International Energy: Demand for natural gas will rise further in 2025

The International Energy Agency said that global demand for natural gas reached its highest level ever in 2024, and is expected to expand further in 2025, mainly supported by some fast-growing markets in Asia.

The agency added in its report, “The Gas Market for the First Quarter of 2025,” that natural gas consumption increased during 2024, by 2.8 percent, or 115 billion cubic meters, bringing the volume of consumption to about 4.212 trillion cubic meters of gas, compared to 4.097 trillion cubic meters. of gas in 2023, as this relatively strong growth is mainly due to the Asia-Pacific region, which accounted for approximately 45 percent of Increased demand for gas in 2024 against the backdrop of continued economic expansion.

The agency says that natural gas met about 40 percent of the increase in global energy demand in 2024 – a larger share than any other fuel – so that natural gas continues to displace oil and oil products in various sectors. The use of gas was for industry and to meet the needs of the energy sector itself. The main driver behind global trends, meeting approximately 45 percent of demand growth.”

The agency says that although the halt of Russian gas pipeline transportation through Ukraine on January 1, 2025 does not pose an imminent risk to the security of supplies for the European Union, it may increase LNG import requirements and tighten market fundamentals in 2025, when it is scheduled to compensate. The growth in LNG supplies is partly due to a decline in pipelined deliveries of Russian gas to Europe.

The agency expects that the interruption of Russian gas supplies through pipelines through Ukraine will continue until the end of the year, as assessments indicate that this should not pose a direct threat to the security of supplies for European Union member states, given their ample storage capacity and medium interconnection. And access to the global LNG market.

Russian natural gas exports through pipelines passing from Ukraine to Europe stopped on the first days of this year after the expiration of the transit agreement and the failure of Moscow and Kiev to reach an agreement to continue flows. The closure of the oldest route for Russian gas to cross to Europe ends a decade that witnessed tense relations due to Russia’s seizure of Crimea in 2014.

Russia shipped about 15 billion cubic meters of gas through Ukraine in 2023, down from 65 billion cubic meters when the last five-year contract began in 2020.

The agency says that stopping the transit of Ukrainian gas for the entire year would reduce Russian gas supplies via pipelines to Europe by about 15 billion cubic meters in 2025 compared to 2024, as natural gas stock levels in the European Union have already decreased by about 15 billion cubic meters on an annual basis at the beginning of the year. 2025, which may lead to increased demand this summer to replenish storage sites. Combined, these factors may require increased European LNG imports this year, leading to a tightening of the global gas balance.

The agency expects the growth of global gas demand to slow to less than 2 percent in 2025, as is the case in 2024, and growth is scheduled to be largely driven by Asia, which is expected to represent approximately 45 percent of the growing demand for gas. .

The agency says that tight gas supply fundamentals are expected to continue through 2025, negatively affecting global demand growth, as global supply of liquefied natural gas grew by 2.5 percent (or 13 billion cubic metres) in 2024, which is much lower than the average. Its growth rate of 8 percent between 2016 and 2020, as project delays, in addition to raw gas supply problems, affected some old producers, including in Angola. And Egypt and Trinidad and Tobago, in the growth of liquefied natural gas production.

The agency added that the growth of the liquefied natural gas market is scheduled to accelerate during the current year to 5 percent, or slightly more than 25 billion cubic metres, due to the expected start and intensification of many large liquefied natural gas projects in North America. It is also expected Africa and Asia will also contribute to the growth of liquefied natural gas supplies in 2025.

The agency says that Middle East imports of liquefied gas rose during the past year by 21 percent, or more than two billion cubic meters, on an annual basis, with Jordanian liquefied natural gas imports growing more than five-fold as a result of transferring most of these volumes to Egypt, where there is no Egypt is expected to return to exports in 2025, leading to a loss of about one billion cubic meters of balance and reducing the growth of the continent’s exports.