latest CEDIGAZ report “East Mediterranean Natural Gas Markets-2023: in Search of Development Pathways” authored by Alexander Kislov and Gina Cohen, presents a thorough analysis of the development of the EastMed natural gas province, examining the most recent advancements in Egypt, Israel, Türkiye, Cyprus, Jordan, and Lebanon, and perspectives of new large-scale gas exports projects.  While the future of the EastMed natural gas province is contingent on various factors, the detailed information and complete data presented in the report provide an opportunity to outline the potential outcomes and contours of the EastMed puzzle.

The CEDIGAZ 2023 report highlights significant shifts in the global gas market, with a 1.3% increase in Underground Gas Storage (UGS) capacity, driven by the global gas crisis. Major contributors include China and Europe, with a focus on expanding storage in rapidly developing markets like the Middle East. The report notes a 20% growth in UGS projects in 2022, reflecting the sector's growing importance in natural gas supply security.

The global energy crisis, especially due to Russia's invasion of Ukraine, has reshaped the gas market, leading to more flexible and price-sensitive LNG trade. Governments globally are focusing more on natural gas security, introducing stricter storage regulations and strategic LNG reserves. Japan proposed an international cooperation framework to enhance LNG security.

Europe's RePowerEU plan, a response to Russian aggression, seeks to lessen reliance on Russian fossil fuels, mandating higher gas storage levels. In 2022, storage exceeded EU regulations, reaching 95% by November. Other regions, including Ukraine, the US, China, and the Middle East, are also advancing in UGS, adapting to their specific market needs.

An in-depth analysis of recent developments and prospects in Europe-Russia gas relations

With quality information from Russia getting increasingly scarce, the Russian natural gas market has become more and more of a black box. In its latest report “Russian gas in Europe: Yesterday, Today, Tomorrow. An in-depth analysis of recent developments and prospects in Europe-Russia gas relations”, CEDIGAZ tracks the unprecedented changes between glorious “yesterday” (2018-2021), gloomy “today” (2022-Q1 2023) of Russian gas (both pipeline and LNG) in Europe, including the evolution of the European countries’ dependence on Russian gas, using data still available. The report also discusses possible futures for Russian gas in Europe after 2023 (“tomorrow”) – given new inputs, including selected pipeline export routes limitations, the Turkish natural gas hub initiative, and Russian LNG project developments.

Russian gas in Europe: Yesterday, Today, Tomorrow - An in-depth analysis of recent developments and prospects in Europe-Russia gas relations. Author: Alexander Kislov – PDF – 55 pages.

The unaccounted-for gas (UFG) in gas network utilities, particularly methane emissions, is a pressing environmental and financial concern. With methane being a potent greenhouse gas, efforts to reduce emissions have gained momentum, including the Global Methane Pledge signed by 105 countries. The CEDIGAZ report reveals that UFG contributes approximately 70 billion cubic meters of methane release annually, equivalent to 1.75% of global natural gas demand. This represents a significant impact on global warming and financial losses for utilities. The report explores the sources of UFG and presents solutions, emphasizing the need for accurate measurement, active monitoring, and effective regulations. It underscores the potential for methane emissions reduction in areas like gas flaring and venting and highlights cost-effective strategies to address these issues.

Pricing: €999 for CEDIGAZ members – €1.999 for non-members (Orders made before 31st August 2023 will receive a 20% discount)

The global biomethane or renewable natural gas industry grew by 23% in 2022 and has potential to surpass 100 billion cubic meters by 2030 with appropriate policies. Energy security concerns, climate change urgency, and methane emission reduction focus have led to new incentivizing policies stimulating investment in the RNG sector. Biomethane is being adopted across sectors worldwide to decarbonize and respond to ESG concerns, and transportation represented half of global demand growth in 2021. The sector has seen unprecedented investment, with European energy majors and financial investors creating dedicated biomethane business units, highlighting biomethane's attributes and exponential growth.

This annual report assesses underground gas storage (UGS) in the world at the end of 2021. It is based and complemented by a comprehensive online database, including detailed statistical information on current and future capacities for the 667 UGS facilities in operation in the world and the 166 UGS projects under construction, planned or potential. Altogether, the database includes 51 countries. The database also includes information on closed, mothballed and inactive UGS facilities, as well as the expansion stages of UGS facilities, when this information is available (see Methodology). The database is available to CEDIGAZ’s members under the infrastructure section of CEDIGAZ website.

This report includes two parts. The first one gives an assessment of UGS capacity at the end of 2021 and new capacity under construction, planned and potential. The second part reviews major trends in UGS in selected key markets: Europe, Ukraine, Russia, the United States, and China. In view of the crucial role of gas storage for security of supply, this review includes an analysis of gas stocks in 2021/22 and winter 2022/23 preparedness. In addition, recent UGS construction activity is reviewed in Central and South America and the Middle East.

This report is based on information available at the beginning of November 2022.

This report shows how the Netherlands is advancing its journey towards becoming the foremost hydrogen hub in North-Western Europe (NWE). It contains two types of information: strategic information on the Dutch hydrogen vision and policy, and detailed information on what is going on in the field. Information is updated to July 2022 when Shell took final investment decision (FID) on Holland Hydrogen I with an initial capacity of 200 MW (picture of the cover page). This is an important milestone. Holland Hydrogen I is the first large-scale electrolyzer investment in the Netherlands. It will be Europe's largest renewable hydrogen plant when it starts operation in 2024.

The United States of America enters the global clean hydrogen race

The International Association Cedigaz has just released its hydrogen report: “The United States of America enters the global clean hydrogen race”, which assesses market developments, policies and prospects of the hydrogen industry in the United States. The report also provides data on US clean hydrogen production projects.

A once-in-a lifetime growth over this decade Despite the pandemic and its impact on supply chains and fuel demand in the transportation sector, the RNG sector has been resilient. Global RNG production was up 20% in 2020 to 5 billion cubic metres (bcm). It has more than doubled since 2015. There were 1,161 biogas upgrading facilities operating in the world at the end of 2020, with a production capacity of 800,000 Nm³/h (or 6.7 bcm/y), ensuring healthy growth going forward. The market remains dominated by Europe, but the United States, which became the world’s leading producer in 2019, ahead of Germany, continues to register significant growth. In other regions, biomethane production is still limited but is taking off in Brazil, Canada, China and India.

This report gathers comprehensive data on one hundred of the world’s strategic high-pressure gas transmission pipelines in seven different global regions (North America, Central & South America, Europe, Africa, the Middle East, Russia & CIS, and Asia Oceania). Data collected on the pipelines includes:

• Pipeline ownership – Project structure, shareholders, and their respective shares,
• Technical characteristics – Including pipeline length, diameter, wall thickness and grade of steel used and the pipeline route.
• Pipeline route – Including a bespoke map for each pipeline detailing the route and lengths
• Pipeline construction data – Including CAPEX data relating to the original cost of the pipeline, as well as the cost of subsequent upgrades together with details of the main EPC construction contractors used.

The report comes with an Excel spreadsheet database.

This annual report assesses underground gas storage (UGS) in the world at the end of 2020. It is based and complemented by a comprehensive online database, including detailed statistical information on current and future capacities for the 661 UGS facilities in operation in the world and the 91 new projects under construction, planned or potential. Altogether, the database includes 51 countries. The database also includes information on closed, mothballed and inactive UGS facilities, as well as the expansion stages of UGS facilities, when this information is available (see Methodology). The database is available to CEDIGAZ’s members under the infrastructure section of CEDIGAZ website.

This report includes three parts. Due to the exceptional events on the gas (and energy) scene in 2021, this year’s report includes an analysis of the main causes of the elevated European and North Asian spot gas prices (Part 1). Then, the report gives an assessment of UGS key metrics in 2020 and their evolution compared to 2019. The third part reviews major trends in UGS in selected key markets: Europe, Ukraine, Russia, USA, and China. In addition, recent UGS construction activity is reviewed in South and Central America and the Middle East.

AUSTRALIA AT THE FOREFRONT OF DEVELOPING A HUGE HYDROGEN EXPORT INDUSTRY

The Australian government released the National Hydrogen Strategy (the Strategy) in November 2019 and has continued to outline its support for hydrogen through the First Low-Emissions Technology Statement, released in September 2020. The government has stated its commitment to reducing Australia’s emissions through technology investment, rather than through carbon pricing, with the Technology Investment Roadmap a core element of its long-term emissions reduction strategy.

This report updates the 2019 CEDIGAZ’s comprehensive study on global biomethane (also known as renewable natural gas, RNG). It focuses on biogas upgrading and looks at key developments in the marketplace, policies, and major markets. Global RNG production reached 4 bcm in 2019, a doubling since 2015. There are now close to 1,000 biogas upgrading plants operating in the world. The market remains dominated by Europe (2.4 bcm), but the United States is catching up rapidly and, in fact, has become the world’s leading producer (1.1 bcm), ahead of Germany. In other regions, biomethane production is still limited (0.4 bcm collectively), but the market is taking off in Brazil, Canada, China and India. Recent years have seen significant shifts in terms of key sources of demand and market drivers. Hard-to-abate sectors (road transportation, shipping, heat) are becoming the focus of support policies, while cost reduction in wind and solar power generation makes the use of biomethane in the power sector less attractive, except for providing flexibility. RNG is more and more recognized for its key role in decarbonizing and bringing sustainability in the agriculture and waste sectors and is increasingly included in climate policies targeting these sectors.

This report updates the 2019 CEDIGAZ’s comprehensive study on global biomethane (also known as renewable natural gas, RNG). It focuses on biogas upgrading and looks at key developments in the marketplace, policies, and major markets. Global RNG production reached 4 bcm in 2019, a doubling since 2015. There are now close to 1,000 biogas upgrading plants operating in the world. The market remains dominated by Europe (2.4 bcm), but the United States is catching up rapidly and, in fact, has become the world’s leading producer (1.1 bcm), ahead of Germany. In other regions, biomethane production is still limited (0.4 bcm collectively), but the market is taking off in Brazil, Canada, China and India. Recent years have seen significant shifts in terms of key sources of demand and market drivers. Hard-to-abate sectors (road transportation, shipping, heat) are becoming the focus of support policies, while cost reduction in wind and solar power generation makes the use of biomethane in the power sector less attractive, except for providing flexibility. RNG is more and more recognized for its key role in decarbonizing and bringing sustainability in the agriculture and waste sectors and is increasingly included in climate policies targeting these sectors.

The dramatic developments in gas markets in 2019-2020, with an acute oversupply situation due to the negative impact of the COVID-19 pandemic on demand and compounded by the massive increase of LNG supply from the US has stressed the fundamental importance of European Underground Gas Storage, assisted by Ukrainian UGS, to alleviate the imbalance of global gas markets. While until recently, UGS has mainly been developed in North America, Europe and the C.I.S., China is now on the fast lane for storage development. Russia, although the second global UGS capacity holder is still developing its storage infrastructure to serve both domestic and export markets.

This new report by CEDIGAZ provides an insightful review of storage activity in 4 key markets in 2020 and highlights the crucial role of UGS in balancing the global gas market as well as increasing security of gas supply in the context of rising geopolitical risks and trade tensions. The report also includes data on operating, under construction and planned facilities detailed by country.

The International Association Cedigaz has just released its report “GERMANY National Hydrogen Strategy: Germany aims for leadership in green hydrogen technologies”, which assesses developments and prospects for green hydrogen in Germany and some potential supplying countries.

ON THE CUSP OF A MAJOR BREAKOUT

Looking ahead, the Chinese hydrogen energy sector is on the cusp of a major breakout. In the context of the 14^th Five-Year Plan (2021-2025), the central government is planning a new development path of the sector. The development of hydrogen energy is of great significance for China to achieve its energy transition, promote new industrial chains, and ensure the country’s energy independence. Draft policy documents consider the recognition of hydrogen as an energy source, the establishment of a national strategic plan and roadmap for the sector, and the set-up of rules, codes and standards for hydrogen energy.

The Hydrogen Society is gradually coming to the fore Japan has been a pioneer in hydrogen and fuel cell technologies and has the world’s most ambitious vision. Japan’s ambition is to lead the way towards decarbonisation in the world by providing hydrogen as a new energy option. In the context of the nation’s unique energy challenges, the government wants to turn Japan into a hydrogen society to solve the issues of energy security and global warming. Japan’s Basic Hydrogen Strategy (2050 Vision) is the world’s first national strategy developed. It describes the future visions for the year 2050 and also serves as an action plan through the year 2030, coordinating public and private hydrogen initiatives. The main thrust of the strategy is to achieve the cost parity of hydrogen with competing fuels (after allowing for environmental externalities) by increasing economies of scale and overcoming technological barriers. The target cost is to make H2 affordable at $3/kgH₂ by 2030 and $2/kgH₂ by 2050.

The new WORLD hydrogen economy

Since 2017, governments from 18 countries have adopted national hydrogen strategies for deploying clean (low and zero carbon) hydrogen energy solutions. Leading companies around the world are proactively investing in clean hydrogen and related technologies. The transition to clean hydrogen would create a significant step-change in hydrogen production technology in terms of scale and costs, making clean hydrogen solutions more attractive not only for industry, but also in all other sectors. Clean hydrogen is an emerging market. It is a key lever for achieving deep decarbonisation, specifically in hard-to-abate sectors like transport. It can tackle various critical energy challenges, including facilitating the large-scale integration of intermittent renewables, enabling grid balancing and seasonal storage. It can also help to improve air quality and strengthen energy security. Its potential is immense and future developments depend on energy and environmental policies, cost reductions and competition with other low-carbon options.

 

The Indian gas sector is at a turning point. Strong growth is expected in gas and LNG demand driven by favourable policies, rising investment in downstream infrastructure by domestic and foreign companies and the availability of competitive LNG prices. India’s growing urgency to embrace cleaner fuels has increased the importance of natural gas in national energy policies. Together with renewables, natural gas is seen as a solution to address critical energy challenges in India. The strong government push to accelerate its penetration in the energy mix has materialised in concrete policy actions to establish key infrastructure, including the building of inter- and intra-state pipelines, LNG terminals, CGD networks and CNG/LNG refuelling stations.

The entry of big players into the downstream gas market, in partnerships with strong Indian partners, offers a key leverage to the Indian vision to realise a gas market-based economy. They can deliver competitive and affordable LNG supplies and accelerate gas infrastructure build out, thus solving two key bottlenecks on the Indian gas market. Energy majors will facilitate and accelerate gas market growth and enlarge the gas market with innovative solutions adapted to Indian conditions. A larger gas sector augurs well with Indian economy as well as for the environment and is a win-win situation for all stakeholders.

While the COVID-19 crisis has introduced an additional uncertainty to natural gas demand growth, the Indian gas market fundamentals are robust and long-term growth propects remain strong.

The demand for natural gas continued to display sustained growth in 2019 (+2.3%), to the detriment of coal. This growth is lower compared to the two previous years but in line with the historic 10-year average.

The main factor was the competitiveness of gas in a context of oversupply which encouraged switching from coal in the power  and industry sectors, chiefl y in the United States and the EU.

As a result, the share of gas in the energy mix continued to rise. Today, this share is estimated to be 23%, compared to 21% in 2010. Recent developments suggest that the power market has embraced the energy transition through a growing role of natural gas and renewables.

The US remained the largest contributor to both supply and demand growth thanks to the abundance of low-cost shale and  associated gas resources. US gas production continued to increase in 2019 at a much faster rate than consumption, thereby creating a large surplus destined for exports.

China was the second largest demand growth area again, even if the expansion of gas demand slowed to 8.6% in a context of weaker economic growth and the relaxation of Chinese policy on coal-to-gas switching.

International trade (net fl ows) expanded strongly by almost 4% only due to the growing abundance of highly competitive LNG supply which displaced pipeline gas, especially in Europe. LNG demand growth slowed in Asia, while Europe absorbed much of the surplus LNG, acting as a balancing market.

As global natural gas supply growth largely outpaced demand growth, a significant amount of natural gas was injected into storages. In a context of LNG overhang, spot prices on the Asian and European markets plunged by more than 40% compared to 2018. New pricing and trading patterns reshape the global gas market which increasingly relies on spot-priced and fl exible gas supply.

Iran has one of the largest proven natural gas reserves in the world, hosts about 17% of the world’s proven natural gas reserves. Iran is also the world’s third–largest dry natural gas producer after the United States and Russia.

This report Dr Sara Vakhshouri founder and president of SVB Energy International and  renown specialist of the Iranian energy sector provide an update of Iranian Gas Chain under US sanctions

Contents:

1. Historical background
2. Gas reserves & Exploration
3. Development & Production
4. Gas Refining & Production at Refineries
5. Natural Gas Consumption, Import & Export
6. Underground Gas Storage
7. Gas Condensate Production
8. Implication of US sanctions

• At the end 2018, there were 662 underground gas storage (UGS) facilities in operation in the world. The global working gas capacity reached 421 bcm
• North America concentrates more than two thirds of the sites and accounts for almost 40% of global working gas capacity and half of global deliverability, the top five countries (United States, Russia, Ukraine, Canada and Germany) account for 70% of the worldwide capacities
• Storage in depleted fields dominate with 79% of global working gas volumes, but storage in salt caverns now accounts for 26% of global deliverability
• In 2018, the growth in gas storage capacity contrasted with the trends observed since 2015
• At worldwide level, there are 102 identified projects at different stages of planning
• UGS development activity is dominated by China, which alone accounts for almost half of the 37 bcm of working gas capacity under construction

Following a period of low activity and weakening interest in recent years, CCUS is back into the limelight, especially in the US and in Europe, in the wake of the Paris agreement, boosted by a growing interest in hydrogen, rising carbon prices, new supporting policies and new business models.

This report provides an update on CCUS globally with a focus on Europe and the US, the two leading areas for this technology.

Contents:

1. Introduction: CCUS is back on policy makers’ agenda
2. Growing policy attention and support for CCUS
3. Global status of CCUS
4. Barriers, challenges and required policies
5. United States: Growing carbon capture & CO₂-EOR industry
6. Renewed interest and policy support in Europe
7. Conclusion

2018 has been a remarkable year for the global natural gas market. Global natural gas demand surged 4.7% to 3,850 bcm, driven by the US and China. The US was the standout performer, accounting for 45% of the global increase in both the consumption and supply of natural gas.

2018 marks the second year of strong growth of natural gas demand, after a 3.5 % rise in 2017. It also recorded the highest growth of gas demand since the post-crisis rebound of 2010.

This fast expansion was driven by the abundance of competitive gas supply, especially in the US and in Russia and by supportive energy and environmental policies, in some countries, particularly in China. Investment in transport infrastructure also contributed to bolster gas penetration in key markets.

China became the largest net importer of natural gas in the world before Japan. Chinese net imports jumped by 32% and accounted for more than 80% of the global increase in net imports, once again highlighting the crucial role of China in absorbing global gas production.

Like in 2017, the expansion of natural gas demand was part of a substantial global growth in world energy demand, driven by a robust global economy and extreme weather conditions.

Strong gas demand growth in Asia contributed to a rise in market prices in key areas and prevented the formation of a global LNG bubble.

This report provides a detailed analysis of the booming biomethane market as governments around the world increasingly recognize the many benefits of renewable natural gas.

Since 2010, world biomethane production has increased exponentially, reaching three billion cubic meters in 2017 and there will soon be more than 1,000 biomethane production plants operating in thirty-four countries, up from 720 at year-end 2017.

For many years a European phenomenon, Green Gas is Going Global.

The report contains three parts:

1. An overview of global biomethane production and markets, biogas upgrading plants, key drivers and future trends (region by region)
2. Country reviews for forty countries in Europe, North America, Asia, Central & South America and Africa
3. In-depth case studies on key developed and emerging biomethane markets, e.g. U.S., Canada, Brazil, Germany, France, China and India.

 

It complements the CEDIGAZ Global Biomethane Database

Change in IMO emissions standards from 2020 will have a huge impact on the maritime industry. This concise CEDIGAZ Executive Briefing provides insight on the following issues:

• • What are the IMO emissions standards coming into force in 2020 and where do they apply?
  • What are the possible options for ship owners?
  • What are the opportunities for the LNG market?
  • Current state of play – how is the industry planning for the 2020 regulations?

The Chinese gas market has entered a new phase of growth driven by favourable policies. A complete report on the Chinese booming gas market, this CEDIGAZ Insight special issue covers demand, production (including Shale gas and other unconventional gas productions), imports from pipelines and LNG, Chinese energy policies, infrastructure development, medium and long-term Outlook and more.

At the end 2017, there were 671 underground gas storage facilities in operation in the world. The global working gas capacity has slightly increased to 417 bcm,up 0.4% from the end of 2016.

Accelerated reforms and focused policies aimed at increasing the role of gas and renewables in the energy mix combine to improve the natural gas demand outlook of China and India

The small-scale LNG market is rapidly growing on both the supply and demand side. Forecasts of growth to 2030 of up to 100 mt are widely shared, and there is a significant chance growth could far exceed this, with some forecasts for key sectors leading to a much higher overall demand.

Algeria is facing a new crossroad as its political and socio-economic balance has become increasingly weakened by the consequences of the oil price collapse since 2014. Algeria is faced with stark choices, as illustrated by the interplay between its energy sector and its political & economic challenges and opportunities. Budgetary constraints are putting pressure on its key hydrocarbon industry, which was already suffering from years of underinvestment due to tough fiscal terms, challenging business climate and security risks. The North African nation needs to intensify efforts to revive its oil and gas upstream sector with new projects, avert the long-term production decline at mature fields, whilst meeting growing domestic demand and honoring gas export commitments. The widening fiscal deficit and the rapid erosion of financial buffers since the oil price fell is further increasing the need for foreign capital to boost oil and gas reserves, amid growing competition with other producing nations to attract capital and technical know-how from international oil companies. But the lack of upstream investment is just one of the challenges facing Algiers in its energy sector and beyond.

CEDIGAZ 2018 LNG scenario to 2040

CEDIGAZ Reference Scenario, which incorporates national energy plans and INDC commitments. Natural gas demand grows by 1.4%/year between 2016 and 2040 and plays a growing role in the energy mix at the expense of the other fossil fuels. The gradual shift from coal and oil to natural gas and renewables helps reduce the carbon intensity of the energy system as electrification and decarbonisation accelerate over the projection period. The expansion of natural gas markets is supported by abundant and competitive conventional and unconventional resources, as well as a very rapid growth of spot and flexible LNG trade.

Shortly after his inauguration in May 2017, the new President of South Korea has unveiled a new energy policy that shifts away from nuclear and coal power and focuses on renewables and natural gas instead. The move responds to growing safety concerns over nuclear power following the 2011 Fukushima accident and a series of earthquakes that hit southern Korea in 2016 and 2017. The energy transformation also responds to rising public hostility to coal power due to worsening air quality. Coal burning is also the main source of greenhouse gas emissions in the country, which has committed to reduce its emissions by 37% by 2030.

Kuwait is mostly known as one of the world's largest oil producing nations and as a leading member of OPEC. But the country was also a pioneer in 2009 when it became the first in the MENA region to import LNG via a floating storage and regasification unit. At the time, LNG was considered a stop-gap solution to address chronic electricity shortages that threatened Kuwait's economic and socio-political stability. Today, Kuwait continues to lead the way in the region by being the first LNG importer to invest in a land-based LNG import terminal. The 22 mtpa facility, for which construction has begun at Al Zour industrial area, is scheduled to come online in 2021. Cedigaz's latest report examines the risks and opportunities of Kuwait's LNG strategy.

The EU gas and energy sector is in the midst of a profound transformation driven by decarbonisation, digitalisation and decentralisation. The latest report by Cedigaz analyses in ten key points the evolution of the gas sector and includes forward looking views on new trends in EU gas markets.

Thanks to India's rising economy and population, the country's outlook for growth in energy demand is robust.  The role of gas in the country's energy mix, however, is hard to determine. Today, India's primary energy mix is dominated by coal and oil. The role of natural gas is limited: only 6% in 2016.  But the government wants to make India a gas-based economy and raise the share of natural gas in the energy mix to 15% by 2022, although the timing remains uncertain. This paper analyses gas demand trends in India by 2025-30 and draws on two reports recently published by the Oxford Institute for Energy Studies (OIES) and the Bureau of Economic Geology (BEG)/Centre for Energy Economics (CEE), University of Texas. Gas consumption in India is driven by five sectors: fertilizer (34% of total gas demand in fiscal year 2015-16), electric power (23%), refining (11%), city gas distribution, including transport (11%), and petrochemical (8%) industries. In 2016, after five years of consecutive declines, gas consumption increased to 55 bcm, boosted by sales to city gas distribution mainly. The country faces a widening gap between indigenous gas production and demand, which is met by increasing Liquefied Natural Gas (LNG) imports. LNG imports surged by 34% over 2015 to 25 bcm in 2016, making India the fourth largest importer in the world.

CEDIGAZ 2017 perspectives on gas markets to 2035

Despite a decline in global coal demand for the second consecutive year, international steam coal prices doubled in 2016. This massive rise may seem paradoxical; in fact, it responded to market fundamentals: a tightening of the international market due to an unexpected surge in Chinese coal imports and the inability of exporters to meet this sudden increase. The surge in Chinese imports was not due to increasing demand – Chinese coal consumption in 2016 fell for the third year in a row– but to domestic production restrictions mandated by the Chinese government from April 2016. To remove excessive and outdated capacities in the domestic coal sector, that weighed on domestic coal prices, the government required coal mining companies to cut operating days from 330 to 276 a year. The new regulation led to a fall in coal production, shortages of coal and a steep increase in domestic coal prices, forcing power utilities to turn to the international market. However, after five years of low prices and reductions in investment, exporters were not able to respond to this sudden demand and international prices increased to clear the market.

As of end 2016, there were 672 underground gas storage (UGS) facilities in operation in the world, representing a working gas capacity of 424 billion cubic meters (bcm), or 12% of 2016 world gas consumption. The number of storage facilities has decreased (680 UGS in 2015), mainly due to closure/mothballing of UGS in the United States and Europe. However, the global working capacity has slightly increased (+11 bcm) driven by expansions in the Commonwealth of Independent States (CIS), the Middle East and China. In Europe, storage capacity has continued its decline. Working gas capacity decreased by 5.8 bcm due to the closure of storage facilities in Germany, Ireland and the UK. The temporary closure of the Rough depleted field was confirmed as a permanent one in June 2017. This sharply reduces the UK storage capacity, and especially its seasonal storage capacity.

The United Arab Emirates (UAE) is one of the world's longest-established LNG exporters. But despite holding the world's sixth largest gas reserves, LNG imports into the federation increased at an impressive rate since 2010, when the Jebel Ali floating terminal in Dubai started up. With gas representing more than 90% of the power fuel mix, LNG purchases have been key to fill a widening supply deficit in order to match rapidly growing gas-to-power demand. Today, LNG remains at the heart of the UAE's strategy to meet rising energy consumption and support economic and industrial expansion in times of reduced oil income and budgetary constraints. Cedigaz's latest report examines the risks and opportunities inherent to this strategy and asks whether it is viable in the medium to longer term.

Controlling greenhouse gas (GHG) emissions and other environmental impacts while ensuring safe and affordable energy for all are the major challenges faced by Southeast Asia. To respond to these challenges, the Association of Southeast Asian Nations (ASEAN) is increasing the share of renewable energy sources in its energy mix and implements measures to reduce its energy and carbon intensity. Surging energy and electricity needs mean that fossil fuels will continue to dominate the energy and electricity mix by 2040. While natural gas is an ideal fuel to reduce the environmental footprint of power generation, competition with coal, stagnation in gas production, lack of adequate infrastructure, have been major barriers to its increased use so far. Southeast Asia has turned to coal instead, which has been the fuel of choice for power generation in the past ten years due to its low cost and ample availability in the region. But as electricity demand is expected to continue surging, and with a growing concern over air pollution and CO2 emissions, the dominance of coal in the Southeast Asian power sector is increasingly called into question.

Iran owns the world’s second largest proven gas reserves holding 34 trillion cubic meters of gas. However historically the country has not been able to fully benefit from its huge potential and become a major player in the global gas trade for a number of reasons, mainly the imposed US and international sanctions and an internal legal and contractual regime unfavorable for investment. This has made the country unable to capitalize on its huge natural gas reserves and to duly develop its energy industry potential.

Up until not long ago, China’s gas story had been one of soaring demand and insufficient supplies. But since 2014, due to its economic slowdown and the collapse in oil prices, China’s gas market has swung into oversupply. Despite Beijing’s ambitious fuel switching agenda from coal to gas, domestic prices will continue to cripple demand and the government’s consumption targets of 230-260 bcm in 2015 and 360-400 bcm in 2020 will not be met. The author expects China’s gas demand to reach 190 bcm in 2015 and 270-280 bcm in 2020.

Since its first publication in 1990, "Underground Gas Storage in the World" has been the industry's reference on underground gas storage (UGS). The updated 2016 edition includes for the first time the coverage of LNG storage in the world. The report includes detailed analyses of the latest developments and trends in the storage industry, CEDIGAZ's Outlook to 2035 at regional and global levels, and extensive country analyses with complete datasets including current, under construction and planned UGS and LNG import facilities for 49 countries.

According to the latest CEDIGAZ report, the gas for heating market in Europe, for many years a stable and growing demand source, is on the cusp of significant change, which is likely to lead to major declines over the coming decades. Key uncertainties remain over the pace and extent of these declines, and gas utilities would be well advised to prepare for changes by involvement in district heating and other technologies which maintain gas as part of a lower carbon heating future. Natural gas is the dominant fuel for heating residential and commercial properties in the EU, providing 47% of both input energy and useful heat in 2013. However, gas for heating faces major challenges in coming decades due to calls for greater energy efficiency and decarbonisation of the heating sector. Although, in the mid-term , expansion of CHPs and DHNs provide some opportunities for gas, long-term forecasts show gas demand for heating declining over the period to 2050, but there are significant variations in the future levels from a business as usual scenario which sees gas demand at 165 bcm in 2050 (compared to 195 bcm in 2013) to a high energy efficiency scenario which at only 44 bcm.

Gas price subsidies have a significant effect on the gas consumption. Simply put they embody the inexorable link between the price of a good and its demand. By artificially lowering the price of gas, it can become more competitive as a fuel, potentially even crowding out other fuels or technologies, as well as encouraging excessive consumption that would not have occurred in the absence of subsidies. The extent to which either of these situations are the case is dependent on the subsidies of a given country with two particular factors; price/level of discount and how much of the population it is available to. The cheaper the gas the more widespread and heavy its use (or the use of a byproduct of gas such as electricity, heat or water) will be. Additionally if subsidies are extended to larger parts of the population then not only does that increase the amount of users whose consumption may be wasteful but it also extends cheaper gas to richer households who are typically higher consumption users and therefore capable of wasting more. It therefore follows that any countries wishing to reduce or cut their subsidies will likely see their gas demand fall.

The oil price decline has left American producers in a situation like that of 2009 following the collapse of the Henry Hub gas prices. At the time, shale gas production was growing fast but demand was depressed due to the effects of the subprime mortgage crisis. Producers reacted by redirecting their investments towards liquid-rich deposits (containing oil or natural gas liquids) and were thus able to benefit from the oil price recovery. This strategic reorientation did not penalize gas production, which continued to grow, thanks to the gases associated with oil production which, in recent years, have been responsible for almost all growth in gas production. Today, more than 50% of the shale gas produced in the United States comes from liquid-rich deposits. Consequently, any decrease in liquids production occurring in reaction to falling oil prices is bound to have major repercussions on domestic gas production.

After a period of extensive growth in the 2000s, the Russian gas industry is now facing numerous challenges. Mounting competition by independent producers and the development of new production by Gazprom, combined with stagnating domestic demand and weakening export markets, have created a situation of overproduction, made worse by western sanctions and low oil and gas prices. Expansion to the East thanks to the recent China deal is not expected to provide much relief before 2024. The coming decade will be critical for the industry and its outcome will largely depend on the government's pricing and institutional policies but the role of the state should remain essential.

In February 2015, Canada counted 22 LNG liquefaction plant projects – of which 17 are located in British Columbia – representing a total design capacity of 325 mmtpa. Canada has the potential to become a major LNG exporter but no project has received Final Investment Decision (FID) so far. Competition with US brownfield projects with innovative business models have limited the commercial appeal of many Canadian projects relying on oil indexation. More recently, plummeting oil prices have put into question their profitability and lead to several postponements of FID reviews. CEDIGAZ’s new report Waiting for the Next Train? An Assessment of the Emerging LNG Industry in Canada discusses the potential for Canada to export LNG, looking at the initial enthusiasm and wide support by public authorities and local communities but also at the economic challenges and commercial issues that are slowing the progress of these projects.

Japan's energy policy is undergoing fundamental changes. The accident at TEPCO's Fukushima Daiichi nuclear power plant questions the future contribution of nuclear power in the national energy mix. Growing imports of fossil fuels to replace the lost nuclear capacity inflated energy prices and raise economic and energy security challenges. At the same time, the US shale gas and oil revolution is reshaping the global energy scene. Japan expects to take advantage of the trend to eliminate the “Asian premium” on natural gas prices and expand cheaper natural gas consumption. These developments have driven the Government of Japan to review its energy policy from scratch and adopt a new Strategic Energy Plan. This new policy has far reaching implications for gas and coal development in Japan but also for the international markets as Japan is the world's largest LNG importer and the second largest coal importer.

LNG as a potential transport fuel, especially in shipping and trucking, is attracting considerable interest. This is mainly a reflection of the price advantage of LNG over oil based fuels, especially in the US where the shale gas revolution has driven gas prices to record lows. In the marine sector, the reinforcement of emissions regulations will force ship-owners to move to less polluting fuels or technology and LNG has a number of advantages over other compliance solutions. However, the development of LNG as a transport fuel faces a number of challenges and will have to go hand in hand with the development of fuelling infrastructure.

Despite its many assets, a confluence of factors – including flat electricity demand, rising use of renewable energy sources, falling wholesale electricity market prices, high gas prices relative to coal and low CO2 prices – has eroded the competitiveness of natural gas in the EU power sector. The share of natural gas in the EU electricity mix has decreased from 23% in 2010 to 20.5% in 2012. By contrast, coal-fired power stations have been operating at high loads, increasing coal demand by the sector. This thorough analysis by CEDIGAZ of gas, coal and CO2 dynamics in the context of rising renewables is indispensable to understand what is at stake in the EU power sector and how it will affect future European gas demand.