Medium-Term Gas
Report 2023
Including the Gas Market Report, Q4-2023

INTERNATIONAL ENERGY AGENCY
The IEA examines the full spectrum of energy
issues 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 31
member countries, 13 association countries andbeyond.

This publication and any map included herein arewithout prejudice to the status of or sovereignty
over any territory, to the delimitation ofinternational frontiers and boundaries and to thename of any territory, city or area.

Source: IEA.
International Energy Agency
Website: www.iea.org

IEA member countries:
Australia
Austria
Belgium
CanadaCzech Republic
Denmark
Estonia
FinlandFranceGermany
GreeceHungary
Ireland
Italy
Japan
Korea
Lithuania
Luxembourg
MexicoNetherlands
New Zealand
NorwayPolandPortugal
Slovak Republic

Spain
SwedenSwitzerland
Republic of Türkiye
United Kingdom
United States
The European Commission
also participates in the workof the IEA
IEA association countries:

Argentina
Brazil
China
Egypt
India
Indonesia
Kenya
MoroccoSenegalSingapore
South Africa
ThailandUkraineAbstract

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Abstract
The energy crisis triggered by Russia’s invasion of Ukraine marked

over the medium term as a result of the rapid deployment of
renewables and improved energy efficiency standards. Demand
growth 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 in
emerging markets in Asia.

a turning point for global natural gas markets. Growth in global gas
demand is set to slow down significantly over the medium term
(2022-2026). This follows a decade of strong expansion in which
gas contributed around 40% of the growth in primary energy supply
worldwide.
While market tensions eased in the first three quarters of 2023, gas
supplies 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 cautious
optimism ahead of the 2023-24 heating season. However, a rangeof risk factors could easily renew market tensions. Northwest
Europe 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 2023 Medium-Term
Market Report provides an outlook on the development of global
gas demand and supply until 2026. This year’s report includes a
special spotlight on Africa and the potential for gas to contribute toregional economic growth and improved energy access. Beyond the
medium-term outlook, the report provides a thorough review ofrecent market developments ahead of the 2023-24 winter season in
the Northern Hemisphere. As part of the IEA’s Low-Emission Gases
Work 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 the

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

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developments in emerging markets.

Table of contents

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Table of contents
Executive summary and key assumptions................................................3
Gas market update .....................................................................................15
Medium-term market outlook ....................................................................37
Spotlight on Africa .....................................................................................75
Medium-term outlook for low-emission gases .......................................87

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Annex .........................................................................................................104

Executive summary and key assumptions

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

PAGE | 3

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Executive summary and key assumptions

Executive summary and key assumptions

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

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 worldwide
expanded by close to 25% and accounted for 40% of the growth in

Asian spot LNG prices averaged 70% and 60% below their 2022
levels, respectively. However, they have remained well above their
historical averages.

primary energy supply worldwide – more than any other fuel. This
rapid 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 Pacific

The supply side remained tight in the first three quarters of2023, as the additional LNG supply (+11 bcm) was insufficient tooffset the steep decline in Russian piped gas deliveries to theEuropean Union (-38 bcm). In this context, markets remained
sensitive and continued to display strong price volatility. In
August 2023, volatility on the European benchmark (TTF monthahead contract) reached its highest level since Russia’s invasion of
Ukraine, as strike risks in Australia and unplanned outages in
Norway weighed on the near-term gas supply outlook.

region, and the scaling up of shale production in the United States.
The energy crisis triggered by Russia’s invasion of Ukraine
marked a turning point for global gas markets. While markets
moved towards a gradual rebalancing in the first three quarters (Q13) of 2023, structurally higher gas prices pave the way for a slower
and more uncertain demand trajectory, with growth almost entirely

security concerns in the second half of the decade.
Despite the gradual rebalancing of gas markets, risks anduncertainties weigh on the outlook for the 2023-24 winter. The steep
demand reductions in European and mature Asian markets in 2023
have eased market fundamentals and put downward pressure on
prices. In the first three quarters of the year, European hub and

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In the European Union, storage sites opened the 2023-24 heating
season at 96% of full capacity and 10 bcm above their five-year
average. Nevertheless, full storage sites are no guarantee
against winter volatility. As highlighted in the Global Gas Security
Review 2023, a cold winter together with lower LNG availability anda further decline in Russian piped gas deliveries could renew
market tensions, especially towards the end of the 2023-24 winter.
The risks associated with this near term outlook are reflected in
the summer-winter spread, which averaged USD 5/MBtu on TTF in
Q2-Q3 2023.

concentrated in Asia and the gas-rich markets of Africa and the
Middle East. A strong increase in liquefied natural gas (LNG)
production capacity towards the end of our forecast horizon is
expected to loosen market fundamentals and ease gas supply

Executive summary and key assumptions

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

European gas prices remained highly volatile in Q3 2023 amid tight supply conditions
Historical monthly price volatility on the TTF month-ahead contract (annualised), 2016 - 2023

250%

200%

150%

100%

50%

Jan-16
Mar-16May-16
Jul-16
Sep-16
Nov-16
Jan-17Mar-17May-17
Jul-17
Sep-17
Nov-17Jan-18Mar-18May-18
Jul-18
Sep-18
Nov-18Jan-19Mar-19
May-19Jul-19Sep-19
Nov-19Jan-20Mar-20May-20Jul-20
Sep-20Nov-20Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23Mar-23May-23
Jul-23
Sep-230%

Historical volatility
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Sources: IEA analysis based on Bloomberg (2023).

Executive summary and key assumptions

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Gas markets are set for slower growth over the medium-term,
following a peak in gas demand in mature markets in 2021

standards and growing electrification in areas such as spaceheating are set to weigh on gas consumption. In mature Asia
Pacific markets, improving nuclear availability together with thecontinued expansion of renewables is expected to reduce the call

The supply shock triggered by Russia cast a long shadow overgas markets. Higher gas prices are reducing its competitivenessvis-à-vis other fuels, while Russia’s steep supply cuts and the lackof LNG availability in South Asian markets damaged the image ofnatural gas as a “reliable” fuel.

on gas-fired power plants and drive down overall gas demand. In
North America, higher output from renewable energy is forecast to
reduce gas usage in power generation, while improved energy
efficiency standards and a gradual electrification of heating are set
to shrink the role of gas in residential and commercial sectors.

Gas demand growth is projected to slow by almost a third, froman average rate of 2.5% per year during 2017-2021 to 1.6% in the2022-2026 period. Natural gas consumption is expected to remainbroadly flat in 2023 as demand gains in Asia Pacific and the
Middle East are almost entirely offset by the drops in demand inEurope, Central America and South America. Global gas demand is
expected to return to moderate growth in 2024, primarily driven
by Asia Pacific and the Middle East. Demand growth is expected
to be more robust in 2025-26, supported by higher LNG
liquefaction capacity additions than the historical average.

Faster-growing Asia Pacific markets and gas-rich countries in Africa
and the Middle East are set to drive growth in gas demand. Chinaalone accounts for almost half of the increase in global gas
demand over the forecast period, with the power sector, industrial
production and city gas networks the major consumers. Strong LNG
supply at the end of the forecast period is set to ease market
fundamentals and unlock some price sensitive demand indeveloping Asian markets that have the infrastructure in place. In
the Middle East, production growth in Iran, Israel and Saudi
Arabia is expected to support the expansion of gas-intensive
industries and higher gas burn in the power sector. Africa’s gas
demand growth is driven by its rapidly rising population, improving
energy access and economic growth. Eurasian natural gas demand
trends towards stagnation, with the region’s gas demand standing
2% above its 2021 level by 2026.

The combined gas consumption of mature markets in Asia
Pacific 1, Europe and North America peaked in 2021 and is
expected to decline at a rate of 1% per year between 2022 and2026. In Europe, the gas crisis reinforced the structural drivers
accelerating the decline in gas demand over the medium term. An
accelerated deployment of renewables, higher energy efficiency

Australia, Japan, Korea, New Zealand and Singapore.
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1

Executive summary and key assumptions

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

The strong increase in LNG supply in 2026 is expected to ease market fundamentals

100

Forecast

80
60
40
20
0
- 20
- 40
- 60
- 80
- 100

2022
Russian piped gas to Europe
Central Asia to China

2023

2024
Other pipeline imports to Europe
Global LNG supply

2025

2026

Russian piped gas to China
Total y-o-y change
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Y-o-y change in bcm

Year-on-year change in key piped natural gas trade and global LNG supply, 2022 – 2026

Executive summary and key assumptions

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Natural gas demand peaked in mature markets in 2021, with growth prospects increasingly
concentrated in the Asia Pacific region and the Middle East

4400
4300
4200
4100
4000
3900
3800
3700
3600
3500

Asia Pacific- maturemarkets2022

EuropeMature markets

North
America

Middle East

AfricaEurasia

Gas rich markets

Central andSouthAmerica

China

Other Asianmarkets

Fast growing Asianmarkets

2026
IEA. CC BY 4.0.

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bcm

Forecasted change in natural gas demand by key regions, 2022 – 2026

Executive summary and key assumptions

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

LNG supply growth is expected to drive an increasinglyinterconnected and globalised gas market

enhanced dialogue between producers and consumers on securityof supply issues. The IEA’s Task Force on Gas and Clean Fuels
Market Monitoring and Supply Security has provided such aplatform since October 2022.

Global LNG supply is expected to expand by 25% (or 130 bcm ayear) between 2022 and 2026, with 70% of the supply increase
concentrated in 2025-26. In this context, LNG export projects will be

Low-emissions gases are set to expand rapidly

a key driver of upstream developments, as supply requirements for
LNG feedgas account for around 55% of the net increase in global

The supply of low-emissions gases is expected to more than double
over the medium term, resulting in an increase of over 8 bcm inabsolute terms. Europe and North America are set to drive thisexpansion and to contribute for 70% of the overall growth. The
development of low-emissions gases in these markets benefits froma wide range of policies, increasingly sophisticated subsidy
schemes and well-developed, interconnected gas networks.
Nevertheless, further efforts will be required to reach the ambitious
targets set for biomethane and low-emissions hydrogen. Besides
Europe and North America, a number of emerging low-emissions
gas producers are expected to scale up their output.

gas output in the forecast period.
The United States alone is set to contribute for around half ofincremental LNG supply, reinforcing its position as the world’s
largest LNG exporter. Consequently, the share of the United Statesin global LNG supply is set to increase from 20% in 2022 to over
25% by 2026. Considering the contractual terms underpinning US
LNG supply (hub-indexed pricing mechanisms and destination-freeshipping arrangements), the liquidity and the flexibility of global LNG
trade is set to increase over the medium-term.
response to short-term supply and/or demand shocks, resulting in amore resilent global gas market. Regional markets are set tobecome increasingly interdepedent. Liquidity in the LNG market
can ease market tensions in regions facing tight supply-demand
fundamentals. However, this also means that events that induce
price volatility in one region could impact price fluctuations andsupply-demand dynamics in geographically distant markets. An
increasingly globalised market will reinforce the need for
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Biomethane production is expected to expand by over 65% (or 4.5bcm) between 2022 and 2026, accounting for almost 55% of thetotal increase in low-emissions gases during this period. Lowemissions hydrogen is projected to grow at an average rate ofclose to 25% per year between 2022 and 2026, translating into
almost 4 bcm equivalent of additional supply by 2026. In contrast, emethane struggles to take off over the forecast period, requiring a
concentrated effort between emerging producers and consumers toestablish viable supply chains and effective support mechanisms.

Liquidity in the LNG market will allow for a more effective

Executive summary and key assumptions

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

LNG feedgas supply requirements account for around 55% of the net increase in global gas
output in the forecast period
Key drivers behind of natural production growth,2017 – 2021

Long-distance pipeline trade

LNG feedgas requirements
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Local consumption

Key drivers behind of natural production growth,2022 – 2026 (forecast)Executive summary and key assumptions

Gas Market Report, Q4-2023

Key assumptions behind the medium-term forecast
Short-term indicators are confirming this general slowdown ineconomic growth. In the United States, the Manufacturing
Purchasing Managers’ Index (PMI) averaged 47 during Q1-Q3
2023, indicating a contraction in manufacturing activity. Real GDP
growth in the United States is expected to slow to an average of
1.5% per year between 2023 and 2026. In the Euro area, theManufacturing PMI stood at 45 during Q1-Q3 2023 and dropped to

The global energy crisis triggered by Russia’s invasion of Ukraine
led to a profound reconfiguration of the global gas market. Thismedium-term forecast is subject to an unusually wide range of
uncertainties stemming from the broader geopolitical andmacroeconomic environment.

Macroeconomic outlook: Towards slower growth42.7 in July – its lowest level in three years. Real GDP growth in theEuropean Union is forecast to average 1.4% per year between 2023
and 2026. In China, manufacturing activity and consumption
rebounded at the start of 2023 when authorities eased their strict
lockdown policies. Nevertheless, weak export demand together withthe ongoing real estate downturn is weighing on economic
performance. China’s Manufacturing PMI stood at 50 in Q1-Q3
2023 and the country’s GDP growth is expected to average justbelow 4.5% between 2023 and 2026 – well below the 6.6% average
growth rate experienced between 2016 and 2019.

Following a drop of 3.1% in 2020, global real GDP grew by 6.4% in
2021. This strong performance was partly supported by therecovery in commercial and industrial activity after the Covidinduced lockdowns, when governments and central banks launchedmajor fiscal and monetary stimulus packages. Global GDP growthslowed to 3.3% in 2022 amid the unfolding global energy crisis,soaring commodity prices and rapidly rising consumer prices. In
response to the inflationary pressures, central banks adopted
tighter monetary policies by raising their interest rates. This inturn increased the cost of borrowing and is set to weigh on
economic activity during 2023 and 2024. Global GDP growth isset to fall below 3% in 2023 and to 2.6% in 2024 – its lowest
annual rate since the 2007-2008 global financial crisis, with the
exception of the 2020 pandemic period. Improving economic
performance and monetary easing is expected to translate into
stronger GDP growth in the second half of the forecast period

Natural gas prices are expected to remain above their historical
averagesand average 3.4% between 2025 and 2026.

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This forecast relies on external energy price assumptions based on
the futures’ market prices observed at the end of September
2023. European hub and Asian spot LNG prices rose to all-timehighs in 2022 amid the supply shock triggered by Russia. In

Executive summary and key assumptions

Gas Market Report, Q4-2023

Europe, TTF spot prices stood at USD 37/MBtu in 2022, more thanseven times their average between 2016 and 2020. In Asia, JKM
prices followed a similar trajectory and averaged close to
USD 34/MBtu. Gas markets have moved towards a gradualterm, especially in sectors where gas is facing stiff competition fromother fuels, such as power generation and road transport.

rebalancing since the start of 2023 due to timely policy action,effectively working market forces and favourable weather
conditions. Natural gas prices could strengthen again in 2024
amid tighter supply–demand fundamentals. Forward curves indicatethat TTF and JKM prices are expected to increase by around 10%
and oscillate in a range between USD 14-15/MBtu in 2024.
However, the start-up of new LNG liquefaction terminals andimproving supply fundamentals are set to provide downward
pressure on TTF and Asian spot LNG prices during the second
half of the forecast period to average USD 13/MBtu in 2025 and2026. This would still be more than double the average price levels
seen between 2016 and 2020. Oil-indexed LNG prices are
assumed to display a less volatile pattern over the forecast period
and average USD 12/MBtu between 2023 and 2026 – 30% above
their levels between 2016 and 2020. In the United States, Henry
Hub prices rose to over USD 6/MBtu in 2022, their highest level
since 2008. Forward curves indicate that Henry Hub prices are
expected to hover at around USD 2.7/MBtu in 2023 and strenghten
to an average close to USD 4/MBtu during 2024-2026 – 40% above

The future of Russian piped gas deliveries to the Europe Union is a
key uncertainty in our forecast. They more than halved in 2022,
dropping from almost 140 bcm in 2021 to just above 60 bcm.
Considering current flow profiles, Russian piped gas deliveries are
set to decline by around 65% in 2023 to within a range of 2025 bcm. Russia’s gas transit contract with Ukraine is set to expire at
the end of 2024. Ukraine’s energy minister has ruled out thepossibility of extending the contract, following Russia’s invasion of
the country. Hence, this forecast assumes that only TurkStream
string 2 (15.75 bcm/yr) will supply Russian piped gas to theEuropean Union starting from 2025. While short-term capacity
booking options might continue to be available along the Ukrainiantransit route for European importers of Russian piped gas, thisRussian piped gas flows to the European Union

upside potential is not included in our baseline forecast.

Weather
Natural gas consumption is particularly sensitive to the weather,notably temperature; this forecast is based on the assumption of
average winter conditions (typically based on rolling five-year
averages) for the forthcoming heating seasons.

the levels experienced between 2016 and 2020.

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Natural gas prices trending above their historical average are
expected to weigh on natural gas demand growth over the medium

Executive summary and key assumptions

Gas Market Report, Q4-2023

Global GDP growth is expected to slow over the forecast period

Y-o-y change (%)

GDP growth, global and regional, 2018-2026
8%

Forecast

6%
4%
2%
0%
-2%
-4%

World

2026

Europe2025

Middle East

2024

Central and South America

2023

Eurasia2022

North America

2021

2018

Asia Pacific2020

Africa

-8%

2019

-6%

IEA. CC BY 4.0.

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IEA. CC BY 4.0.

Sources: IEA, IMF and Oxford Economics.

Executive summary and key assumptions

Gas Market Report, Q4-2023

Forward curves suggest that natural gas prices will remain above their historical averages in
the medium term
USD/MBtu

Natural gas price assumptions across key regions, 2016-2026
2021/22 gas supply shock

70
60
50
40

Forward curves as at end of September 2023

30

Limited new LNG capacity

20

New LNG wave

Covid-induced
demand shock10

Oil-indexed price range
Henry Hub - futures

Henry HubTTF - futures

TTF
JKM - futures

Jul-26Oct-25Jan-25

Apr-24

Jul-23Oct-22

Jan-22

Apr-21

Jul-20

Oct-19Jan-19Apr-18

Jul-17Oct-16

Jan-160

JKM

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PAGE | 14

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Note: Future prices are based on forward curves as of the end of September 2023 and do not represent a price forecast.
Sources: IEA analysis based on CME (2023), Henry Hub Natural Gas Futures Quotes, Dutch TTF Natural Gas Month Futures Settlements, LNG Japan/Korea Marker (Platts) Futures
Settlements; EIA (2023), Henry Hub Natural Gas Spot Price; Powernext (2023), Spot Market Data; S&P Global (2023), Platts Connect.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

PAGE | 15

IEA. CC BY 4.0.

Gas market update

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Natural gas demand returned to moderate growth in Q2-Q3 in Asia and North America…
Global gas consumption contracted by an estimated 1.5% y-o-yconsumption rose by around 7% y-o-y in Q1-Q3 2023, supported by
the industrial and power sectors. The country’s LNG imports rose byclose to 15% over the same period. In contrast, gas demand
continued to decline in the region’s mature gas markets (Japan and
Korea) amid depressed electricity consumption and improving
nuclear availability.

(or 65 bcm) in 2022 – comparable to demand drops seen in 2009
in the aftermath of the financial crisis, or during the global Covid-19
pandemic in 2020. First data indicate that this downward trend
continued in Q1 2023, when gas consumption declined in all key
markets due to the continued impact of high prices on gas use in
the industrial and power sectors and unseasonably mild weather
conditions. Natural gas demand returned to moderate growth inQ2-Q3 in North America and the rapidly growing markets of the

In North America, natural gas demand increased by a mere 1% (or8 bcm) in Q1-Q3 2023. While residential and commercial demand
declined amid an unseasonably mild Q1, gas use in the power
sector continued to grow strongly on continued coal-to-gas
switching dynamics. In Central and South America natural gas
demand dropped by 4% (or 3 bcm) in H1 2023 amid lower gas burnin the power sector.

Asia Pacific, while consumption continued to decline in Europe.
OECD Europe recorded a drop of 9% (or 33 bcm) y-o-y in Q1-Q3
2023. This was primarily driven by lower residential and commercial
demand in Q1 and a steep decline in gas burn in the power sector
during Q2 and Q3. The power sector emerged as the mostimportant driver behind Europe’s gas demand reduction, accounting
for over 55% of Europe’s total gas demand decline in Q1-Q3 2023.
Preliminary data indicate that gas use in industry continued to
decline during H1 2023, starting to recover in Q3 – albeit remaining
well below its pre-crisis levels.
Natural gas demand in the Asia Pacific region increased by an
estimated 2.5% (or 12 bcm) in the first eight months of 2023, as thedeclines recorded in Q1 were more than offset by risingconsumption during Q2-Q3. Demand growth is largely concentrated
in China. Preliminary data indicate that the country’s estimated gas
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Global gas supply is set to remain tight in 2023, as incremental
LNG supply (18 bcm) will not be sufficient to offset the expected
drop in Russia’s piped gas deliveries to the Europe Union (a declineof over 35 bcm). Considering the tight gas supply picture in 2023,
global gas demand is expected to remain broadly flat in 2023.
Most of the demand growth is projected to be driven by the
Asia Pacific region and the Middle East; however, this growth isalmost entirely offset by the demand drops in Europe and Central
and South America. This short-term forecast is subject to an
unusually wide range of uncertainties, stemming from thebroader geopolitical and macro-economic environment.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023…while European gas consumption remains depressed

Y-o-y change in bcm

Quarterly change in natural gas demand in key regions, 2022-2023
40

20

0

- 20

- 40

2022
Q1
OECD Europe

2022
Q2

2022
Q3

2022
Q4

Asia - selected markets*

2023
Q1
North America

2023
Q2

2023
Q3

Y-o-y change in bcm
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PAGE | 17

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* China, India, Japan and Korea.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

North American gas demand growth is set to slow and peak in 2023 before declining in 2024
Natural gas consumption in North America increased by angas switching in the power sector. This increase was almost entirely

estimated 1% (or 8 bcm) y-o-y in Q1-Q3 2023, primarily supported
by higher gas burn in the power sector.

offset by a 9% y-o-y decline in residential and commercial gas
demand. Mexico’s estimated natural gas consumption increased by
2% (or 1 bcm) y-o-y in the first eight months of 2023.

In the United States, natural gas demand rose by an estimated
0.8% (or 5 bcm) in Q1-Q3 2023, with growth entirely driven by the

In this forecast, North American growth in natural gas demand is
expected to experience a slowdown and to peak in 2023 withgrowth close to 1%, followed by a decline in 2024 triggered by thecontraction of gas demand for power generation in the
United States.

power sector. Preliminary data indicate that gas-to-power demand
expanded by 6% (or 16 bcm) in Q1-Q3 amid lower hydro output andat the expense of coal-fired generation (down almost 20% y-o-y).
Consequently, the share of natural gas in the power generation mix
rose from 34% in January 2021 to more than 45% in August 2023 –its highest monthly average on record. By the end of the year, a
total of 16 gas-fired power plants are expected to come online,
amounting to 8.4 GW of additional capacity.
In contrast, natural gas consumption in the residential andcommercial sector contracted by more than 6% (or 10 bcm) y-o-y in
Q1-Q3 2023 amid unseasonably mild weather in January-April.
Natural gas demand in industry declined by 1% (or 2 bcm) y-o-y in
Q1-Q3 2023 due to subdued economic activity. The US
Manufacturing Purchasing Managers’ Index (PMI) averaged 47 in
Q1-3, indicating a contraction in manufacturing activity.

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Natural gas consumption in Canada increased by an estimated 2%(or 1.5 bcm) y-o-y in Q1-3 2023. Natural gas demand in the power
and industrial sectors grew by 5% y-o-y in H1 2023 due to coal-to-Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

US gas consumption increased by 0.8% y-o-y in Q1-Q3 2023

20

8%

15

6%

10

4%

5

2%

0

0%

-5

-2%

- 10

-4%

- 15

-6%

- 20

2021
Q1

2021
Q2

2021
Q3

2021
Q4

Residential and commercial

2022
Q1
Power

2022
Q2

2022
Q3

Industry2022
Q4
Others

2023
Q1

2023
Q2

2023
Q3

Y-o-y change in %Y-o-y change in bcm

Estimated quarterly change in gas demand, United States, 2021-2023-8%

Y-o-y change

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Sources: IEA analysis based on EIA (2023), Natural Gas Consumption; Natural Gas Weekly Update.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Lower gas burn in the power sector continued to weigh on natural gas demand in Central andSouth America
Following a 3% decline in 2022, natural gas consumption remained
depressed in Central and South America in H1 2023. First
estimates indicate that the region’s gas demand fell by 4% (or3 bcm) y-o-y in H1 2023 amid lower gas burn in the power sector.

gas imports from Bolivia by 15% (or 0.2 bcm) y-o-y, while its LNG
inflows dropped by 80% (or 2 bcm) y-o-y in the first half of 2023.

In Argentina, the region’s largest gas market, gas demand fell by
2% (or 0.5 bcm) y-o-y in the first seven months 2023 according topreliminary data. This decline was almost entirely driven theresidential and commercial sectors, where gas use dropped by over
12% (or 0.9 bcm) y-o-y amid milder weather conditions. In contrast,
gas demand in industry grew by 5% y-o-y, while gas burn in the
power sector increased by close to 2% y-o-y.

flat in H1 2023 compared with the same period in 2022. The
country’s LNG exports rose by close to 10% y-o-y, suggesting thatdomestic gas consumption declined by over 5% (or 0.4 bcm) y-o-yduring H1 2023. In Venezuela observed gas consumption

Several other countries in the region experienced similar declines.
In Trinidad and Tobago natural gas production remained broadly

decreased by 7% (or 0.6 bcm) y-o-y in H1 2023. In Colombia gas
demand declined by 3% (or 0.22 bcm) y-o-y in the first eight monthsof 2023, primarily driven by lower gas burn in the power sector(down by 17% y-o-y). Gas demand in industry declined by 5% y-o-y,largely offset by higher gas use in refining (up by 10%). Gas
consumption in the residential and commercial sectors increased by
2% y-o-y. The region’s smaller markets displayed varied demand
patterns over the first eight months 2023, not sufficient to offset the
declines recorded in the five largest gas markets.

In Brazil, gas consumption continued to decline steeply anddropped by over 10% (or 2.2 bcm) y-o-y in the first eight months of2023, primarily driven by lower gas burn in the power sector. Thisdecreased by 30% (or 5 TWh) y-o-y in the first eight months of2023. The decline was almost entirely concentrated in Q1 2023,
when gas-to-power demand plummeted by close to 60% y-o-y amid
higher hydro availability. Gas-fired generation returned to growth inQ2 amid lower hydro output. Gas burn in the power sector
increased by 10% (or 0.7 TWh) y-o-y during the April-August period.
As a consequence of lower gas demand, Brazil reduced its piped

PAGE | 20

IEA. CC BY 4.0.

Taking into account the declines in H1 and assuming average
weather conditions for the remainder of the year, this forecast
expects natural gas demand in Central and South America todecline by close to 2% in 2023 amid depressed gas burn in the
power sector and a slowdown in economic growth.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Natural gas demand declined by 4% in Central and South America in H1 2023

bcm

Monthly natural gas consumption, Central and South America, 2022 and H1 2023
14
12
10
8
6
4
2
0

J

F

M

A

M

J

J

A

S

O

N

D

J

F

2022
Argentina

BrazilVenezuela

M

A

M

J

2023
Trinidad and Tobago

Colombia

Chile

Peru

Other
IEA. CC BY 4.0.

PAGE | 21

IEA. CC BY 4.0.

Sources: IEA analysis based on ANP (2023), Boletim Mensal da Produção de Petróleo e Gás Natural; BMC (2023), Informes Mensuales; Central Bank of Trinidad andTobago (2023), Statistics; CNE (2023), Generación bruta SEN; ENARGAS (2023), Datos Abiertos; ICIS (2023), ICIS LNG Edge; IEA (2023), Monthly Gas Data Service; JODI
(2023), Gas Database; MME (2023), Boletim Mensal de Acompanhamento da Industria de Gás Natural; OSINERG (2023), Reporte diario de la operación de los sistemas detransporte de gas natural.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Asian gas demand returned to moderate growth in Q2-Q3 2023…
Following a 2% decline in 2022, natural gas demand in the

addition, city gas sales to commercial and industrial consumers

Asia Pacific region returned to moderate growth during Q2-Q3
2023. While gas consumption in China and certain emerging Asianmarkets has been on the rise, demand remains depressed in theregion’s mature markets amid improving nuclear availability. For thefull year of 2023 Asian gas demand is projected to increase by 3%,
supported by the power and industrial sectors.

decreased by 2% and 11% y-o-y respectively in the first sevenmonths of 2023. For the full year of 2023 Japan’s gas demand isforecast to decrease by 6% compared with last year. This decline ismainly driven by the power sector, reflecting higher nuclear power
generation. Korea’s gas consumption fell by 1% y-o-y in the firstseven months of 2023 amid lower gas use in the power sector andcity gas segments. For the full year of 2023, Korea’s gas demand is
expected to decrease by 2% due to higher nuclear power output.

Following its first demand drop in four decades in 2022, China’s
natural gas consumption returned to growth in Q1 2023. Preliminary
data indicate that the country’s estimated gas consumption rose byaround 7% (or 18 bcm) y-o-y in Q1-Q3 2023. Industrial gas demandrose by over 3% y-o-y in H1 2023, supported by a recovery ineconomic activity. Gas-to-power demand surged by more than 10%y-o-y, as higher electricity demand together with lower hydro output
increased the call on gas-fired power plants. The city gas segmentrose by around 7% y-o-y due to growing gas penetration. For thefull year of 2023, China’s gas demand is projected to increase by
over 7%, led by the industrial and power sectors.
Japan’s gas consumption decreased by 11% (or 7 bcm) in the firstseven months of 2023. Gas-to-power demand declined by 16% (orabout 3 bcm) y-o-y in the first four months of 2023. This wasprimarily driven by lower electricity consumption (down by 5% y-o-y)
and improving nuclear availability. Japan’s nuclear power output
rose by 53% (or 18 TWh) y-o-y in the first eight months of 2023. In
PAGE | 22

IEA. CC BY 4.0.

India’s primary gas supply rose by 2% in the first eight months of2023, according to the Petroleum Planning & Analysis Cell.
Demand growth is primarily supported by the power, petrochemicaland fertiliser sectors. For the full year of 2023, India’s natural gas
demand is expected to increase by 4%, driven by the industrial andpower sectors. Emerging Asia’s gas consumption increased by an
estimated 2% y-o-y in the first seven months of 2023, amid lower
LNG spot prices. Thailand recorded 4% y-o-y growth in the firstseven months of 2023, primarily driven by higher gas burn in the
power sector. Bangladesh and Pakistan increased their LNG
imports by 14% and 6% y-o-y in Q1-Q3 2023, respectively. This
indicates a gradual recovery in the two countries’ gas demand,
driven by higher gas use in industry and the power sector. In 2023
gas demand in emerging Asia is projected to increase by a modest
3%, supported by growing economic activity and power demand.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023…primarily driven by China and emerging Asia

15%

20
15

10%

10
5%

5

Y-o-y change in %Y-o-y change in bcm

Estimated quarterly change in gas demand, selected Asian markets, 2021-2023

0%

0
-5

-5%

- 10
-10%

- 15
- 20

2021
Q1

2021
Q2

China

Japan

Korea

2021
Q3

2021
Q4

2022
Q1

India
2022
Q2

Others*
2022
Q3

Total
2022
Q4

Y-o-y change
2023
Q1

2023
Q2

2023
Q3

-15%

IEA. CC BY 4.0.

PAGE | 23

IEA. CC BY 4.0.

*Others comprise Indonesia, Malaysia, the Philippines, Singapore and Thailand.
Sources: IEA analysis based on ICIS (2023), ICIS LNG Edge; CQPGX (2023), Nanbin Observation; JODI (2023), Gas World Database; PPAC (2023), Gas
Consumption; EPPO (2023), Energy Statistics; Korea Energy Economics Institute (2023), Monthly Energy Statistics; Ministry of Economy, Trade and Industry ofJapan (2023), METI Statistics.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

The power sector drives down European gas demand in 2023
Natural gas consumption in OECD Europe fell by over 9% (orThis steep decline was driven by a combination of factors. Subdued
activity in energy-intensive industries together with continued
improvements in energy efficiency and behavioural changes
depressed electricity consumption, which fell by an estimated 5%(or 58 TWh) y-o-y in Q2-Q3. In addition, stronger renewable power
output (up by 8%) and improving nuclear availability in France (upby 25%) further reduced the call on gas-fired power plants. Gas
demand in industry declined by an estimated 3% (or 3 bcm) in Q1Q3. First data indicate that following the steep reductions recorded

33 bcm) y-o-y during Q1-Q3 2023. Over 60% of this demand
reduction occurred in Q1 when European gas consumption fell by
12% (or 21 bcm) y-o-y, primarily driven by lower gas use in theresidential and commercial sectors. The pace of demand reduction
moderated to a 7% (or 12 bcm) y-o-y decline in Q2-Q3 2023. Lowergas burn in the power sector accounted for the entire gas demand
reduction during this period, amid lower electricity consumption andstronger renewable power output.

in Q1, industrial gas consumption stayed close to last year’s levelsin Q2 and increased by 10% y-o-y in Q3. While lower gas prices
support gradually improving activity in gas-intensive industries,

Distribution network-related demand fell by an estimated 9% (or12 bcm) y-o-y in Q1-Q3 2023, with over 80% of the contraction
concentrated in Q1. Despite a colder spring, gas demand in theresidential and commercial sectors continued to decline in Q2,driven by non-weather-related factors. They include efficiency
gains, administrated gas-saving measures, fuel switching,
deployment of heat pumps, behavioural changes and risingaffordability issues. Preliminary data indicate that distribution
network-related demand rose by 4% (or over 0.5 bcm) in Q3, driven
by the commercial and service sectors.

industrial gas demand remains 15% below its Q3 2021 levels.
For the full year of 2023, OECD Europe’s gas demand is forecast
to decline by 7%. This is primarily driven by lower gas burn in the
power sector, which is expected to decline by 15% amid rapidly
expanding renewables and lower electricity consumption. Gas use
in industry is projected to remain close to last year’s levels, as lower
prices enable demand recovery in H2 2023. Considering thedeclines in the year to date, demand in the residential andcommercial sectors is expected to fall by 3% in 2023. In 2024
European gas demand is forecast to grow by a moderate 2%, as
the expected decline in gas-to-power demand is offset by higher

Gas-to-power demand dropped by an estimated 16% (or 18 bcm)
y-o-y in Q1-Q3 2023 and accounted for over 55% of Europe’s totalgas demand reduction over this period. Gas burn in the power
sector dropped by close to 20% (or 17 bcm) y-o-y in Q2-Q3 2023.

PAGE | 24

IEA. CC BY 4.0.

gas use in the residential, commercial and industrial sectors.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

European gas consumption dropped by over 9% in Q1-Q3 2023

35

25%

28

20%

21

15%

14

10%

7

5%

0

0%

-7

-5%

- 14

-10%

- 21

-15%

- 28

-20%

- 35

-25%

2021
Q1

2021
Q2

2021
Q3

2021
Q4

2022
Q1

Residential and commercial

2022
Q2
Power

2022
Q3
Industry

2022
Q4

2023
Q1

2023
Q2

2023
Q3

Y-o-y change in %Y-o-y change in bcm

Estimated quarterly change in gas demand, OECD Europe, 2021-2023

Y-o-y change
IEA. CC BY 4.0.

PAGE | 25

IEA. CC BY 4.0.

Sources: IEA analysis based on Enagas (2023), Natural Gas Demand; ENTSOG (2023), Transparency Platform; EPIAS (2023), Transparency Platform; Trading Hub Europe (2023),
Aggregated consumption.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

US natural gas production increased by close to 6% in Q1-Q3 2023
Dry natural gas production in the United States increased by an

In Northeast Texas and Louisiana, the Haynesville pure gas shaleplay provided further support to US gas production growth with a
13% y-o-y increase in the first eight months of 2023. While drilling
activity showed a contraction of 5% in August 2023 compared withthe previous year, wells completed increased by close to 30% y-o-y.
In May 2023 the completion of the Acadian Haynesville Extension
pipeline added 400 Mcf/d (or 4 bcm/yr) of takeaway capacity tomeet the growing need for feedgas in Louisiana.

estimated 5% y-o-y (about 32 bcm) in the first nine months of 2023.
On average, daily output remained above the 100 Bcf threshold (or2.8 bcm/d). Natural gas production growth slowed from a 5% y-o-yincrease in Q1-2 to 2% in Q3 2023.
The significant growth in natural gas production was primarily due toan increase in the output of associated gas production from oildriven shale plays. The Permian Basin, the largest source of
associated natural gas, grew its output by 10% y-o-y during January
to July 2023, when it reached an all-time high of 17.1 Bcf/d (or0.48 bcm/d). The Permian Basin alone accounted for 30% of
incremental natural gas production in the United States over the firsteight months of 2023. This expansion is the result of sustained
drilling activity in the region, with 466 wells drilled on average permonth in 2023, or 8.3% more y-o-y than in July 2022. Additionally,other plays such as the Eagle Ford, the Woodford and the Bakken
plays contributed to the development of associated gas output. The
debottlenecking of the Permian Basin will be crucial to further
expansion of sales gas production. In 2023 several pipeline
expansion projects are expected to be completed. The Permian
Highway Pipeline, the Whistler Pipeline and the Gulf Coast Express

Gas production from the Appalachian Basin recovered from an
initial contraction in the first half of the year, and displaying 0.5% yo-y growth in July 2023. Appalachia alone accounted for almost
30% of total US production in Q1-Q3 2023. Additional takeaway
capacity is expected to ease midstream pipeline constraints. The
Mountain Valley Pipeline is expected to be commissioned by theend of 2023/early 2024 and would add 20 bcm/yr of transmission
capacity from northwestern West Virginia to southern Virginia. The
first phase of the Regional Energy Access Project (0.83 Bcf/d or
8.5 bcm/yr) is foreseen to enter commercial service in Q4 2023.

could add 17 bcm/yr of takeaway capacity by the end of 2023.

PAGE | 26

IEA. CC BY 4.0.

We forecast growth in US natural gas production to slow during theremainder of the year due to the relatively high storage levels andan expected decline in domestic demand. For the full year of 2023,
US natural gas output is forecast to grow by around 2%.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

The Permian Basin accounted for 30% of incremental US gas production in Q1-Q3 2023
Gas production by type, United States, 2018-2023

bcm

100
100
80
60
40
20
0

95
100
90
80
70
60
50
40
30
20
10
0

J J N A S F J DM

120.0
100.0
80.0
60.0
40.0
20.0
0.0

201820192020
2021
J FMAMJ J ASONDJ FMAMJ J ASONDJ FMAMJ J ASONDJ FMAMJ J ASONDJ FMAMJ J ASONDJ FMAMJ J AS
2019
2020
2021
2023
2018
2022

90
85

Total US gas (Bcf/d)

105

Appalachian Basin
Other dry shale
Permian Basin
Other associated
shale
Other production
Total US gas
Pipeline imports (net)80

Total US gas (bcf/d)

75

PAGE | 27

IEA. CC BY 4.0.

Sources: IEA analysis based on EIA (2023), Natural Gas Data; Natural Gas Weekly Update.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Europe’s primary natural gas supply tightened further in Q1-Q3 2023
Europe’s total gas supply dropped by an estimated 13% (or 54 bcm)

Netherlands, with the phase-out of the Groningen field. Pipeline gas

y-o-y in Q1-Q3 2023. Lower pipeline flows from Russia, together
with the ongoing decline in domestic output and higher maintenancein Norway, depressed the availability of primary gas supply. LNG
inflows increased by 2.5% y-o-y in Q1-Q3 2023 and accounted foralmost 40% of Europe’s total gas consumption, a share similar todeliveries from North Africa declined by 2% (or 0.5 bcm) y-o-y, withflows to Iberia falling by 14% (or 1 bcm) and those to Italy rising by
3% (or 0.5 bcm). Gas flows from Azerbaijan via the Trans Adriatic
pipeline rose by 2% (or 0.2 bcm) y-o-y during Q1-Q3 2023.
Europe’s LNG imports increased by 8% (or 7 bcm) y-o-y in H1
2023. Continued demand reductions together with high storagelevels weighed on European LNG imports in Q3, leading to a
reduction of 9 (or over 3 bcm), the first decline since Russia’s
invasion of Ukraine. LNG flows from the United States increased by
6% (or 3.5 bcm). This further reinforced the position of theUnited States as Europe’s leading LNG supplier, with a 46% shareof total LNG imports. Russia’s LNG exports to Europe remained
broadly flat. According to shipping data, 80% of Europe’s total LNG
imports from Russia in Q1-Q3 2023 were delivered to Belgium,
France and Spain.

that of Russia’s piped gas before its invasion of Ukraine.
Russian piped gas exports to OECD Europe fell by an estimated
60% (or 42 bcm) y-o-y during Q1-Q3 2023. Piped deliveries to theEuropean Union dropped by almost 70% (or 38 bcm) y-o-y to a totalof 17 bcm in Q1-Q3 2023. The Ukrainian transit route accounted foraround half of the volumes supplied to the European Union.
Russian piped gas deliveries to the European Union increased by 220% (or 1.2 bcm) in Q3 compared with Q2, amid stronger flows via
TurkStream. Exports to Türkiye declined by 20% y-o-y in the firsteight months of 2023. Russian piped gas met less than 10% ofOECD Europe’s gas demand in Q1-Q3 2023. Norway’s piped gas
supplies to the rest of Europe declined by 11% (or 9 bcm) y-o-y in
Q1-Q3 2023 amid a higher level of planned maintenance andunplanned outages. Norwegian pipeline deliveries to theEuropean Union fell by 6%, while exports to the United Kingdom
plummeted by 25% (or 5 bcm). Non-Norwegian domestic production
fell by an estimated 10% (or 5.5 bcm) y-o-y in the firstseven months of 2023. The steepest declines were recorded in the

The volume of Russian piped gas supplies remains a major
uncertainty for Q4 2023. Assuming that flows to theEuropean Union continue at their current levels, Russian piped gas
deliveries to OECD Europe would drop by around 50% (or 40 bcm)
in 2023. LNG imports are expected to remain broadly flat in 2023
compared with last year amid high storage levels. A colder than

PAGE | 28

IEA. CC BY 4.0.

average Q4 could lead to higher LNG import needs.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Europe’s LNG imports switched from growth to decline in Q3 2023 amid high storage levels

Y-o-y change in bcm

Estimated quarterly change in European natural gas imports and deliveries from Norway, Q1 2021-Q3 2023
40
30
20
10
0
- 10
- 20

LNG
Others - pipeline flows
Norway - pipeline flows
Russia - pipeline flows
Total change in gas imports and pipeline deliveries from Norway

- 30
- 40

2021
Q1

2021
Q2

2021
Q3

2021
Q4

2022
Q1

2022
Q2

2022
Q3

2022
Q4

2023
Q1

2023
Q2

2023
Q3
IEA. CC BY 4.0.

PAGE | 29

IEA. CC BY 4.0.

Sources: IEA analysis based on ENTSOG (2023), Transparency Platform; Eurostat (2023), Energy Statistics; Gas Transmission System Operator of Ukraine (2023), Transparency
Platform; ICIS LNG Edge; JODI (2023), Gas World Database.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Global LNG trade grew by 3% in Q1-Q3 2023, primarily supported by US exports
Global LNG supply expanded by 3% y-o-y (or 11 bcm) in Q1-Q3
2023, measured on an import basis. This growth was primarily
supported by the United States and Algeria, together accounting for
85% of the incremental global LNG supply. The Asia Pacific region

imports rose by 2.7% y-o-y (or 3.2 bcm) in Q1-Q3 2023, largely
driven by higher LNG inflows to the Netherlands, Germany and
Italy. In contrast, LNG flows to France dropped by 16% (or 4 bcm)
in Q1-Q3 2023 amid widespread strike action in April and May. The

and Europe led LNG demand growth, increasing their LNG inflows
by 2.7% and 2.5% respectively.

commercial start-up of several new floating storage andregasification units (FSRUs) facilitated European LNG import
growth. Altogether, 30 bcm/yr of regasification capacity has been
added in Germany, Italy, Finland, the Netherlands and Türkiye
since Russia’s invasion of Ukraine. This incremental regasification
capacity allows for a more optimal inflow of LNG into the European
market and lowered the utilisation rate of the existing LNG importterminals. Overall, Europe's LNG regasification terminals saw a
64% utilisation rate in Q1-Q3 2023, compared with a rate of 75%
during the same period in 2022.

From a supply perspective, North America accounted for morethan half of incremental LNG exports, while growth from Algeria,
Mozambique and Norway also drove increased trade. The
United States saw a remarkable 8% (or 6.1 bcm in absolute terms)
y-o-y increase in its LNG output in the year to date, primarily driven
by the continued ramp-up of Calcasieu Pass and the return of theFreeport LNG export terminal to full service after a fire-induced
outage in June 2022. Algeria’s LNG exports increased by 30% (or2.8 bcm) in Q1-Q3 2023. OECD Europe have benefited from thisgrowth, absorbing more than 90% of the total LNG volumes
exported from Algeria so far this year. Mozambique’s LNG exports
contributed 2.3 bcm to global incremental supply, with the continued
ramp-up of Coral South FLNG. Additional y-o-y growth in LNG
supply was driven by Norway (up 2.3 bcm yoy), Indonesia (up1.4 bcm yoy) and Qatar (up 1 bcm yoy).

LNG imports into the Asia Pacific region increased by 2.6% y-o-yFrom a demand perspective, Europe’s LNG imports continued to
grow in H1 2023, reversing to a y-o-y decline in Q3 amid continued
gas demand reduction and high storage levels. Europe’s net LNG
PAGE | 30

IEA. CC BY 4.0.

(or 6.3 bcm in absolute terms) in Q1-Q3 2023. This was primarily
driven by China. After more than 13 months of year-on-year
declines, China’s net LNG imports started to recover in March 2023
and grew by 13% y-o-y (or 7.8 bcm) in Q1-Q3 2023. Three new
LNG import terminals have been commissioned so far this year,
namely Caofeidian Xintian LNG terminal in Tangshan city
(6.8 bcm/yr), Wenzhou LNG in Zheijang (4 bcm/yr), and Nansha
LNG in Guangzhou city (1.4 bcm/yr). China has now 27 LNG importterminals, with a total regasification capacity of 156 bcm/yr.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

In contrast, Japan’s LNG imports declined by 9% (or 6.6 bcm) inthe beginning of 2023, and South Asian buyers returned to the spot
markets via tenders, especially as demand for electricity in theregion increased with the heat waves in spring and summer 2023.
Bangladesh and Pakistan saw their LNG imports increase by 12%
and 9% respectively (or 0.6 bcm for both) y-o-y in Q1-Q3 2023.

Q1-Q3 2023, as improving nuclear availability and lower electricity
demand weighed on gas-fired power generation. Japan’s LNG
imports fell to their lowest in more than 20 years in May at 5.5 bcm(down by 19% y-o-y), as efforts to save energy and boost nuclear
power reduced gas demand. Korea’s LNG imports slightly
decreased in Q1-Q3 2023 (down 3.8% or 1.7 bcm y-o-y) due tolower gas demand, supporting high LNG inventory levels. In
contrast, Thailand’s LNG imports grew by a strong 33% y-o-y (orLNG imports in Central and South America slightly increased by
1.5% (or 0.2 bcm) y-o-y in Q1-Q3 2023. Brazil’s LNG imports
dropped by 67% (or 1.8 bcm) y-o-y in Q1-Q3 amid healthy hydroavailability and a lower gas burn in the power sector.

3.1 bcm), largely supported by the country’s declining domestic
production. Singapore’s LNG imports increased by 33% (or1.3 bcm) y-o-y in Q1-Q3 2023, supported by stable gas demand

For the full year of 2023 we forecast global LNG trade to increaseby 3% (or 18 bcm). The United States alone is expected tocontribute more than half of the incremental LNG supply andand lower pipeline supplies from Indonesia and Malaysia. India’s
LNG imports increased by 8% (up by 1.4 bcm) compared with Q1Q3 2022. Lower spot LNG prices since Q2 (below the USD 15/MBtu
threshold) spurred a positive demand response from industry andthe power sector. In April the country commissioned the Dhamra
LNG import terminal (7 bcm/yr), which adds more than 10% toIndia's existing regasification capacity. This is India's seventh LNG
import facility and the second on the east coast, along with Ennore.
According to data from PPAC, demand for regasified LNG in thefertiliser sector almost tripled in the first 8 months of 2023 comparedwith the same period in 2022, largely thanks to government
subsidies and improved connectivity for fertiliser plants in southern
India. JKM prices moderated significantly from the levels seen at

become the world’s largest LNG exporter. Additional supply is
expected from improved feed gas availability in Algeria, the start-up
of Tangguh Train 3 in Indonesia and the continued ramp-up of Coral
South FLNG in Mozambique. Demand growth is set to be largely

PAGE | 31

IEA. CC BY 4.0.

driven by Asia. China’s LNG imports are expected to increase by
16% over 2022 levels. While China’s LNG inflows are forecast to
remain below their record levels of 2021, the country is set to regain
its position as the world’s largest LNG importer. Europe’s LNG
imports are expected to remain close to last year’s levels.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

LNG demand growth is largely driven by the Asia Pacific region in 2023
LNG imports and exports by region, 2015-2023

bcm

800
600

IMPORTS
North America

400

Middle East

200

Europe0

Eurasia
Central and South America-200

Asia Pacific

-400
-600
-800

AfricaEXPORTS
2015

2016

2017

2018

2019

2020

2021

2022

2023
IEA. CC BY 4.0.

PAGE | 32

IEA. CC BY 4.0.

Source: IEA analysis based on ICIS (2022), ICIS LNG Edge.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

European natural gas prices continued to weaken in Q3 2023, while Asian and US spot prices
strengthened compared with Q2
In Asia, JKM prices increased by 15% on the quarter to an averageof USD 12.5/MBtu in Q3 2023, albeit 70% lower than the same
period last year. Emerging buying interest together with supply
uncertainty surrounding Australian LNG provided upward support toJKM prices in Q3. Asian spot LNG prices recovered their premium
over European hub prices at the end of May 2023. JKM averaged
USD 2/MBtu above TTF month-ahead prices in Q3 2023. The reemergence of the JKM premium above TTF drove LNG cargos
away from Europe. While Asia’s LNG imports grew by 6% y-o-y in
Q3, Europe’s declined by 9%.

Subdued demand, together with high storage levels, weighed on
spot gas prices in Europe in Q3. In Asia, emerging buying interestand supply uncertainty strengthened JKM prices compared with Q2.
In the United States, Henry Hub prices rose amid tighter supply–
demand fundamentals and a gradually eroding storage surplus.
In Europe, TTF spot prices declined by 8% on the quarter to an
average of just over USD 10/MBtu in Q3 2023, standing 80% below
last year’s levels. Continued demand reduction and high inventory
levels put downward pressure on European hub prices in Q3.
Despite lower price levels, volatility remained elevated. Outages in
Norway and the risk of strikes at LNG plants in Australia fuelledstrong price volatility during August and September. Historic
volatility in TTF month-ahead prices averaged 140% in Q3 2023 –its highest level since Q1 2022, when Russia’s invasion of Ukraine
drove price volatility to all-time highs. TTF’s premium over NBP
narrowed to USD 0.1/MBtu in Q3 2023 from over USD 18/MBtu
during the same period last year. The expansion of LNG
regasification capacity in Northwest Europe and lower storage
injection needs eased congestion along the EU–UK
interconnectors, which in turn tightened the TTF–NBP price spread.
NBP traded at a premium compared with TTF in September, as
lower Norwegian pipeline deliveries supported stronger price gains

In the United States, Henry Hub prices increased by 20% on thequarter to an average of USD 2.6/MBtu in Q2 2023, albeit down by
65% compared with last year’s levels. Slower domestic production
growth combined with robust gas burn in the power sector andhigher LNG exports drove the quarter-on-quarter increase in gas
prices.
According to forward curves as of the end of September 2023,
TTF is set to average just below USD 13/MBtu in 2023, with JKM
slightly above USD 13.5/MBtu and Henry Hub at USD 2.7/MBtu.
JKM prices are expected to have an average of USD 2/MBtu above
TTF in Q4 2023.

PAGE | 33

IEA. CC BY 4.0.

on the British gas hub.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Asian spot LNG prices are expected to trade above TTF in Q4 2023

USD/MBtu

Main spot and forward natural gas prices, 2020-2023
60

40

20

2022
TTF

Henry Hub

Q4

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Q4

Q3

Q2

0
2023
JKM
IEA. CC BY 4.0.

PAGE | 34

IEA. CC BY 4.0.

Note: Future prices are based on forward curves as of the end of September 2023 and do not represent a price forecast.
Sources: IEA analysis based on CME Group (2023), Henry Hub Natural Gas Futures Quotes, Dutch TTF Natural Gas Month Futures Settlements, LNG Japan/Korea Marker (Platts)
Futures Settlements; EIA (2023), Henry Hub Natural Gas Spot Price; Powernext (2023), Spot Market Data; S&P Global (2023), Platts Connect.

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Storage injections in the European Union and the United States slowed in Q3 2023
Despite slower injections in Q3, storage sites in theEuropean Union and the United States opened the 2023/24
heating season 2 with inventory levels standing well above their
historic averages. This is largely due to the above-averageinventory levels inherited from the 2022/23 winter season, and in
the case of the United States strong storage build-up over Q2.

increasingly shifted to Ukraine. The country alone accounted forover 25% of total European storage injections during August and
September. EU traders injected 2 bcm of natural gas into Ukraine’s
gas storage facilities before the start of the 2023/24 winter season.
In the United States, storage sites opened the 2023 injectionseason 43% full, standing almost 20% (or 8 bcm) above their fiveyear average. Strong growth in domestic gas production supported
above-average net injections in Q2; they were 7% (or 2 bcm) above
their five-year average at 29 bcm. The slowdown in production
growth, together with high gas-to-power demand and rising LNG
exports, depressed storage injections in Q3, which were 25% (or5.5 bcm) below their five-year average at 16 bcm. While slower
injections moderated the US storage surplus, inventory levels stillstood 5% (or 5 bcm) above their five-year average at the end of
September, reaching a fill level of 81%.

In the European Union, storage sites closed the 2022/23 heating
season with inventory levels standing 67% (or 23 bcm) above theirfive-year average as a consequence of below-average net
withdrawals during the winter. Lower primary gas supply (domestic
production and imports) led to a slower storage build-up during thegas summer. Net injections fell 22% (or 12 bcm) below their fiveyear average to a total of 42 bcm in Q2 and Q3 2023. While slower
injection rates moderated the EU storage surplus, inventory levels
still stood 12% (or 10 bcm) above their five-year average on
1 October 2023. Consequently, EU inventory levels reached 96% of
their working storage capacity by the start of the 2023/24 heating
season, 6% above the EU storage target. In Ukraine, gas inventory
levels at the end of March 2023 were estimated at 9 bcm and roseto 15 bcm by the end of Q3. As EU storage sites reached 90% of
their working storage capacity by the beginning of August, injections

In Japan and Korea, closing LNG stocks stood 29% (or 2.8 bcm)
above their five-year average in July 2023. Lower LNG imports
weighed on the LNG stocks of Japan’s largest power generationcompanies, which declined by 20% between early August and theend of September to 1.62 Mt (2.2 bcm), standing 19% below theirfive-year average.

The injection season (or gas summer) in the markets of the Northern Hemisphere refers to theperiod between 1 April and 30 September.
PAGE | 35

IEA. CC BY 4.0.

The heating season (or gas winter) in the markets of the Northern Hemisphere refers to theperiod between 1 October and 31 March.

2

Gas market update

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

120

120

100

Japan and Korea LNG stock inventorybcm

EU underground storage inventorybcm

US underground storage inventory

100

15
12

80

80

60

60

40

40

20

20

3

0

0

0

Five-year range

9

Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep

6

Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep

Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep

Five-year average

2022/23

IEA. CC BY 4.0.
Sources: IEA analysis based on EIA (2023), Weekly Working Gas In Underground Storage; GIE (2023), AGSI+ Database; IEA (2023), Monthly Gas Data Service.

PAGE | 36

IEA. CC BY 4.0.

bcm

EU and US storage sites opened the 2023/24 heating season with inventories well above theirfive-year average

Medium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

PAGE | 37

IEA. CC BY 4.0.

Medium-term market outlook

Medium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Global gas demand: Towards a slower growth trajectory
Global gas demand expanded by over 10% (or 380 bcm)
between 2017 and 2021, making it the fastest-growing source ofenergy supply. The global gas crisis triggered by Russia, together
with a weaker macroeconomic outlook, is weighing on the prospects
for natural gas. Global gas demand growth is forecast to slow
down significantly, from an average rate of 2.5% per year during
2017-2021 to 1.6% during 2022-2026. Industry alone is expecteddemand is offset by demand reductions in the industrial, commercial
and residential sectors. Gas demand for power generation declines
in 2024 and beyond. As a result, overall North American gas
demand is forecast to decline at an average rate of 0.5% per year
during 2022-2026, primarily due to lower gas burn in the power
sector amid the continued expansion of renewables. Gas use in theindustrial sector is forecast to increase at a rate of 0.5% per year,

to account for almost 60% of incremental gas demand, primarily
concentrated in the fast-growing markets of Asia Pacific and thegas-rich countries of the Middle East. Gas-to-power demandprimarily due to the expansion of gas-intensive industrial
subsectors, including fertilisers. Gas demand in the residential andcommercial sectors is set for a gradual decline amid energy

growth is expected to decelerate from an average of 2.4%
between 2017 and 2021 to 0.5%. While gas-fired power generationis still expanding in emerging markets, this growth is almost entirely
offset by demand reduction in the mature markets of Europe, North

efficiency gains enabled by retrofits.

America and Northeast Asia.
Natural gas demand in North America – the world’s largest gas
market – is set for a slow decline. Gas demand expanded by
12% (or over 115 bcm) between 2017 and 2021, primarily driven bycoal-to-gas switching dynamics in the United States and Canda. In
contrast with other regions, North American gas demand continued
to grow in 2022, rising by close to 5% (or 53 bcm) compared with
2021. This increase was largely due to the power generation sector
and the residential and commercial sectors . Gas demand is
expected to remain broadly flat in 2023, as higher gas-to-power
PAGE | 38

IEA. CC BY 4.0.

The Asia Pacific region is set to remain the driving force
behind natural gas demand growth globally, accounting foralmost 70% of incremental gas demand over the medium term. The
region’s demand for gas grew at a rate of 4% per year between
2017 and 2021, supported by economic expansion, China’s
mandated coal-to-gas switching policy and its gasification
programme. Asia’s gas consumption decreased by an estimated
2% in 2022 due to all-time high LNG prices, Covid-induced
lockdowns in China and mild weather during most of the year in
Northeast Asia. China’s natural gas consumption declined for the
first time in four decades. The Asia Pacific region’s gas demand is
expected to recover in 2023 by close to 3%, primarily supported by
China. The region’s demand is expected to expand by 20% by 2026

Medium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

compared with 2022. Demand growth is primarily concentrated in
China, India and emerging Asia, while gas demand is set to decline
in the region’s mature markets (Japan and Korea) on improving
nuclear availability and a growing share of renewables in the power

2023, primarily due to lower gas burn in the power sector amid
lower electricity demand and the continued expansion ofrenewables. OECD Europe’s natural gas demand is forecast to
decline by 8% (or over 35 bcm) during 2022-2026 and by 2026 to
stand almost 20% (or 110 bcm) below the level reached in 2021.
This decline is driven by structural factors, including more rapid
deployment of renewables and heat pumps, and energy efficiency
gains. This forecast assumes that over half of the industrial gas

sector.
Eurasian natural gas demand trends towards stagnation. The
region’s natural gas consumption rose by 13% (or 72 bcm) between
2017 and 2021, led by Russia and primarily supported by demand
growth in the industrial and power sectors. In 2022 natural gas
consumption fell by 4% amid economic contraction in Russia andmilder winter weather conditions. Natural gas demand growth isforecast to slow from an average of 3% between 2017 and 2021 to1.9% between 2023 and 2026. This moderate recovery from 2022
allows the region’s gas demand to stand just 2% above its 2021
level by 2026. Weaker economic growth in Russia and upstream
supply issues in Uzbekistan, the region’s second-largest gas
market, are limiting the prospects of gas demand growth in Eurasia.

demand lost in 2022 will not be recovered by 2026.
Natural gas demand in the Middle East is set to continue its
rapid expansion, at an average rate of 2.6% between 2022 and2026. Iran and Saudi Arabia are expected to account for around
75% of the incremental gas demand. The expansion of gasintensive industries, together with the gradual phase-out of oil
products from the power sector, is set to support this growth.
Africa’s gas demand growth is driven by its rapidly rising
population, improving energy access and economic growth. The
region’s gas demand growth is forecast to accelerate from 3%
between 2017 and 2021 to close to 4% between 2022 and 2026.
Higher gas burn in the power sector is expected to account for

Natural gas demand in Europe is set for structural decline overthe medium term. OECD Europe’s natural gas consumption
remained broadly flat between 2017 and 2021. The 2022 gas crisis
triggered by Russia deeply transformed the European market:
consumption fell by 13% (or 72 bcm), its steepest drop on record.
Lower gas use in the residential and commercial sectors, together
with plummeting industrial gas demand, accounted for the bulk ofthis reduction. Natural gas consumption is set to decline further inalmost 70% of incremental gas demand.

PAGE | 39

IEA. CC BY 4.0.

Natural gas demand in Central and South America is set for amoderate growth, primarily driven by industry. This growth is
supported by improving natural gas production prospects inArgentina and Brazil.

Medium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Global gas demand growth is set to slow by one-third over the forecast period
The evolution of natural gas demand by region, 2017-2021 vs 2022-2026

2022-262017-21

Africa- 100
Asia Pacific0Central and South America

100
Eurasia

Europe200
Middle East

North America

300

bcm

400

Net demand growth
IEA. CC BY 4.0.

PAGE | 40

IEA. CC BY 4.0.

- 200

Medium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Asia Pacific is expected to account for 70% of incremental gas demand over the medium term

200

6%

Forecast

160
4%

120
80

2%

Y-o-y change (%)

40
0%

0
- 40

-2%

- 80
- 120

-4%

- 160
- 200

2019
North America

2020
Asia Pacific

2021

2022

Eurasia

Middle East

2023
Europe2024
Africa2025

South and Central America

2026

-6%

Y-o-y change
IEA. CC BY 4.0.

PAGE | 41

IEA. CC BY 4.0.

Y-o-y change (bcm)Year-on-year change in natural gas production by region, 2020-2026

Medium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

European natural gas demand: Structural decline
The gas supply shock triggered by Russia in 2022 reinforced thestructural drivers accelerating the decline in European gas
demand over the medium term. Natural gas demand in OECDchanges all played a critical role in reducing distribution networkrelated demand. In addition, rising affordability issues contributed tolower natural gas use in households. The share of households
unable to keep their homes adequately warm rose from 6.9% in
2021 to 9.3% in 2022 – its highest level since 2015.

Europe is expected to decline by 8% (or 35 bcm) between 2022
and 2026 and stand almost 20% (or 110 bcm) below the 2021 levelby 2026. A relatively high gas price environment is set to weighon demand recovery in industry, while a more rapid deployment

Natural gas demand in the residential and commercial sectors
is set for a moderate reduction over the medium term.
Accounting for the declines this year to date, distribution networkrelated demand is expected to drop by 4% in 2023. A return toof renewables is expected to reduce the call on gas-fired power
plants. In the residential and commercial sectors, energy efficiency
gains together with more rapid installation of heat pumps are set tosecurity of energy and electricity supply in the medium term.

Residential and commercial sectors
European gas consumption fell by 13% (or 72 bcm) in 2022, its
steepest drop on record. Lower gas use in the residential andcommercial sectors (down by 15% compared with 2021) accounted
for almost half of this decline. Milder weather conditions explain justover 40% of the gas demand reduction in the residential andcommercial sectors. Non-weather-related factors were a major
driver behind this lower gas use. Gas-saving measures enacted inpublic buildings, fuel-switching in households with the option, theinstallation of heat pumps, efficiency gains and behavioural

PAGE | 42

IEA. CC BY 4.0.

average temperatures would alone increase residential andcommercial demand during 2024-2026, although more structuralchanges are set to offset this impact and weigh on natural gas use.
In the European Union, the Renovation Wave is set to improve theenergy efficiency standards of the building stock. Considering therenovation rates targeted by the European Union, direct natural gas
savings from improved energy efficiency could amount to over
0.8 bcm/yr in the period 2023-2026. Electrification of heat throughthe deployment of heat pumps is expected to further moderate
natural gas use in the residential and commercial sectors. This
forecast assumes that heat pumps could reduce natural gas
demand by over 3 bcm by 2026 compared with 2022 levels.
Considering the temperature sensitivity of these sectors, significant
demand variations can occur depending on weather conditions,which would alter the current forecast.

reduce gas use during the forecast period. Nevertheless, theflexibility provided by natural gas will remain crucial to ensureMedium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Power sector

Industry

Despite record high gas prices, European gas-to-power demandremained relatively resilient in 2022, declining by just 4% (or6 bcm). While decade-low hydro and nuclear generation
increased the call on gas-fired power plants in certain markets,
lower electricity demand together with gas-to-coal switching andstronger wind and solar power output weighed on the overall gas

Natural gas demand in industry dropped by around 20% (or30 bcm) in 2022, with all-time high gas prices driving fuelswitching and leading to reduced production rates across themost gas- and energy-intensive industries. In the European Union,
production curtailments accounted for around half of the decline inindustrial gas use, with chemicals and fertilisers being the mostaffected sectors. For instance, ammonia production dropped byclose to 25%, methanol output by 23% and urea by almost 20%.

burn in the power sector.
Gas-to-power demand is forecast to decline by over 25% (orclose to 50 bcm) in the period 2022-2026, primarily driven byaccelerated deployment of renewables and improving nuclear
availability. Gas-fired power generation is expected to drop by over
15% (or 25 bcm) in 2023 due to lower electricity demand, stronger
nuclear and hydro output and the continued expansion of wind andsolar power generation. The decline in gas-to-power demand is
projected to slow to a rate of below 5% per year during 2024-2026
amid the expected recovery in electricity demand and the continued
coal phase-out. Coal-fired power generation capacity is set to
decline by close to 25% (or over 30 GW) between 2022 and 2026,
with around 85% of the plant closures concentrated in northern andsouthwestern Europe. This in turn reinforces the role of gas-fired
power plants in providing flexible power supply and ensuring
electricity supply security in an increasingly variable renewables-

gas-intensive European industries. In 2023 gas use in industry is
expected to stay close to last year’s levels, with demand recovery inthe second half of the year offsetting the losses in H1. Industrial
sector gas use is expected to marginally recover during 2024-2026
amid an improving macroeconomic environment and healthiersupply availability. The relocation of European industries to otherregions – with a structurally lower cost of gas supply – remains amajor downside risk to industrial gas demand in Europe. As
hightlighted in a recent survey, almost a third of Germany’s
industrial companies are relocating capacity abroad or restricting
production at home, or are planning to do so, in light of the impacts

dominated power system.

of the 2022 energy crisis.

PAGE | 43

IEA. CC BY 4.0.

Our forecast assumes that more than half of the industrial gas
demand lost in 2022 will not be recovered over the medium term, as
the relatively high gas price environment weighs on the prospects ofMedium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

The expansion of renewables is set to reduce Europe’s gas demand over the medium term

500

450

400

350

300

2022

Power

Residential andcommercial

Industry

Other sectors

2026

IEA. CC BY 4.0.

PAGE | 44

IEA. CC BY 4.0.

bcm

Expected change in natural gas demand by sector, OECD Europe, 2022-2026

Medium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Russian natural gas demand: Trending towards stagnation
Russia’s invasion of Ukraine and the subsequent sanctions regime
have negatively affected the outlook for Russian gas demand overthe medium term. Following a steep decline in 2022, Russia’s

imposed following its invasion of Ukraine. Initial estimates indicatethat natural gas use in industry fell by over 7% (or more than
6 bcm) amid lower demand from the more energy-intensive andexport-oriented industrial sectors. For instance, Russia’s ammonia
production dropped by 15% (or 3 Mt) in 2022, that alone translating
into a reduction in gas demand of around 3 bcm. Gas use in theresidential and commercial sectors dropped by over 5% as
milder winter weather conditions lowered space heating
requirements. Gas burn in the electricity and heat generation
sector declined by an estimated 4% (or over 10 bcm) primarily due
to lower district heating demand. The steep decline in Russia’s gas
production (down by 12%) together with the halving of piped gas
exports to Europe weighed on natural gas use as a fuel forcompressor stations in the country’s vast transmission system.
Consequently, gas used for transport dropped by an estimatednatural gas demand is expected to grow at an average rate of 1.5%
per year during the forecast period, largely supported by theindustrial and power sectors.

Recent demand trends
Russia’s natural gas demand rose by a strong 12% (or 55 bcm)
in 2021 to reach an all-time high of 516 bcm. This particularly
strong growth was supported by a number of factors. Colder
weather conditions during the heating season led to higher gas use
in the residential and commercial sectors, including indirectly via thecountry’s vast district heating system. Recovery in economic
activity (GDP grew by 5.6%) following the Covid-related lockdownsof 2020 supported stronger demand from the country’s energy- andgas-intensive industries. Gas burn in the power sector increasedby over 10% in 2021, reflecting economic growth, colder weather
conditions and lower hydro availability in the country’s westernregions (where most of the gas-fired power fleet is located).

10% (or 4 bcm) in 2022.

Medium-term forecast
Russia’s natural gas demand is expected to remain broadly flatin 2023, as higher gas burn in the power sector is offset by thecontinued reduction in gas use in the industrial and transport
sectors. Gas demand is projected to return to growth in 2024 andexpand by 6% (or close to 30 bcm) between 2022 and 2026, largely

Following strong growth in 2021, Russia’s natural gas demand
dropped by over 5.5% (or almost 30 bcm) in 2022. This partly
reflected the country’s deteriorating commercial and industrial
activity. Russia’s GDP declined by 2.1% in 2022 amid the sanctions
PAGE | 45

IEA. CC BY 4.0.

supported by the industrial and power sectors.

Medium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Industry

Residential and commercial sectors

Natural gas demand in industry is forecast to expand by 10% (ormore than 10 bcm) in the period 2022-2026, accounting for onethird of overall demand growth. However, around 60% of industrial
demand growth is associated with the recovery following the steep
decline in 2022. Incremental gas demand is set to be driven byrising fertiliser production, primarily higher ammonia output. Russia
has set ambitious plans to develop its gas-based chemicals
industry, including a ramp-up in methanol production. Three
projects are under advanced development, with the potential to add
4.5 Mt/yr of production capacity by 2026, which could translate into
more than 4 bcm/yr of gas demand. However, these projects arefacing increasingly uncertain timelines and could be delayed
beyond our forecast horizon, amid sanctions limiting access tocapital markets and key energy technologies.

Direct gas use in the residential and commercial sectors is
projected to increase at an average of 1.5% per year during 20222026. Given the temperature sensitivity of these sectors, significant
demand variations can occur depending on weather conditions.
Demand growth in these sectors is largely supported by Russia’s
gasification programme carried out by Gazprom. Natural gas
penetration in Russia has risen significantly in recent years, from
53% in 2006 to 73% by the end of 2022. Under the current
gasification scheme more than 530 000 new households will beconnected to the gas grid in 2021-2025, with an investment of overRUB 520 billion (or USD 5.5 billion). The gasification level is
expected to increase to 75% by 2024 and to 83% by 2030.

Transport

Natural gas demand in Russia’s power sector (including heat

Natural gas use in transport is expected to expand by close to 10%(or 3.5 bcm) during 2022-2026. This is largely supported by higher
demand from the transmission system amid the gradual recovery

generation) is expected to increase at an average rate of less than
1% per year during 2022-2026, assuming average weather
conditions. This meagre growth will be partly supported by acontinued increase in Russia’s electricity demand amid graduallyin Russia’s natural gas production and the ramp-up of piped gas
exports to China via the Power of Siberia pipeline system. In
addition, Russia is set to increase the use of natural gas as a road
fuel. Gas demand for natural gas vehicles rose from 1 bcm inimproving commercial and industrial activity in the country. Nuclear
plant closures totalling 2.8 GW during 2024-2026 are expected to2020 to 1.72 bcm by 2022 and is expected to expand by close to
70% to reach over 3 bcm by 2026.

Power sector

PAGE | 46

IEA. CC BY 4.0.

provide additional market space for gas-fired power plants.

Medium-term market outlook

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Russia’s gas demand recovery is primarily led by the industrial and power sectors

520
Energy sector
own use/losses
Piped transport
NGVs

510

Gasification
programme
Incremental:
fertiliserschemicals

500
Electricity
demandgrowth490

480

DemandrecoveryLower
nuclear output

2022

Power

Industry

Residential andcommercial

Transport

Others2026
IEA. CC BY 4.0.

PAGE | 47

IEA. CC BY 4.0.

Change in bcm

Expected change in natural gas demand by sector, Russia, 2022-2026

Gas Market Report, Q4-2023

Medium-term market outlook

Improving nuclear availability and rising renewable power output is expected to reduce gas
demand in Japan and Korea
Combined gas demand in Japan and Korea is forecast to decline by
8% (or 13 bcm) between 2022 and 2026, primarily due to improving
nuclear availability and the continued expansion of renewable
power generation. Improving energy efficiency standards are
expected to further weigh on gas use in the residential andcommercial sectors. This in turn could help ease prevailing market

overall demand reduction in the forecast period, as higher nuclear
and renewable energy generation weighs on gas-fired power
output.
Japan’s nuclear power output is set to increase in the medium term.
Takahama 1 restarted full-scale operations at the end of August2023. In addition, Takahama 2 is scheduled to restart full-scale
operations in October. Including the restart of these two reactors,
12 reactors (about 11.6 GW in total) will be in operation in October.
Based on the latest publicly available information, it can betensions and enhance global gas supply security in the coming
years.

Japan

assumed that the number of restarts will gradually increase after
2023. Total operating nuclear capacity could increase to over
15 GW by 2026, weighing on coal- and gas-fired power generation,
but with high uncertainty regarding restarts and operating capacity
growth. At the same time, other factors affecting gas consumption in
the power generation sector include a decrease in electricity
demand due to energy conservation and an increase in renewable
power generation. Consequently, gas-fired generation in Japan isforecast to decline by 14% between 2022 and 2026.

Natural gas demand in Japan declined by 1% (or 1 bcm) in 2022.
While commercial and industrial city gas sales increased by 7% and
3% respectively, the decline in total gas demand was driven bysignificantly lower gas consumption in the power sector.
In 2023 Japan’s natural gas demand is expected to drop by 6% (or6 bcm) compared with 2022. This decline is primarily driven bylower gas burn in the power sector amid improving nuclear
availability. Slower economic growth is expected to weigh on gas
demand in industry, while an unseasonably mild Q1 reduced gas
use in the residential and commercial sectors, weighing on theoutlook for the full year of 2023. Japan’s gas demand is projected to
decline by 11% (or 11 bcm) by 2026 compared with 2022. Lowergas burn in the power sector alone accounts for around 80% of the
PAGE | 48

IEA. CC BY 4.0.

In particular, renewable energy has shown significant growth inrecent years and can be assumed to continue its rise. According toJapan’s 6th Strategic Energy Plan published in 2021, the share of
renewable energy in the power supply mix in FY2030 should be 3638% and the amount of electricity generated 336-353 TWh/yr, anGas Market Report, Q4-2023

Medium-term market outlook

increase of approximately 60% from FY 2021. Energy efficiency
gains and progress in energy saving in the industrial, residential andcommercial sectors all contribute to a reduction in gas consumption.

approximately 29 GW, accounting for 32% of all electricity
generation. Shin Hanul 1 started commercial operation in December
2022, and currently 25 reactors are in operation with a total capacityof approximately 25 GW. Shin Hanul 2 is scheduled to start fulloperations in Q1 2024. In addition, Saeul 3 and Saeul 4 areexpected to become operational, and total operating nuclear
capacity could increase to close to 29 GW by 2026.

Korea
Natural gas demand in Korea declined by about 1% (or 0.7 bcm) in
2022. Gas consumption for power generation fell by about 3%,
lowering overall gas demand. The industrial and city gas segments
increased, but not enough to compensate for the reduction in power

At the same time, the amount of renewable power generation is
also expected to increase significantly over the medium term.
Consequently, gas-fired power generation in Korea is forecast to
decline by about 10% between 2022 and 2026. According to the10th Basic Energy Plan, the share of renewable power output in
total power generation should increase to about 22% in 2030, withthe share of gas-fired power supply at approximately 23%. It is
assumed that the consumption of city gas segments will increaseslightly towards 2026. However, this will not be enough tocompensate for the decline in power generation.

generation.
Korea’s gas demand in 2023 is expected to decrease by about 2%
compared with 2022. This is mainly due to a decline in power
generation as nuclear and renewable generation increase, but also
due to lower gas use in city gas segments.
Korea’s gas demand is projected to decline by 4% (or 2 bcm) by
2026 compared with 2022. Nuclear power and renewable energy
output are expected to continue growing, which will reduce the callon coal- and gas-fired power plants.

PAGE | 49

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In January 2023 Korea announced plans to increase nuclear power
generation through the 10th Basic Energy Plan. According to theplan, in 2030 nuclear power capacity is expected to reach

Gas Market Report, Q4-2023

Medium-term market outlook

Combined natural gas demand in Japan and Korea is expected to decline by 8% over the
medium term
Natural gas demand, and nuclear and renewable power generation, Japan and Korea, 2022-2026

PAGE | 50

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IEA. CC BY 4.0.

Gas Market Report, Q4-2023

Medium-term market outlook

China is expected to account for nearly half of medium-term global gas demand growth
China is set to remain the key driving force behind global gas

away from gas. As a result, while Chinese economic growth slowed
to a rate of approximately 3%, the industrial sector’s gas demandfell by approximately 2%. However, with Covid-related lockdowns
easing and price pressures softening since late 2022, industry’sgas demand is back on track and expected to grow by 8% indemand growth over the medium term, accounting for 48% ofincremental gas demand during 2022-2026.
Following its first decline in four decades in 2022, China’s natural
gas demand returned to a clear path of recovery over the firsteight months of 2023. Demand growth is expected to remainstrong at an average of 8% per year during 2022-2026, althoughbelow the 11% growth rate experienced between 2017 and 2021.
Slower economic expansion, together with relatively high gas pricelevels and accelerated deployment of renewables, is set tomoderate China’s natural gas demand growth over the short tomedium term.

2023, accounting for half of this year’s demand growth.
Industry is set to continue its multi-year trend as the primary driverof natural gas demand growth in China, accounting for 40% of its
incremental gas demand from 2022 to 2026. A slowing of GDP
growth compared with recent years has led to a downward revisionin the demand outlook, but continued economic recovery is
expected to drive industrial sector gas demand which is expected to
expand by 40% by 2026 compared with 2022. However, thesector’s gas demand outlook remains uncertain as a state-led policy
push aiming to replace coal with natural gas in industry is met by
the reality of price uncertainty and a focus on ensuring “reliable

Industry
The industrial sector has been the longstanding driver of demandin the Chinese gas market, accounting for nearly 40% of overall gas
demand in recent years and almost half of total demand growthenergy supplies”.

during 2017-2021.

Power sector

In 2022 gas demand in industry was hampered by a combination offactors. Strict Covid restrictions remained in place until December,
acting as a brake on overall economic activity. All-time-high gas
prices further softened industrial output and spurred fuel switching
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Power generation is only the third-largest gas demand sector in
China, but accounted for close to one-fifth of incremental demandduring 2017-2021. Growth of over 40% in installed gas-fired
capacity over this period facilitated average annual growth of 9% inGas Market Report, Q4-2023

Medium-term market outlook

power sector gas burn. Still, the share of natural gas in the powermix has grown more slowly than renewables, reaching only 3% ofChina’s total power production in 2022, far behind the more than

LNG supply capacity comes online in 2026 could spur growth inprice-responsive demand segments, notably in the power sector.

Residential and commercial, and transport

60% share held by coal.

Gas use in the residential and commercial sectors grewstrongly during the 2017 to 2021 period, boosted by the longstanding policy to replace domestic coal-fired boilers – notably
across China’s northern provinces – as part of an action plan to

In 2022 gas use for electricity generation fell by 10%, squeezed
by high gas prices and record renewable capacity additions.
However, recovery in electricity demand and restricted hydro output
due to historic heatwaves in the spring have led China’s power
sector gas demand to register strong growth in the firsteight months of 2023. Improved gas plant economics – thanks to asteep decline in gas prices compared with 2022 – are also expected
to lead to power sector gas burn growth of 12% (or 8 bcm) for thefull year of 2023.

improve air quality through reduced pollution. However, as theshare of coal in domestic applications falls and cost considerations
weigh on targeted subsidies aimed at favouring gas, growth inresidential and commercial gas demand is expected to slow inthe short to medium term, averaging 5% during 2022-2026. Still,incremental demand in the sector reaches 18 bcm, supported by
the continued expansion of gas transmission and distribution

Growth in gas-fired power generation is expected to average atover 12% per year between 2022-2026. Wind and solar capacity
additions are expected keep the share of renewables in the powermix on a strong growth path, partially conditioning the upside to gas
for power generation.

systems.
Transport sector gas demand is set to grow by an average of 6%
per year, buoyed by gas transmission network use and roadIn the context of slower economic expansion and a high gas priceenvironment, potential downside risk remains as an emphasis on
ensuring energy security and stabilising economic growth could
outweigh government policy on coal-to-gas switching, which wasamong the key factors behind gas market dynamism in past years.
However, loosening global gas market fundamentals as a wave of

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transport. Taken together, transport, residential and commercial
demand are expected to account for 22% of total Chinese gas
demand growth over the 2022-2026 period.

Gas Market Report, Q4-2023

Medium-term market outlook

China’s natural gas demand growth is set to slow over the forecast period

Forecast

500
450
400
350
300
250
200
150
100
50
0

2019

2020

2021
Industry

2022

2023

Residential and commercial

2024
Power generation

2025

2026

OthersIEA. CC BY 4.0.

PAGE | 53

IEA. CC BY 4.0.

bcm

Natural gas demand by sector, China, 2019-2026

Gas Market Report, Q4-2023

Medium-term market outlook

India and emerging Asian gas markets: Price-sensitive growthAdverse gas market conditions in 2022 drove a contraction in gas
demand in India and emerging Asian markets 3 – down by 6% and
4% respectively – as all-time-high gas prices particularly hit gas
consumption in the power and industrial sectors. While a recovery
in overall demand is already underway in 2023, thanks in part toalthough notably smaller than industrial demand, also remains a key
driver of price-responsive demand in India.
Total demand fell by 6% in 2022 as a tight global gas market
reduced power sector gas burn by nearly a quarter and abruptly
slowed industrial demand growth to just 2%. In 2023 gas demandhas started to recover, driven by gains in both the industrial andpower sectors as lower prices have eased pressure on pricesensitive segments of the economy. Natural gas demand islower LNG import prices, diverging factors will drive the recovery inthe short to medium term across these markets.

India

expected to grow by 4% in 2023.

Following a steep decline in 2022, India’s natural gas demandis forecast to return to a growth trajectory, supported by apositive economic outlook, improving gas supply availability andcontinued gas market opening reforms. The Petroleum and Natural
Gas Regulatory Board (PNGRB), the downstream regulator, set alevelised unified tariff for domestic natural gas pipelines startingfrom 1 April 2023. The new tariff system will benefit consumers
located far from domestic gas supply sources and/or LNG terminals.

India’s natural gas demand is set to grow by an average annual rateof over 8% in the 2022-2026 period, adding over 20 bcm ofincremental demand. Industry is set to remain the largest
contributor to this growth, accounting for close to 40% of the total
increase. A positive economic outlook (GDP growth is expected toaverage close to 7% per year during 2023-2026) and priority
allocation for certain industrial segments will help the largest gasconsuming sectors rebound from lacklustre growth in 2022-2023.
The fertiliser sector is set to be a key driver behind India’s growing
industrial gas demand, as the country aims to phase out urea
imports by the end of 2025. India’s conventional urea production

The Indian natural gas market is heavily skewed towardindustrial demand, which accounted for over 70% of net
incremental gas demand during 2017 to 2021 and represented overhalf of annual demand in 2022. Gas demand for power generation,

Bangladesh, Indonesia, Malaysia, Myanmar, Pakistan, Philippines, Thailand and Viet Nam.

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3

Gas Market Report, Q4-2023

Medium-term market outlook

capacity is expected to increase by over 6 Mtpa by 2025, which

Dynamic economic drivers and population growth point to robust
short-term demand fundamentals in emerging Asia. Natural gas
demand is forecast to grow at an average rate of 5% per year
between 2022 and 2026, with over 50% of incremental demand
concentrated in Bangladesh, Pakistan and Thailand. This comes on
the back of a severe demand contraction in Bangladesh andcould translate into almost 5 bcm of incremental gas demand.
Following its steep decline in 2022, gas-to-power demand is
expected to recover during the forecast period. Preliminary data
indicate that gas burn in the power sector rose by to 20% y-o-y in
the first eight months of 2023 amid more favourable natural gas
price levels. Despite continuing renewable capacity additions, gasto-power demand is expected to grow at an average of 15% peryear between 2022 and 2026 as capacity factors improve at existing

Pakistan in 2022 given their strong sensitivity to imported gas
prices.
Growing electricity requirements across the region and policy
support in key markets to limit greenhouse gas emissions should
lead to increased gas penetration in electricity production, even as
renewable power investments progress, placing the power sector as
the primary driver of gas demand growth. Gas use for power
generation accounts for nearly 60% of incremental consumption
over the forecast period, and nearly 70% of this power sector uptick
is concentrated in Thailand, Pakistan, Indonesia and Malaysia.

gas plants in response to growing power demand.
Development of the distribution network and a continued push tofavour gas in household applications are expected to drive
average annual growth of 7% in residential and commercial gas use
during 2024-2026.

Emerging Asia

Industrial demand – led by fertilisers and light industry – makes up
the bulk of the remaining gas demand growth in the outlook period,
with the biggest increments expected in Bangladesh, Indonesia,
Malaysia, Pakistan and Thailand. Residential and commercial
demand, along with transport applications, make relatively minor

Natural gas demand across emerging Asian markets remained
broadly stable in the period 2017 to 2021. The power sector
accounted for approximately half of total gas demand in this period,
while the industrial sector has been the one to counter the trend ofstagnating demand. In 2022 high gas prices hit the power sector,

gains.

trimming gas demand for electricity generation by 6%. A morefavourable price environment is expected to support a 3% rebound

PAGE | 55

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in 2023, a precursor to the growth expected in the medium term.

Gas Market Report, Q4-2023

Medium-term market outlook

Natural gas demand in India and emerging Asia is set to expand by over 20% during 2022-2026
Forecast

350
300
250
200
150
100
50
0

2019

2020
India

2021
Thailand2022
Indonesia

2023
Malaysia

Pakistan

2024

2025

2026

Bangladesh

Other emerging Asian markets
IEA. CC BY 4.0.

PAGE | 56

IEA. CC BY 4.0.

bcm

Natural gas demand, India and emerging Asia, 2022-2026

Medium-term market outlook

Gas Market Report, Q4-2023

Global gas production growth is set to slow in the medium term
Natural gas production is expected to expand by close to 6%(or 240 bcm) by 2026 from 2022. North America and the Middle
East are forecast to account for almost 80% of the net increase in

expanding LNG liquefaction fleet, with the region’s LNG exports
expected to increase by 50% (or 55 bcm) 2023 and 2026.
In Eurasia, natural gas production fell by 10% (or over 90 bcm) in
2022 due to the steep drop in Russia’s piped gas supplies toEurope and continued declines in Kazakh and Uzbek gas

global gas output during this period, while Russia’s natural gas
production is set to remain well below the record levels reached in
2021. The feedgas supply requirements of LNG export projects areforeseen to account for over 55% of the net increase in global gas

production. The downward trend continued in the first eight monthsof 2023, with Russia’s gas output down by 10% (or almost 45 bcm)
y-o-y and Uzbekistan recording a similar 10% decline (3 bcm) amid
deteriorating upstream activity in the country. Eurasian gas
production is expected to recover from its 2023 lows and grow at an
average rate of 2.5% per year in 2023-2026, primarily driven byexport-oriented projects in Russia and Turkmenistan aimed at
China. Despite the gradual recovery in Russian production, output

output in the forecast period, reflecting strong growth in LNG trade
and an increasingly globalised gas market.
In North America, natural gas production rose by 4% (or close to
50 bcm) in 2022, driven by strong domestic demand growth and thecontinued ramp-up of of LNG exports from the United States. Shalegas output in the United States grew by an impressive 5% (or40 bcm), driving up overall US gas production to over 1 tcm for the
first time in the nation’s history. This strong growth continued during
Q1-Q3 2023, when North America’s gas output increased by an
estimated 4% (or 30 bcm) y-o-y, primarily supported by expanding
upstream activity in the vast shale plays of the United States.
Natural gas production growth in North America is expected toslow during the forecast period to 1.8% per year during 20232026. This moderate growth trajectory is reflective of declining
domestic gas demand in Canada and the United States. The bulk of
incremental gas supply is set to feed North America’s rapidly

is expected to remain 11% (or 85 bcm) below 2021’s record levels.

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In the Middle East, natural gas output rose by an estimated 3% (or20 bcm) in 2022, primarily driven by expanding gas demand in theindustrial and power sectors of Iran and Saudi Arabia. The region’sgas production is expected to expand by close to 15% (or100 bcm) by 2026 compared with 2022. This strong growth islargely supported by the growing domestic demand in Iran andSaudi Arabia, as well as export projects in Israel and Qatar. The
North Field East expansion in Qatar is set to increase thecountry’s LNG export capacity by over 40%, requiring almostMedium-term market outlook

Gas Market Report, Q4-2023

50 bcm/yr of additional feedgas supply by 2026-27. In Iran, the bulkof incremental supply is set to be met by the rising output from thegiant South Pars field. Phase 11 of the South Pars field started
producing gas in August 2023, with initial output estimated at

Following a 4% increase in 2022, Europe’s natural gas production
is set to resume its decline over the medium term and drop by 7%(or close to 15 bcm/yr) by 2026 compared with 2022, as theincrease in natural gas output in Eastern European markets

4-5.5 bcm/yr and the potential to ramp up production close to
20 bcm/yr in the coming years. In Saudi Arabia, production is
supported by the ramp-up of the North Arabia field, the expansion ofSouth Ghawar and the start-up of the Jafurah field towards the endof the forecast period. In Israel, the expansion of the Leviathan
and Tamar fields, together with the start-up of the Karish field, areexpected to add over 15 bcm/yr of gas supply by 2026. This willallow Israel to further increase its piped gas deliveries to(Romania and Türkiye) proves insufficient to offset the declines
projected in Northwestern Europe. Africa’s natural gas production
dropped by close to 6% in 2022 amid lower output in Algeria, Egypt
and Nigera. Production is set to expand by 10% (or 25 bcm/yr) by
2026, primarily driven by Algeria, Congo, Egypt, Mozambique andNigeria. Around 60% of this additional supply is expected to feed
Africa’s expanding LNG liquefaction fleet, which is set to grow by
25% by 2026.

neighbouring markets, including Egypt and Lebanon.

In Central and South America natural gas output grew by 3% in
2022, supported by Argentina, Peru and Trinidad and Tobago. Gas
output is projected to remain broadly flat over the forecast period.
Production growth will be supported by Argentina, where thedebottlenecking of the Vaca Muerta shale play should allow output
to expand by 20% (or 10 bcm) by 2026. Pre-salt developments in
Brazil will support moderate growth in sales gas production, while
reinjection is set to expand further to stimulate oil production overthe forecast period. In Trinidad and Tobago, gas output is projected
to remain broadly stable. Additional supply from the ramp-up of the

Natural gas production in the Asia Pacific region rose by a mere
1% in 2022 and is expected to expand by 5% (or 35 bcm) by 2026
compared with 2022. Most of the region’s growth is concentrated in
China, where domestic production is projected to increase by morethan 15% from 2022 levels to reach 250 bcm in 2025. India’s
natural gas production is foreseen to grow at a rate of 4% per year
over the forecast period, adding over 10 bcm of gas supply by 2026.
Australia’s gas production is expected to remain broadly flat,
averaging 150 bcm/yr over the medium term. Most other producers
in the region are set to experience production declines over theforecast horizon, paving the way for higher LNG import needs.

PAGE | 58

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Colibri and Matapal fields, and the start-up of the Cypre field in
2025, are expected to be largely offset by declines in the country’s
ageing fields. The region’s other large producers, including Bolivia,
are set to further reduce their gas output over the medium term.

Medium-term market outlook

Gas Market Report, Q4-2023

North America and the Middle East drive global gas supply expansion over the medium term

200

6%

Forecast

160
4%

120
80

2%

Y-o-y change (%)

40
0%

0
- 40

-2%

- 80
- 120

-4%

- 160
- 200

2019
North America

2020
Asia Pacific

2021

2022

Eurasia

Middle East

2023
Europe2024
Africa2025

South and Central America

2026

-6%

Y-o-y change
IEA. CC BY 4.0.

PAGE | 59

IEA. CC BY 4.0.

Y-o-y change (bcm)Year-on-year change in natural gas production by region, 2019-2026

Medium-term market outlook

Gas Market Report, Q4-2023

Upstream developments in the United States: Export-oriented growth
US natural gas production is expected to expand by 7% (orover 70 bcm) by 2026 compared with 2022, largely driven by the
ramp-up of LNG exports into the global gas market and higher

Export-oriented projects drive US production growth
US natural gas production growth is set to slow in the medium
term from an average growth rate of 4% per year between 2018 and2022 to 1.5% per year between 2022 and 2026. This slower growth

piped gas deliveries to Mexico. Incremental supply is principally met
by associated shale gas production, led by the Permian Basin. In
contrast, conventional gas production is set to continue to decline
over the forecast period. Shale gas is expected to account foris reflective of declining US domestic gas consumption and isentirely driven by a combination of the country’s rapidly expanding
LNG exports and the continued ramp-up of piped gas deliveries tonearly 80% of total US gas production by 2026.

Mexico.

US gas production continued to expand strongly in 2023

Domestic demand for natural gas in the United States is
expected to drop by 2% (or 20 bcm) during 2022-2026. Natural
gas use in the residential and commercial sectors is projected to
decline at a rate of 1% per year amid efficiency gains and thegradual deployment of heat pumps. Natural gas demand inindustry is expected to grow at an average rate of almost 1% per
year, supported by the expansion of gas-intensive industries.
Following strong growth in recent years, gas burn in the power
sector is forecast to decline by 8% (or over 25 bcm) during 20222026, amid the rapid expansion of renewable electricity sources.
Consequently, gas-fired power generation is projected to lose its
position as the largest source of electricity supply to renewables
towards the end of the forecast period.

Following the setback caused by the pandemic in 2020, natural gas
production in the United States has been steadily increasing from its
2019 level of 970 bcm and surpassed 1 tcm in 2022 to end at
1 020 bcm. While the Appalachian Basin remains the largest sourceof supply, with a share of 30% of total production, the lack ofadditional takeaway pipeline capacity in 2022 resulted in a
production slowdown and flat production rates during Q1-Q3 2023.
In contrast, associated gas production rose by over 10% (or 9 bcm)
in the Permian Basin and increased by close to 13% (or 10 bcm) in
the Haynesville Shale. Altogether, US gas production is expected toincrease by 5% (or 35 bcm) in 2023. This growth is largely driven by
the continued expansion of LNG exports, stronger piped gas
deliveries to Mexico and higher gas burn in the power sector.

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While US domestic demand is expected to decline, natural gas
exports are set to increase strongly over the medium term. US LNG

Medium-term market outlook

Gas Market Report, Q4-2023

exports are expected to increase by 60% (or 65 bcm/yr) by 2026
compared with 2022. This strong growth will be supported by thebuild-up of new LNG liquefaction capacity, primarily in Louisiana
and Texas. This includes the Plaquemines LNG Phases 1 and 2

improving gas-to-oil ratios. Additional takeaway capacity will be key
to debottlenecking the Permian Basin. Expansions to the Gulf Coast
Express, Permian Highway and Whistler pipelines are set to add
17 bcm/yr of takeaway capacity by the end of 2023. The Matterhorn
Express pipeline project (26 bcm/yr) is expected to enter service in
2024. Natural gas ouput in the Appalachian Basin is projected toincrease by 6% (or 20 bcm) between 2022 and 2026, enabled by
the start-up of the Mountain Valley Pipeline (21 bcm/yr), which is(27 bcm/yr), Golden Pass LNG (21 bcm/yr) and the Corpus Christi
Liquefaction Stage 3 (13.7 bcm/yr) projects. In addition, piped gas
deliveries to Mexico are set to expand by 20% during 2022-2026,
partly driven by new LNG export terminals in Mexico relying on US
feedgas supplies, including the Energía Costa Azul LNG project(4.4 bcm/yr) and Altamira FLNG (5.5 bcm/yr). Incremental pipedgas deliveries to Mexico should be supported by the North Baja
Xpress expansion project in 2023 (5 bcm/yr) and the Southwest
Gateway pipeline (13.5 bcm/yr) expected to come online in 2025.
Imports from Canada are set to decline over the medium term,
although they will remain key to meeting seasonal demand swings.

expected to start operations in 2024. Other shale gas production is
projected to increase by close to 15% (or 50 bcm) during 20222026. In contrast, conventional natural gas production is forecast to
decline by over 15% (or 30 bcm) during the forecast period.
Consequently, the share of shale gas in total US gas output is
expected to increase from 80% in 2022 to over 85% by 2026.

The rise of certified natural gas

Additional takeway capacity from the Appalachian and Permian
Basins will be key to production growth over the medium term

A rising proportion of US natural gas output is receiving third-party
certification. According to industry surveys, close to 30% of US
gas production in 2022 was certified for its performance against
certain environmental, social and governance metrics. This share is
expected to rise over the medium term, with several US producers
setting ambitious targets to reduce the emissions intensity of theiroperations. EQT Corporation – the largest US gas producer – aims
to reach net zero emissions for Scope 1 and 2 in its production

Natural gas production growth is primarily enabled by
upstream developments in the country’s vast shale plays, andin particular by the ramp-up of associated petroleum gas. The
Permian Basin is expected to be the largest source of incremental
supply, with its natural gas production expected to expand by 20%(or 30 bcm) between 2022 and 2026. This strong growth will besupported by the continuing light tight oil developments and

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segment by 2025.

Medium-term market outlook

Gas Market Report, Q4-2023

Strong growth in LNG exports and piped gas supplies to Mexico drive US natural gas
production over the medium term

1 150

1 100

1 050

1 000

950

900

2022

LNG exports

Net piped gas exports

Domestic demand

2026
IEA. CC BY 4.0.

PAGE | 62

IEA. CC BY 4.0.

Y-o-y change in bcm

Key drivers of natural gas production growth, United States, 2022-2026

Medium-term market outlook

Gas Market Report, Q4-2023

The Appalachian and Permian Basins are set to support the expansion of US natural gas
production
bcm

Dry natural gas production by main source, United States, 2016-2026

1 200

Forecast

1 000

800

600

400

200

0
2016

2017

2018

Appalachian Basian

2019

2020

2021

Other gas-focused plays

2022

Permian Basin

2023

2024

Other oil-focused plays

2025

2026

Other dry gas
IEA. CC BY 4.0.

PAGE | 63

IEA. CC BY 4.0.

Sources of historical data: IEA analysis based on EIA (2023), Natural gas production.

Medium-term market outlook

Gas Market Report, Q4-2023

Under pressure: Russia’s natural gas production has collapsed since its invasion of Ukraine
Russia’s invasion of Ukraine and the consequent break-up of its
decade-long ties with the European market are having profound
implications for its gas production and upstream developments overcontributed to the bulk of the downward flexibility displayed in 2022.
In contrast with Gazprom, Novatek – Russia’s second-largest gas
producer – increased its gas production by close to 3% amid higher
LNG exports. As Russia’s third-largest gas producer, Rosneft saw
its natural gas production grow by an estimated 15% as thecompany continued to ramp up new upstream projects and expand
its sales to Russian end consumers (primarily industrial players).

the medium term. The country’s natural gas output in 2023 is
expected to drop to its lowest level since 2009, putting pressure on
upstream operations and potentially leading to production shut-ins
at ageing, vulnerable fields. Russia’s gas production is expected to
expand by 9% by 2026 and to remain 11% (or 85 bcm) below therecord levels reached in 2021. This reflects Russia’s limited options
for finding new export outlets over the medium term to replace theRussia’s natural gas production fell by close to 10% (or almost
45 bcm) in the first eight months of 2023 amid deteriorating
piped gas exports to Europe. Gazprom accounted for virtually all thedecline, with its natural gas output dropping by 22% (or 65 bcm),
while both Novatek and Rosneft countinued to increase theirproduction. As a consequence, Gazprom’s share of Russia’s total
gas production fell from 68% in 2021 to 55% in the firsteight months of 2023.

volumes once sent to the European market. Altogether, this year’s
forecast foresees a cumulative production loss of over 600 bcm forthe 2023-2026 period compared with our pre-war medium-term
outlook.
Russia’s natural gas production dropped by 12% (or 90 bcm) in
2022 – its steepest decline in history. This was primarily driven by
the sharp reduction in piped gas exports to Europe (down by
over 80 bcm) and lower domestic demand (down by 30 bcm) amid
the country’s worsening macroeconomic performance. Gazprom
bore the brunt of the decline, recording a drop of 20% (or over
100 bcm) in its natural gas output. Gazprom’s giant, flexible swing
fields located in Western Siberia and the Yamal peninsula (including
Zapolyarnoe, Urengoyskoe, Yamburgskoe and Bovanenkovo)

For the full year of 2023, the country’s natural gas output is
expected to decline by 8% (or over 50 bcm) to its lowest level
since 2009. This will naturally require further downward flexibility
from Russia’s upstream activities, including at the more vulnerable,

PAGE | 64

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ageing fields in the Nadym Pur Taz (NPT) region, which could
potentially face production shut-ins.

Medium-term market outlook

Gas Market Report, Q4-2023

Gazprom bore the brunt of the Russia’s gas production decline in 2022

Y-o-y change in bcm

Year-on-year change in natural gas production by key companies, Russia, 2021-2022
750

700

650

600

550

500

2021

Gazprom

Novatek

Rosneft

Others2022
IEA. CC BY 4.0.

PAGE | 65

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Sources: IEA analysis based on various company reports.

Medium-term market outlook

Gas Market Report, Q4-2023

No relief: Russia’s upstream gas sector faces a bleak medium-term outlook
This forecast takes a conservative view on Russia’s LNG
project developments, considering the financial and technologicaluncertainties due to the sanctions imposed on Russia following its
invasion of Ukraine. Arctic LNG Train 1 (8.9 bcm/yr) is expected tostart up at the end of 2023, although uncertainties remain around its
ramp-up schedule and initial utilisation rates. The start-up of Train 2
is expected to be delayed to 2025, with production ramping up
during 2025-2026. The commissioning of Train 3 is assumed to bedelayed beyond our forecast horizon.

Russia’s natural gas production is forecast to grow at a rate ofclose to 3% per year between 2023 and 2026, primarily supportedby the continued expansion of piped gas deliveries to China, higher
LNG exports and a gradual recovery in domestic gas demand. The
ramp-up of gas fields in Eastern Siberia and the Far East is
expected to account for close to 40% of Russia’s net production
growth over the forecast period.
The European Union’s decision to phase out Russian gas imports
as soon as possible primarily affects upstream developments in
Western Siberia and the Yamal peninsula. This is reflected in
Gazprom’s amended ten-year strategy for the period 2024-2033,
which no longer considers Europe to be a strategic market. The
start-up of the Kharasavey field (32 bcm/yr nameplate capacity)
was delayed from 2023 to 2024 while the ramp-up of production
rates remains uncertain. The planned expansion of the giant
Bovanenkovo field from its current 115 bcm/yr nameplate capacity
to 140 bcm/yr faces an uncertain future amid the lack of export
outlets and is expected to be delayed beyond our forecast horizon.
Similarly, the supergiant Tambey field – previously planned to start
up in 2026 – is foreseen to be delayed. The field was expected tofeed the planned Baltic LNG project (18 bcm/yr), which is stalled
following the withdrawal of western engineering and construction
service providers.

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In Eastern Siberia, the Chayandinskoye field is set to reach its
nameplate capacity of 25 bcm/yr by 2024, enabling the ramp-up ofgas supplies to China via the Power of Siberia pipeline. The
Kovyktinskoye field was officially commissioned and connected to
the Power of Siberia pipeline system at the end of 2022. The
continued ramp-up of the two fields will allow Russia to increase its
piped gas exports to China to 38 bcm/yr by 2025 via Power ofSiberia. In addition, Gazprom signed a 25-year agreement with
China’s CNPC to supply 10 bcm/yr of piped gas via the “FarEastern route”. The expected resource base is the YuzhnoKirinskoye field, which has a design capacity of 21 bcm/yr. The
field is set to be commissioned by 2025 and produce an initial
5 bcm/yr. The Power of Siberia 2 project (50 bcm/yr) is notexpected to be commissioned over the forecast period due to thelack of a long-term offtake agreement with Chinese buyers.

Medium-term market outlook

Gas Market Report, Q4-2023

Russia’s natural gas production is expected to remain 85 bcm below its 2021 levels by 2026

Y-o-y change in bcm

Natural gas production, Russia, 2019-2026
770

Forecast

700
630
560
490
420
350
280
210
140
70
0

2019

2020
Gazprom

2021
Novatek

2022
Rosneft

2023
Others

2024

2025

2026

Russia - total natural gas production
IEA. CC BY 4.0.

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IEA. CC BY 4.0.

Sources of historical data: IEA analysis based on various company reports.

Medium-term market outlook

Gas Market Report, Q4-2023

Europe’s natural gas production is set to continue to decline over the medium term
Europe’s natural gas production is expected to continue to decline
over the medium term, despite renewed interest in upstream
developments in some key markets after Russia’s invasion ofand gas production in the North Sea could provide upside potential
to the current forecast. In the Netherlands, the giant Groningen
field ceased production on 1 October 2023, marking the end of its

Ukraine. OECD Europe’s natural gas production has dropped by
33% (or 90 bcm/yr) since 2010, leading to a higher reliance on
imports, including (initially) from Russia. The Netherlands and theUnited Kingdom accounted for over 90% of the net decline. This

phase-out which started in 2018 due to earthquakes caused byproduction from the field. Production from small fields is expected tocontinue to decline over the forecast period, leading to an overall
decrease of over 40% (almost 10 bcm) in Dutch natural gas output

downward trend was temporarily reversed in 2022, when European
gas production rose by 4% (or 6 bcm) amid the gas crisis triggered
by Russia. European gas output returned to its downward trajectoryby 2026 compared with 2022.

in 2023, with production down by 4% (or 3.5 bcm) in the first eightmonths of the year on higher maintenance in Norway and lower UK
and Dutch output.
Europe’s natural gas production is forecast to drop by 7% (orclose to 15 bcm/yr) by 2026 compared with 2022, as the increasein natural gas output in Eastern European markets is not sufficient
to offset the declines projected in Northwestern Europe. Norway is
set to remain the backbone of European gas production, withthe country’s natural gas output expected to remain broadly flat andaverage 125 bcm/yr between 2023 and 2026. In the
United Kingdom, ageing gas fields in the North Sea are expected
to reduce the country’s natural gas output by over 30% (or morethan 10 bcm) by 2026 compared with 2022. The government’s planannounced in July 2023 to grant more than 100 new licences for oil
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In Denmark, the Tyra gas field has been under redevelopment
since September 2019 and is expected to restart production in the2023/24 heating season, with a capacity of 2.8 bcm/yr. In Romania,
the Midia Gas Development Project started producton in 2022 andis set to ramp up gas supplies to 1 bcm/yr during 2023-2026.
Project partners took FID in June 2023 on the development of the
Neptun Deep offshore gas field in the Black Sea. First gas is
expected in 2027, beyond our forecast horizon, and production
could reach 8 bcm/yr at plateau. According to industry estimates,
Italy could potentially double its 3.4 bcm/yr gas output by 2025 by
optimising production at existing fields and by accelerating thedevelopments of already licensed projects. In Türkiye, the giant
Sakarya gas field was commissioned in April 2023. Natural gas
production is expected to ramp up to 3.6 bcm/yr during the firstphase in 2023-2025, and then to close to 15 bcm/yr during thesecond phase after 2026.

Medium-term market outlook

Gas Market Report, Q4-2023

Europe’s natural gas production is expected to decline by 7% by 2026 compared with 2023

bcm

Natural gas production, OECD Europe, 2019-2026
240
Forecast
200

160

120

80

40

0

2019

2020
Norway2021

2022

European Union

2023

United Kingdom

2024

2025

2026

Republic of Türkiye
IEA. CC BY 4.0.

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IEA. CC BY 4.0.

Sources of historical data: IEA analysis based on Eurostat (2023), Energy statistics.

Medium-term market outlook

Gas Market Report, Q4-2023

Waking the Dead Cow: Vaca Muerta is set to drive Argentina’s gas production growth
Argentina’s natural gas production is expected to expand by
over 20% (or 10 bcm) between 2022 and 2026 as the continued
decline in convential gas production is more than offset by thegas share is expected to rise to close to 45% of Argentina’s total
gas output.
The strong increase in natural gas production in the Vaca Muerta
shale play has led to takeaway constraints in recent years,
necessitating the building of new pipeline systems. The first phaseof the Néstor Kirchner Gas pipeline was commissioned in July
2023, stretching 573 km from Vaca Muerta to Buenos Aires. The
pipeline’s initial capacity is 4 bcm/yr, to be expanded to 8 bcm/yr by
the end of 2023 through the addition of compressor stations. The

country’s rapidly growing shale gas output. This growth is primarily
supported by the debottlenecking of the Vaca Muerta shale play
and will allow Argentina to reduce its natural gas importrequirements over the medium term.
Argentina’s domestic gas supply has undergone a profoundtransformation since 2012, when the first development activity
started in Vaca Muerta, the world’s second-largest shale gas
deposit. Argentina’s conventional natural gas production
declined by over 40% (or 15 bcm/yr) between 2014 and 2022 amid
declining output from ageing fields. This decline was more thansecond phase will allow gas deliveries to reach San Jeronimo in
Santa Fe province, while the overall transmission capacity of thepipeline system will be expanded to around 16 bcm/yr. The higherdeliveries to the coastal area, made possible by the pipeline, are set
to reduce Argentina’s LNG import requirements in the coming
years. The financing for the construction of the second phase wassecured by the end of 2022 and commissioning is expected in thefirst half of 2024. In addition, Argentina plans to reverse flows

offset by the country’s rapidly growing unconventional gas
production, leading to an increase of 2% per year in the country’s
total gas output between 2014 and 2022. Shale gas supply –primarily from Vaca Muerta – expanded from almost zero in 2014 to
18 bcm in 2022. In addition, tight gas production more thandoubled during the same period, expanding by close to 5 bcm. As aconsequence, the share of shale gas in Argentina’s total gas
production rose from just 1% in 2014 to 37% in 2022. This trend
continued over the first eight months of 2023, with convential gas
production declining by 6% (or 1 bcm) y-o-y, while shale gas output
rose by over 16% (or 2 bcm). For the full year of 2023, the shale
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through the Northern Gas Pipeline to replace imports from Bolivia(standing at around 3 bcm in 2023) and potentially export natural
gas to Chile, and to southern and central Brazil via Bolivia. As aconsequence of the debottlenecking of Vaca Muerta, the share of
shale gas in Argentina’s total gas production is set to increase from
37% in 2022 to around 60% by 2026.

Medium-term market outlook

Gas Market Report, Q4-2023

Argentina’s natural gas production is set to expand by 20% by 2026

bcm

Natural gas production, Argentina, 2014-2026
Forecast

60

40

20

0

2014

2015

2016

2017

2018

2019

2020

Conventional gas

2021
Tight gas

2022

2023

2024

2025

2026

Shale gas
IEA. CC BY 4.0.

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IEA. CC BY 4.0.

Sources of historical data: IEA analysis based on Argentine Ministry of Economy (2023), Producción de gas convencional y no convencional.

Medium-term market outlook

Gas Market Report, Q4-2023

Global LNG supply is expected to expand by 25% by 2026
Global LNG trade is forecast to expand by nearly 25% (or just over
130 bcm) by 2026 compared with 2022, primarily driven by LNG
liquefaction capacity additions in North America and Qatar. The

2023, Europe’s LNG inflows are expected to remain close to theirrecord 2022 levels, while Asian LNG demand is forecast to return to
growth and rise by 5%. This is primarily driven by the recovery in
China’s LNG demand. The country’s LNG imports grew by animpressive 13% y-o-y in Q1-Q3 2023 and are expected to increaseby 14% for the full year of 2023, albeit remaining below the record
levels reached in 2021.

overall investment value of new LNG export capacity coming online
during the forecast period is estimated at close to USD 130 billion.
Over 70% of this incremental supply is expected to arrive on themarket in 2025 or 2026, although project delays and varying rampup rates could alter this forecast. The strong growth in LNG supply
could potentially alleviate market tensions and moderate gas supply

North America and Qatar are set to drive the expansion of LNG
exports over the medium term, together accounting for over 80%

security risks in the second half of the decade.

of incremental LNG supply between 2022 and 2026. In the
United States, LNG exports are expected to expand by over 60%(or 65 bcm) by 2026 compared with 2022. Hence, theUnited States alone is set to contribute for around half ofincremental LNG supply, reinforcing its position as the world’s
leading LNG exporter. Consequently, the US share of global LNG
supply is projected to increase from 20% in 2022 to 25% by 2026.
This strong growth is primarily supported by the commissioning of

Global LNG supply grew at 4% in 2022 and at 3% in Q1-Q3
2023. This modest growth is reflective of limited liquefaction
capacity additions, outages at major export facilities and declining
feedgas supply at LNG plants fed by ageing fields. Altogether, LNG
supply is set to increase by just over 40 bcm during 2022-2023, notsufficient to offset the decline in Russian piped gas deliveries toEurope (down by 122 bcm in 2023 compared with 2021) and hence
contributing to tighter market conditions. The United States alone
accounted for almost half of the total incremental LNG supply since
the start of 2022 and is set to become the world’s largest LNG
exporter in 2023, ahead of Qatar and Australia. The gas supply
shock caused by Russia led to reconfigured LNG trade flows,with Europe increasing its LNG imports by 60% to almost 170 bcm
in 2022, while deliveries to Asia dropped by 7%. For the full year of
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three large LNG export projects in Lousiana and Texas. At theGolden Pass LNG export facility (21 bcm/yr), Train 1 is expected tostart operations in Q1 2024, while Trains 2 and 3 are set to ramp up
production during 2025 and 2026. The first phase of thePlaquemines LNG project is set to start operations in the second
half of 2024, followed by the ramp-up of the second phase in 20252026, adding a total liquefaction capacity of 20 bcm/yr. The Corpus

Medium-term market outlook

Gas Market Report, Q4-2023

Christi Stage 3 expansion project (over 13.6 bcm/yr) is expected
to start operations by the end of 2025 and ramp up production
during 2026. In British Columbia, on Canada’s west coast, the LNG
Canada Phase 1 project is set to ramp up deliveries in 2025 andinitial utilisation rates of the project. In Africa, the ramp-up of Coral
South FLNG in Mozambique, together with the start-up of Tortue
FLNG and Congo FLNG, are set to add over 12 bcm/yr ofliquefaction capacity. The Nigeria LNG Train 7 (9.5 bcm/yr) is
expected to begin operations in 2026 and ramp up to full capacity
beyond our forecast horizon. In the Asia Pacific region, Australia
and Indonesia are set to lead the expansion of LNG liquefaction
capacity. The Tangguh LNG Train 3 (5.2 bcm/yr) in Indonesia is2026 with an overall capacity of 19 bcm/yr. In Mexico, the firstphase of the Energía Costa Azul LNG project (4.4 bcm/yr) is
expected to start producing first LNG by the end of 2024 and ramp
up exports in 2025. While located on the west coast of Mexico, theLNG plant will be fed by the Rosarito pipeline with natural gas
sourced from West Texas and the Rocky Mountain region. In
addition, offshore at Altamira in Mexico, an initial floating LNG(FLNG) production unit is set to be deployed from October 2023
with a capacity of 1.9 bcm/yr. According to the project developer,
additional FLNG units are to be installed during 2024, scaling totalliquefaction capacity up to 5.5 bcm/yr over the forecast period.

set to begin production in H2 2023 and ramp up LNG supplies
during 2024. In Australia, Pluto LNG Train 2 is expected to
produce first LNG in 2026 and ramp up operations to full capacity in
2027. Reduced feedgas supply to LNG projects linked to ageing
fields is expected to reduce LNG output by around 7 bcm/yr by
2026 in the Asia Pacific region.
From a demand-side perspective, the Asia Pacific region is
expected to absorb the equivalent of total incremental LNG supply
during the 2023-2026 period, largely driven by China's renewed
appetite. China’s LNG imports are set to double by 2026 comparedwith 2022, partly enabled by the country’s portfolio of long-term
contracts. Europe’s LNG imports are set to average just over
165 bcm/yr between 2023 and 2026, slightly lower than in 2022. A
further reduction in Russian piped gas supplies could increase EU

Qatar took FID on the North Field East expansion project in 2021
– the largest FID in the history of LNG with a capacity of 45 bcm/yr.
The project consists of four liquefaction trains and is expected toramp up exports during 2026-27. In Russia, first train of Arctic
LNG 2 is expected to start operations by the end of 2023 with acapacity of 8.9 bcm/yr. The start-up of Train 2 is expected to bedelayed until 2025, with production ramping up during 2025-2026.
The commissioning of Train 3 is assumed to be delayed beyond ourforecast horizon. Considering the sanctions imposed on Russia,
significant uncertainties remain around the ramp-up schedule and

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LNG import requirements by an additional 20 bcm/yr.

Medium-term market outlook

Gas Market Report, Q4-2023

North America and Qatar account for 80% of incremental LNG supply during 2023-2026

Year-on-year change in bcm

Year-on-year change in LNG supply by key export region, 2016-2026
80
North America

Middle East

Europe2018

2019

Eurasia

Central and South America

Asia Pacific

Africa2023

2024

Total y-o-y change

60

40

20

0

- 20

2016

2017

2020

2021

2022

2025

2026
IEA. CC BY 4.0.

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IEA. CC BY 4.0.

Sources of historical data: IEA analysis based on ICIS (2023), LNG Edge.

Spotlight on Africa

Medium-Term Gas Report 2023

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Spotlight on Africa

Spotlight on Africa

Medium-Term Gas Report 2023

Has Africa reached a turning point for natural gas?
With almost one-fifth of the world’s inhabitants, Africa is thecontinent with the youngest and fastest-growing population and also
the lowest level of energy access. Despite holding over 9% of thecountries – Egypt, Algeria and Nigeria – mainly to produce power
for air conditioning. We forecast Africa’s annual gas consumption toincrease by an annual average of 3% during 2022-2026.

world’s proven reserves and a vast potential for green energy,
Africa remains the most energy-poor continent. According to the
IEA Africa Energy Outlook 2022, nearly 600 million people, or 43%of the total population, have no access to electricity. Its significant

The use of domestic natural gas production makes sense for
African consumer countries, offering the considerable advantage oflower energy costs compared with fuel imports. Large-scale gas
projects promise new opportunities for export revenues, although
they are not evenly spread, since the distribution of resourcesshows regional inequalities. Although African leaders are embracing
the transition to clean energy, and the region has enormous
renewable energy resources, they also claim that they need to beable to develop their fossil fuel resources to meet their development
needs and provide access to modern energy for their populations.

natural gas reserves could turn Africa into a key player in the global
gas market, while improving energy access for its rapidly growing
population.
African countries produced around 6% of the world’s natural gas in
2022, a proportion that has doubled since 2000 and roughly tripled
since 1990. The main producing countries are Algeria, Egypt andNigeria, together accounting for over 80% of the continent's
production in 2022. In the medium term, up to 2026, we forecast 6%
growth in Africa’s gas production, a rate that could have been
higher without upstream concerns on legacy projects and had

Governments expect tangible economic gains for society, such as
job creation and skills development.

projects under development not experienced delays due to security
and soaring costs.
African countries expect to benefit from the development of gas
projects to meet their growing energy needs in the medium term.
Gas demand in Africa is concentrated in the major producing

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The climate and environmental impacts of natural gas projects andthe risk of stranded assets should not be put aside. The lack ofexisting midstream infrastructure to allow domestic access to gas is
an issue and financing these projects will become increasingly
complicated. Nevertheless, natural gas can be part of the solution
for building resilient and sustainable energy systems that can help
Africa reduce its GHG emissions.

Spotlight on Africa

Medium-Term Gas Report 2023

Domestic gas remains underdeveloped in Africa, despite significant reserves

Natural gas
reserves(mcm)

Top five African countries by natural gas reserves in 2021

Nigeria, 32.5% of African reserves in 2021
Algeria, 25.4%
Mozambique, 16.0%
Egypt, 10.1%
Libya, 8.5%
Rest of Africa, 7.5%

0

5

10

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Sources: IEA analysis based on EIA (2023), US Energy Information Administration.

Spotlight on Africa

Medium-Term Gas Report 2023

Wide regional disparities exist in Africa’s gas production forecast
Africa accounted for nearly 40% of new natural gas discoveries
globally in the past decade, mainly in Mozambique, Mauritania,
Senegal and Tanzania. However, socio-political instability and(67 bcm) among the top three gas-producing countries, along with
Nigeria (40 bcm). As a result of the energy crisis triggered in 2022,
some European companies showed renewed interest in

security issues make Africa a high-risk environment for the gas
industry. This results in a gap between the potential and the actualgas production projects under development. The delays
experienced by the Mozambique LNG project are a good

agreements with North African states already connected toSouthern Europe via pipelines. For example, Algeria, which is linked
by pipeline to Italy and Spain, has increased its exports to its main
customers in Southern Europe over the past year, as Eni added gas

illustration: originally scheduled to deliver its first LNG cargo in
2024, and with plans to produce up to 60 bcm/yr, the project now
sees LNG production starting in 2028 at the earliest.

assets to its Algerian portfolio. Gas production from Algeria is
expected to grow by 10% over the forecast period 2022-2026.
Egypt’s supply is estimated to decline by 7% due to a lack of major
discoveries coming online and a natural decline from producing
fields. Nigeria’s gas production is estimated to gradually increaseby 15%, thanks to higher feedgas availability. Overall, we anticipate
a slight increase in the continent’s gas production to 255 bcm in
2023. This will be primarily driven by sustained production in Algeria
and full production realisation from the Eni-operated Coral South
Floating LNG (FLNG) project in Mozambique, which was brought
online in late 2022.

Gas production in Africa has increased by an average of 2.5% peryear between 2011 and 2021, above the world average of 2.2%. It
reached 246 bcm in 2022, representing just over 6% of global
production. Africa has the potential to become a much more
important source of global supply. Of the natural gas produced in
2022, 36% was exported, of which 61% was in the form of LNG.
The main destinations are Europe (60% of total volumes exported in
2022, by pipeline and in the form of LNG) and Asia (less than 10%
of total volumes exported in 2022, representing half of what wasexported to Asia in 2021 in absolute terms).
North Africa remains the biggest contributor to gas production
on the continent, with Algeria (101 bcm in 2022) and Egypt

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In our medium-term outlook, we forecast gas production growth of
10% during the 2022 to 2026 period, taking into consideration
gradually increasing production in Algeria and Nigeria, andproduction starting in Senegal, Mauritania, Congo and Gabon.

Spotlight on Africa

Medium-Term Gas Report 2023

Natural gas production in Africa is expected to grow by 10% by 2026, driven mainly by new
projects in Nigeria, Senegal, Mauritania and Congo

Natural gas production by country, Africa, 2000-2026
Forecast

250
200
150
100
50
0

Algeria

2000
Egypt

2005
Nigeria

Mozambique

2010
Libya

2015
AngolaEquatorial Guinea

2020

2025

Other North Africa

Rest of Africa

IEA. CC BY 4.0.

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Natural gas production (bcm)300

Spotlight on Africa

Medium-Term Gas Report 2023

Gas demand growth is expected to slow in mature North African markets
African gas consumption has almost tripled since 2000, and themain consumers are also the major producing or transit countries ofNorth Africa plus Nigeria. In absolute terms, natural gas demand inwhile simultaneously succeeding in boosting domestic gas
penetration, mainly in the form of gas-fired power generation tomeet the rising cooling demand. Gas-to-power accounts for close to
40% of total natural gas consumption in Algeria and 55% in Egypt.
Industry is the second sector, accounting for 23% of total natural
gas consumption in Algeria (driven by petrochemicals production)and 18% in Egypt (driven by fertiliser and urea production). Our
forecast expects modest growth in gas demand in Algeria, at an
average of 1.9% per year until 2026, due to gas supply constraints
and a downgraded economic environment, and growth revised
downwards to an average of 3.6% per year in Egypt. This increasein domestic gas demand threatens Egypt's LNG export ambitions
and highlights the need to import gas by pipeline from Israel.

Africa reached 172 bcm in 2022, comparable to the annual
consumption of Central and South America and representing only
4% of global natural gas demand, or a tenth of the annual
consumption of North America. Overall, we forecast annual gas
consumption to increase by an annual average of 3% in Africa as awhole, over the period 2022-2026.
New natural gas markets are emerging, mainly for power
generation, as in Ghana, South Africa and Senegal, to meetgrowing electricity needs and replace liquid fuels. These newmarkets are supported by the development of production as well as
the commissioning of new import infrastructure. The current
environment of high prices and tight supply is particularly
challenging for these price-sensitive emerging African markets andis likely to have a negative impact on the growth outlook for natural
gas consumption.
North Africa currently accounts for about three-quarters of thecontinent’s natural gas consumption, which remains concentrated in
Egypt and Algeria, Together, they account for nearly 70% of total
natural gas consumption on the African continent, at 117 bcm in
2022. These two markets have developed strong export industries
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Although natural gas has great potential in the region, the share ofnatural gas in the energy mix in sub-Saharan Africa remains
limited. Nigeria is the largest natural gas market in sub-SaharanAfrica, with an estimated 21 bcm consumed in 2022. The power
generation sector in Nigeria is the main user of natural gas,accounting for 40% of total consumption, but suffers from a lack ofgas supply and network capacity to run power plants. Our forecast
anticipates average annual gas consumption growth of 2.8% during
the 2023 to 2026 period, taking into consideration uncertainties
regarding access to investment.

Spotlight on Africa

Medium-Term Gas Report 2023

Sub-Saharan Africa accounts for more than half of the continent’s gas consumption growth to2026, driven by the power sector and industry

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IEA. CC BY 4.0.

Spotlight on Africa

Medium-Term Gas Report 2023

LNG focus: Key projects
In 2022 around a quarter of the natural gas produced in Africa, or
62 bcm, was shipped to international markets in the form of LNG,
largely driven by Nigeria (accounting for 41% of LNG production in

The recent surge in offshore FLNG production suggests that more
African gas could reach the global market over the next decade.
Four FLNG units for the region are currently under construction or

Africa), followed by Algeria (23%) and Egypt (16%). LNG
production from Africa accounted for 11% of the worldwide LNG
supply.

reactivation. The first of these is the Golar Gimi FLNG unit allocatedto BP's GTA project, scheduled to come on stream in 2024 at theearliest.

Africa’s LNG export capacity is currently just over 100 bcm/yr.
During the past decade and until recently, over a dozen new LNG
export projects were planned and proposed in Africa. In the late
2010s FIDs were taken for Coral South FLNG in Mozambique and
the Greater Tortue Ahmeyim (GTA) LNG project on the maritime
border of Mauritania and Senegal, followed by larger projects suchas Mozambique LNG and Nigeria Train 7. Additional projects have

However, Africa’s track record for LNG exporting projects is notencouraging. The Mozambique LNG project has been halted since2021 following the declaration of force majeure due to security risks.
The GTA LNG project is encountering problems with cost overruns,
environmental concerns and cost inflation. These problems areweighing on the prospects for investment decisions for other African
LNG projects.

been proposed, including GTA Phase 2, Rovuma LNG in
Mozambique, Cameroon Phase 2 and Nigeria Floating LNG(FLNG), without reaching FID to date. In total, new projects in subSaharan Africa could add some 90 bcm of annual LNG capacity by
2030. Within the forecast horizon, only 17 bcm of additional LNG
production capacity is expected to be commissioned by 2026,
corresponding to projects already under construction or notsuspended for security reasons.

Since the beginning of the energy crisis in 2022, some internationaloil companies and EU member states have focused on LNG
projects to secure supplies in a tight global gas market. Existing
LNG contracts have been renegotiated to export more LNG to

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Europe. Italy should certainly benefit from Eni's efforts in thisrespect. Over the past year, the company signed agreements with
Egypt, Algeria and Angola, while launching LNG exports from theCoral field in offshore Mozambique and concluding an agreementwith the Republic of Congo on its FLNG project for the Marine XII

Spotlight on Africa

Medium-Term Gas Report 2023

fields. Similarly, British giant BP announced earlier this year that itplanned to take FID on Phase 1 of the Yakaar-Teranga LNG
project, off the coast of Senegal, before the end of this year.
Meanwhile, Shell and Norway’s Equinor revealed in mid-May thatthey had completed negotiations on the Tanzania LNG project andexpected to sign a host government agreement and a production
sharing agreement soon.
Yet, considering the long lead times of LNG projects, thesecommitments are not going to change the game for African LNG in
the immediate future. For the time being, the continent's LNG
activities will continue to be dominated by established players:
Egypt, Algeria and Nigeria (and, to a lesser extent,
Equatorial Guinea and Angola). Algeria and Egypt are likely tomaintain their current annual LNG capacity of around 40 bcm and17 bcm respectively.
In our medium-term forecast, Africa’s share of global LNG supply is
expected to remain broadly flat during 2022-2026. Security issues
and poor governance are weighing on project development despite
the vast reserve base and relatively low cost of supply.

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The window of opportunity to monetise the region's significant gas
resources could be limited, with US and Qatari projects expected tostart delivering significant volumes by 2027, and the potential for
LNG demand to fall from 2030 onwards, driven by decarbonisation
targets.

Spotlight on Africa

Medium-Term Gas Report 2023

LNG production in Africa is expected to grow by 25 to 30% by 2026, mainly driven by Nigeria
and new exporting countries
15

15%
Forecast

10%

9

5%
3

Y-o-y change in %Y-o-y change in bcm

Y-o-y change in Africa’s natural gas LNG exports by key countries, 2018-2026

0%
-3
-5%
-9

- 15

-10%

2018

2019

2020

Nigeria

Algeria

2021

Angola

2022

Egypt

2023

Equatorial Guinea

2026

-15%

2024

2025

Others*Y-o-y change (total Africa)
IEA. CC BY 4.0.

PAGE | 84

IEA. CC BY 4.0.

* Cameroon, Congo, Mozambique, Mauritania and Senegal.
Source: IEA analysis based on ICIS (2023), ICIS LNG Edge.

Spotlight on Africa

Medium-Term Gas Report 2023

A concerted effort to limit flaring and methane emissions in Africa could make 35 bcm ofnatural gas available
Substantial quantities of gas currently produced in Africa do notmake it to market because they are flared or emitted directly into theatmosphere. In 2022 close to 30 bcm of natural gas was flared andnearly 15 bcm was lost, together representing almost 20% of actualgas production. Reducing flaring, venting and methane leaks canbring a double dividend: a boost in natural gas sales and reduced
greenhouse gas emissions. Reducing methane emissions, the main
component of natural gas, is one of the best opportunities available
for limiting the near-term effects of climate change. Reducing flaring
A concerted effort to limit flaring and methane emissions in Africa
could make around 35 bcm of natural gas available to markets. The
IEA estimates that it is technically possible to avoid around 80% of
methane emissions from oil and gas operations in Africa and nearly
95% of flared volumes. Around half of the 35 bcm could be avoided
at no net cost because the outlays for the abatement measures areless than the market value of the additional gas that can be

In parallel with industry action, new policies and regulations will beneeded to ensure that companies have the incentive to act. Many
African countries participate in the Global Methane Pledge, thereby
committing to collectively reduce global methane emissions by atleast 30% below 2020 levels by 2030 and to move towards thehighest-tier IPCC inventory methodologies. Several countries,
including Nigeria and Egypt, also endorse the World Bank’s Zero
Routine Flaring by 2030 Initiative, and are taking action to curtailmethane emissions and flaring. In 2022 Nigeria issued guidelines
for emissions management in the upstream oil and gas sector to
support the elimination of routine gas flaring by 2030, and a 60%

captured and sold.

reduction in fugitive methane emissions by 2031.

The ways to limit flaring and methane emissions from oil and gas
operations are well known. Methane abatement measures include
installing emission control devices, conducting regular leakdetection and repair campaigns, and replacing components andInternational support is available to support such efforts. For
example, the EU external energy engagement strategy includes
assistance for partners to deploy methane abatement technologies
through “You collect, we buy” schemes.

would also lower local air pollution.

PAGE | 85

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devices that emit methane during normal operations. Gas thatwould be flared can be captured and injected into pipelines, turned
into other useable products, or converted into electrical power thatcan be used on site or sold back to the electricity grid. Portable
CNG or mini-LNG facilities are available to treat gas on site andenable its use in nearby facilities.

Spotlight on Africa

Medium-Term Gas Report 2023

Africa has reduced flared volumes by more than 50% from their peak in the mid 1990s, but
made little progress on tackling methane emissions
Methane emissions and natural gas flaring in Africa, 1990-2022

bcm

80

60

Flaring

40

20

0
1990

Methane
1995

2000

2005

2010

2015

2020
IEA. CC BY 4.0.

PAGE | 86

IEA. CC BY 4.0.

Source: IEA analysis based on flaring data from the World Bank’s Global Gas Flaring Reduction Partnership (2023), Global Gas Flaring Data.

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

PAGE | 87

IEA. CC BY 4.0.

Medium-term outlook for low-emission gases

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Low-emission gases (including biomethane, low-emissionhydrogen 4 and e-methane 5) can play a crucial role in decarbonisingemission hydrogen. Besides Europe and North America, a numberof emerging low-emission gas producers are expected to scale up

gas supply chains and the broader energy system. Recognising
their growing importance, the International Energy Agency has
developed a Low-emission Gases Work Programme to track
closely market developments in this sphere and facilitate dialogue
between emerging producers and consumers. This section provides
a medium-term outlook for low-emission gases, with a particularfocus on emerging producers.

their output, including Brazil, China, India and Oman.

The deployment of low-emission gases is expected toaccelerate over the medium term. The current forecast projects adoubling of the supply of low-emission gases by 2026, translating
into an increase of over 8 bcm in absolute terms. Europe andNorth America are set to drive this expansion and to contribute over
70% of the overall growth. The development of low-emission gasesin these markets benefits from a wide range of policies, increasingly

Biomethane production is expected to expand by over 65% (or4.5 bcm) between 2022 and 2026, and to account for almost 55% of
the total increase in low-emission gases during this period. Europe
and North America are set to remain the key drivers of this growth,scaling up their biomethane output by close 60% (or 3.6 bcm) overthe period. Brazil is expected to emerge as one of the fastestgrowing biomethane producers over the medium term, as thecountry is forecast to quadruple its renewable natural gas output by
2026. Low-emission hydrogen is projected to grow at an averagerate of almost 25% per year between 2022 and 2026, translating
into an incremental 3.9 bcmeq of supply by 2026. Similarly tobiomethane, Europe and North America are set to drive this growth,
accounting for close to 60% of the total increase. In contrast, e-sophisticated subsidy schemes and well-developed, interconnected
gas networks. Nevertheless, further efforts will be required toreach the ambitious targets set both for biomethane and low-methane struggles to take off over the forecast period, requiring a
concentrated effort between emerging producers and consumers toestablish viable supply chains and effective support mechanisms.

4

e.g. from CO2, are not from fossil fuels or process emissions. Beyond this definition, a commercial proposition
for carbon-neutral e-methane could consider the use of CO2 captured at industrial or power plants and offset
through carbon credits (similar to the commercial offers of carbon-neutral LNG).

Low-emission hydrogen includes hydrogen produced via electrolysis where the electricity is generated from alow-emission source (renewables or nuclear), biomass or fossil fuels with CCUS.
5
E-methane refers to synthetic methane produced from electrolytic hydrogen. The definition of low-emission
synthetic methane used by the IEA for analytical purposes in its reports considers that any carbon inputs,

PAGE | 88

IEA. CC BY 4.0.

The supply of low-emission gases is set to double by 2026, but further efforts are required tounleash their full potentialMedium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Biomethane is expected to dominate low-emission gas supply over the medium term

16
14
12
10
8
6
4
2
0

2022

Biomethane
Biomethane

Low-emissionhydrogenLow-emission hydrogen

E-methane2026

E-methane
IEA. CC BY 4.0.

PAGE | 89

IEA. CC BY 4.0.

bcm

Estimated low-emission gas supply in 2022 and expected increase in production to 2026

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

In the fast lane: Biomethane is set for strong growth over the medium term…
Global biomethane (or renewable natural gas) production morethan doubled between 2018 and 2022, largely driven by Europe
and North America. Latest estimates indicate that globalthat around 80% of biomethane plants have grid injection
capability, with close to 60% of them connected to a gas
distribution grid. In terms of feedstock supply, the landscape isbiomethane output grew by 17% (or 1 bcm) in 2022 to reach close
to 7 bcm. Europe and North America accounted for around 90% of
this growth. Biomethane production is expected to expand by
over 65% (or 4.5 bcm) between 2022 and 2026, primarily supported

increasingly dominated by agricultural residues, accounting for over
35% of the feedstock mix, followed by energy crops (30%) andorganic waste (24%). Biomethane production in Germany –Europe’s largest biomethane producer – remained broadly flat atby projects undertaken in Europe, North America and Brazil.

just over 1 bcm in 2022, while Denmark and France together
contributed over 70% of the incremental biomethane supply amid
effective policy support. Growth has been particularly strong in

The United States retained its position as the world’s largest
biomethane producer. Latest data indicate that biomethane output
grew by around 20% (or 0.35 bcm) to reach almost 2 bcm in 2022.
This strong growth is largely supported by the transport sector,
where the use of biomethane more than doubled during 2018-2022.

France, where biomethane output increased by more than 60%
compared with 2021 to reach 0.7 bcm. In the first half of 2023,
France’s biomethane output rose by over 30%, putting it on track to
become Europe’s second-largest producer this year. In Denmark,biomethane output rose by an estimated 15% in 2022 to almost
0.7 bcm. Initial data indicate that biomethane production rose by
20% y-o-y in Q1-Q3 2023. As such, biomethane met over 40% ofDenmark’s natural gas demand during this period. Europe’s

In 2022 renewable natural gas met almost 70% of all on-road fuelused in natural gas vehicles. In turn, the transport sector accounts
for nearly 90% of total biomethane use in the United States.
Feedstock supply remains largely dominated by municipal solid
waste, accounting for 72% of the feedstock mix, followed byagricultural and food waste (23%) and wastewater (5%). Renewable
natural gas in North America is set to benefit from the Inflation
Reduction Act and expand by 70% to reach almost 4 bcm by 2026.
In Europe, biomethane output grew by an estimated 15% (or0.5 bcm) to reach almost 4 bcm in 2022. Latest surveys indicate

PAGE | 90

IEA. CC BY 4.0.

biomethane production is projected to increase at an average rateof over 10% per year over the forecast period and reach 6 bcm by2026, albeit insufficient to put the European Union on track to reachits target of 35 bcm/yr biomethane output by 2030. Outside Europe
and North America, biomethane production growth is expected tobe supported by project developments in Brazil, China and India.

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023…primarily supported by project developments in Europe and North America

bcm

Biomethane production by region, 2010-2026
12

Forecast

10

8

6

4

2

0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
EuropeNorth America

Other regions
IEA. CC BY 4.0.

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IEA. CC BY 4.0.

Sources: IEA analysis based on Argonne National Laboratory (2022), Renewable Natural Gas Database; Biogas Partner (2023), Biogaspartner Einspeiseatlas Deutschland; Cedigaz(2023), Global Biomethane Database; Energinet (2023), Energi Data Service; ODRE (2023), Production Quotidienne Consolidée de Biométhane sur le réseau de transport et dedistribution par Opérateur.

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Awakening green giant: Biomethane developments in Brazil
Brazil is expected to emerge as a key biomethane producer
over the forecast period. The country’s renewable natural gas
output is projected to quadruple between 2022 and 2026,

Special Incentive Scheme for Infrastructure Development, underwhich new projects benefit from tax exemptions for the acquisitionof machinery, construction materials and equipment.

accounting for over 10% of incremental global biomethane supply.

According to the latest industry data, there are currently
ten biomethane plants in Brazil with a total production capacity of
0.16 bcm/yr. As of July 2023, only six of them have been authorised
to produce and inject biomethane into the country’s gas network.
Eleven biomethane plants (with a total capacity of 0.12 bcm/yr) arein the process of seeking regulatory approval from the National

Considering Brazil's vast agricultural sector, the country has
significant biogas and biomethane production potential. Brazil’s
Biogas Association (ABiogás) estimates the country’s biogas
potential at over 43 bcm/yr. Assuming that biogas contains 60%
methane on average, the country’s biomethane potential isestimated at around 25 bcm/yr. Brazil’s biogas output has grownstrongly in recent years and more than doubled between 2017 and2021. In 2021 Brazil had 755 biogas plants in operation with an
overall output of 2.3 bcm. Over 70% of the biogas produced was

Agency of Petroleum, Natural Gas and Biofuels (ANP). According toa survey carried out by ABiogás and the Brazilian Association of
Pipeline Gas Distributors (Abegás), there are currently
27 biomethane projects in Brazil at various stages of development.
Renewable natural gas output is expected to more thanquadruple from current levels, rising to 0.8 bcm/yr by 2027 andmaking Brazil the fifth-largest biomethane producer in the world.
Landfills are foreseen to account for nearly 60% of the feedstock
supply mix, followed by the sugar-energy sector (32%) andagricultural waste (8%). To foster production, several certification
schemes are being developed in Brazil. In 2022 the country's first
Gas-RECs – renewable energy certificates for biogas – were issued

used for power generation and around 20% was upgraded into
biomethane. According to latest data, Brazil’s biogas output grew bymore than 20% in 2022 to reach 2.8 bcm.
In contrast with biogas, biomethane is still in its infancy inBrazil. In March 2022 Brazil launched the Federal Strategy toIncentivise the Sustainable Use of Biogas and Biomethane. Besides
providing a definition of biogas and biomethane, the decree
includes guidelines on the development of biomethane supply
chains, the promotion of biomethane consumption and measures toreduce methane emissions. Biomethane was also included in the

PAGE | 92

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by an agricultural conglomerate producing biogas. ABiogás iscurrently developing its own biomethane certification programme.

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Brazil’s biomethane output is expected to more than quadruple by 2027

bcm

Biomethane production prospects by feedstock supply, Brazil, 2023-2027
0.8

0.6

0.4

0.2

0.0

Landfills

Sugar-energy sector
Landfills

Sugar-energy sector

Agricultural waste

Total

Agricultural waste
IEA. CC BY 4.0.

PAGE | 93

IEA. CC BY 4.0.

Source: IEA analysis based on EPBR (2022), Brasil tem 27 novas plantas de biometano previstas para os próximos anos.

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Biomethane developments in India: Driven by the transport sector
Biomethane production in India rose by over 20% y-o-y during
the 2022/23 financial year to reach close to 20 mcm. Supported bygovernment policies, biomethane output is expected to increase

investors and entrepreneurs to procure CBG. In addition, thegovernment has recently introduced the GOBAR-DHAN scheme topromote the conversion of biowaste to biogas/biomethane in rural
areas. As of August 2023, a total of 56 plants with a rated capacityof 160 mcm/yr have been commissioned. Agricultural waste
accounts for 34% of the feedstock supply mix, followed bypressmud (27%), MSW (17%) and animal wastes (16%).

more than tenfold over the forecast period, with demand
concentrated in the transport and industrial sectors.
India’s biomethane sector has strong potential due to a
combination of local resource availability and supportive
government policies. Historically, captive feedstock supply (suchas pressmud and bagasse in the sugar industry, distillery byproducts, and sewage treatment plants) have been the preferred
option for biomethane production. However, technologicaladvancements and improvements in feedstock supply chain
management are expected to enable larger biomethane projects
that rely on agricultural waste, municipal solid waste (MSW) andnapier grass.
The government of India and the Ministry of Petroleum and NaturalGas introduced a number of policies to accelerate thedeployment of biomethane and compressed biogas (CBG). This
includes the SATAT (Sustainable Alternative Towards Affordable
Transportation) scheme launched in October 2018, which
envisaged production of 15 Mt of CBG from 5 000 plants byfinancial year 2024. Under the scheme, oil and gas marketingcompanies have been inviting expressions of interest from potential

PAGE | 94

IEA. CC BY 4.0.

Currently over 110 CBG/biomethane plants are underconstruction and more than 200 plants are in the early phases ofdevelopment. Based on plants currently under construction, India’s
biomethane output could increase more than tenfold and reachclose to 300 mcm/yr by 2026. Agricultural waste, MSW and napiergrass feedstocks are expected to support this strong expansion. In
the longer term, India aims to increase the share of
CBG/biomethane in its priority segments of the city gas distributionsector (CNG for transport and piped natural gas for domestic use)
to 10%. This would require annual CBG/biomethane output toincrease to over 1.5 bcm. Despite India’s strong potential, several
key challenges remain ahead of the development of
biomethane/CBG. This includes the lack of stable, long-term prices
for feedstock supply, and the limited scope of support schemes. In
this context, project financing remains difficult due to the relatively
thin profit margins and the risks related to marketing biomethane.

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Biomethane production in India is expected to expand more than tenfold by 2026

mcm/yrBiomethane production, India, FY 2022/23-FY 2025/26

Forecast

300

250

200

150

100

50

0

FY 2022/23

FY 2024/25

FY 2023/24

FY 2025/26
IEA. CC BY 4.0.

PAGE | 95

IEA. CC BY 4.0.

* The Financial Year in India starts on 1 April and ends on 31 March.
Source: IEA analysis based on data provided by the Indian Gas Exchange.

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Low-emission hydrogen production is expected to more than triple over the medium term
Low-emission hydrogen production is set to triple over the
medium term, primarily supported by project developments in
China, Europe and North America. Despite this rapid growth, thethan 20% of them are in mature phases of development (either
operational, under construction or having reached FID).
Considering projects in mature phases of development, lowemission hydrogen output more than triples and reaches 2 Mt/yr(or 6 bcmeq) by 2026. From a regional perspective, production
growth will be largely supported by North America, with a share ofincremental supply of more than 40% over the forecast period,
followed by China (20%) and Europe (17%). Water electrolysis is
expected to contribute 50% of incremental low-emission hydrogen
supply by 2026. Electrolyser capacity is projected to reach around
14 GW by 2026, with China alone accounting for 40% of total
installed capacity, followed by Europe (25%), the Middle East (20%)
and North America (less than 10%). Under the current state ofproject development, electrolytic hydrogen production in theEuropean Union would reach 0.25 Mt by 2026, leaving a significant
gap to reach the 10 Mt/yr target by 2030. Low-emission hydrogenproduced from fossil fuels with CCUS is expected to grow at a
slower pace, although is projected to account for 50% of

current pace of project development may be insufficient to reach theambitious targets set in certain regions.
Low-emission hydrogen production remained broadly flat in
2022, with output estimated at 0.7 Mt and equating to just 0.7% of
total hydrogen output. The majority of low-emission hydrogen was
produced from fossil fuels with CCUS. Around 15 large-scalehydrogen facilities around the world are equipped with CCUS,
capturing around 11 Mt CO2 per year. Natural gas with CCUS
accounted for just over half of global low-emission hydrogen output.
Low-emission hydrogen production via water electrolysis grew byaround 35% in 2022, although it continued to be small, with output
estimated at less than 100 000 t H2. From a regional perspective,
low-emission hydrogen production remains dominated by
North America, accounting for around two-thirds of global output.

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incremental supply in the forecast period. Hence, the share of lowemission hydrogen produced from fossil fuels with CCUS is set to
decline from today’s 90% to just 50% by 2026. CCUS-basedhydrogen projects are expected to be almost entirely concentrated
in North America, benefiting from the region’s abundant andrelatively cheap natural gas supply.

According to the IEA Hydrogen Projects Database, projects at
various stages of development could increase global low-emissionhydrogen production up to 12 Mt (or 36 bcmeq) by 2026. Projects
relying on water electrolysis would account for around 75% of thispotential growth. However, the majority of these projects are either
undertaking feasibility studies or at the concept phase, and fewer

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

The majority of low-emission hydrogen projects remain in the early stages of development
Expected output of low-emission hydrogenin key markets in 2026

Potential output of low-emission hydrogen in 2026
by current project status

Mt/yr

2.0

1.6

1.2

~12 Mt/yr
0.8

0.4

0.0

Operating & FID

Feasibility

Early stage

IEA. CC BY 4.0.

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* “Operating & FID” includes projects that are operating and that have reached at least FID, therefore projects under construction are also included; “Feasibility” includes projects
undergoing a feasibility study; “Early stage” includes projects at very early stages, such as those in which only a co-operation agreement among stakeholders has been announced
Source: IEA Hydrogen Projects Database (2023).

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Oman: Transitioning from an oil and gas producer to a hydrogen exporter
Oman is a producer economy with a clear long-term vision andstrong net zero ambitions. Today, oil and gas represent around
60% of Oman’s export income, and domestic natural gas accounts

47 years, which includes 7 years for development and construction
and 40 years of operation. The first round of auctions for the
allocation of land blocks for hydrogen projects was completed inJune 2023 and resulted in a total of five projects awarded grants
worth a combined USD 30 billion. The second round of auctions iscurrently active with plans to award up to three land blocks in thefor over 95% of the country’s electricity generation. In 2022 Oman
announced a target to become net zero by 2050 and it aims tosignificantly ramp up domestic production of hydrogen fromrenewable electricity. Beyond fossil fuels, Oman is abundantly

Dhofar region by the end of Q1 2024.

endowed with significant renewable resources. Building on its
potential in solar and wind, the country aims to produce at least
1 Mt of renewable hydrogen a year by 2030, up to 3.75 Mt by 2040

While international demand develops, Oman can already develop a
domestic market for renewable hydrogen to strengthen its
position and mitigate uncertainties. Domestic demand could startwith the refining sector, which uses around 0.35 Mt of fossilhydrogen annually that could be replaced by renewable hydrogen ata production cost of USD 1.6/kg by 2030. This would reduce
Oman’s emissions by more than 3 Mt CO2/yr, as well as savearound 1.5 bcm of natural gas by 2030. Total natural gas savings
could increase to a total of 3 bcm if Oman successfully meets its
2030 target of replacing 20% of natural gas in power generation
with renewables. These savings would be equivalent to roughly
20% of the country’s 2021 LNG exports. Depending on LNG
demand and supply trends in the coming years, Oman may
consider expanding its LNG infrastructure to increase export

and up to 8.5 Mt by 2050. These targets would make hydrogen
exports twice as large as the size of Oman’s current LNG exports inenergy-equivalent terms.
Oman has already taken steps to lay the groundwork forachieving its 2030 targets, demonstrating its commitment andproviding the certainty that investment and industry stakeholders
need to support the development of the sector. In 2022 thegovernment established an independent entity, Hydrogen Oman(HYDROM), to oversee and lead its national hydrogen strategy andmanage the project auction process. The geographical area
earmarked for the hydrogen projects to meet the 2030 target
stretches over 1 500 km2 and is intended to supply a total of 15 GW
of electrolyser capacity. The agreements are for a period of

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IEA. CC BY 4.0.

volumes.

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Oman’s long-term H2 targets exceed the size of its current LNG exports
Oman’s LNG exports vs renewable hydrogen export project pipeline and production targets

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IEA. CC BY 4.0.

IEA. CC BY 4.0.

Medium-term outlook for low-emission gases

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Namibia: A frontrunner in unleashing sub-Saharan Africa’s low-emission hydrogen potential
Namibia aims to start exporting low-emission hydrogen
derivatives (primarily ammonia) by 2026. Enhanced international
co-operation with future importing markets will be critical to unleash
the hydrogen potential of sub-Saharan Africa over the medium term.

to start the production of electrolytic hydrogen and its derivatives in2026 and gradually ramp up output to 1-2 Mt/yr by 2030, 5-7 Mt/yr
by 2040 and 10-15 Mt/yr by 2050. Namibia plans to develop threehydrogen valleys: the Southern region is expected to produce
5 Mt/yr of hydrogen equivalent by 2050, the Central region around3 Mt/yr and the Northern region 5 Mt/yr.
Namibia has actively engaged in the development of strategic
partnerships with future importing markets to facilitate thetechnology transfer and investment flows required to scale up its
hydrogen economy. At COP26 in November 2021 Namibia and theNetherlands agreed to sign a letter of intent on collaboration in theunderstanding (MoU) to develop a secure and sustainable supply of
raw and refined materials and renewable hydrogen. In June 2023
Dutch and Namibian companies signed an MoU to develophydrogen-related infrastructure to support trade between Namibia
and the Netherlands. In August 2023 Japan’s Itochu signed anagreement with Namibia to co-operate on the development of lowemission ammonia value chains.
Namibia’s Hyphen Hydrogen Energy project has a target to beginhydrogen production by the end of 2026 and ramp up output to
0.3 Mt/yr by 2030. Ammonia production would reach 2 Mt/yr. The
project has not reached FID yet, although there is a signed MoU for
the potential offtake of 1 Mt/yr of ammonia. In December 2021 an
MoU was signed between the Hyphen Hydrogen Energy Projectand Germany’s RWE Supply and Trading (0.3 Mt/yr), while inFebruary 2023, Korea’s Approtium and an undisclosed chemicalcompany signed an MoU for the offtake of 0.75 Mt/yr. Such longterm offtake agreements will be necessary to derisk investment
and enable FID.
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Namibia’s world-class wind and solar power potential could
translate into the cost-competive supply of low-emission hydrogenand its derivatives. According to the country’s Hydrogen Strategy,
the levelised cost of electrolytic hydrogen produced in Namibia
could decline to just USD 1.5-1.6/kg by 2030 at 95% hydrogenpurity, as required for the production of hydrogen derivatives suchas ammonia. Thiswould make Namibia’s hydrogen competitive on
an international scale. . Namibia published its Green Hydrogenand Derivatives Strategy in November 2022. The country expects

field of energy, in particular green hydrogen. A similar agreement
during the same COP was signed with Belgium. In March 2022
Namibia and Germany signed a joint declaration of intent toco-operate on the production, application and transport of greenhydrogen and synthetic fuels. At COP27 in November 2022
Namibia and the European Union signed a memorandum ofMedium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Medium-term outlook for low-emission gases

Namibia is building up international partnerships to develop its hydrogen economy
Timeline of key agreements and strategy documents related to hydrogen developments in Namibia

IEA. CC BY 4.0.
Notes: JDI = joint declaration of intent; LoI = letter of intent; MoU = memorandum of understanding.
Sources: IEA analysis based on various news reports.

Medium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Medium-term outlook for low-emission gases

E-methane: The next generation of low-emission gases
E-methane is produced by combining low-emission hydrogen and acarbon source. As recognised by the G7 Climate, Energy andEnvironment Ministers’ Communiqué, e-methane could play asignificant role in decarbonising existing gas networks without
the need for retrofitting. In contrast with biomethane and lowemission hydrogen, e-methane is not expected to expand
significantly over the forecast period considering the complexity ofsupply chains with LNG exporting countries. While no binding
agreements have been reached yet, these recent project proposals
could potentially enable 0.45 Mt/yr (or 0.6 bcm/yr) of e-methane
imports into Japan by 2030. A comprehensive overview of Japan’s
domestic and international e-methane projects is provided in the
IEA’s Quarterly Gas Report – Q2 2023. Japan Gas Association(JGA) is set to establish a clean gas certification scheme for e-

the underlying value chains and the high production costs.
Nevertheless, various companies in Japan and Europe areinvestigating project development options. Further technologicaldevelopment, coupled with policy support could lead to a take-off ine-methane production in the second half of the decade. In addition,
proper emissions accounting rules will be required to ensure that emethane contributes to carbon neutrality.

methane and biogas producers during the 2024/25 fiscal year.

Japan is a first mover in the e-methane space. The country’s
Strategic Energy Plan aims to ramp up annual e-methane supply to
0.28 Mt (or 0.38 bcm/yr) by 2030 and 25 Mt (or 34 bcm/yr) by 2050.
The country’s Basic Hydrogen Strategy, published in June 2023,
recognises the potential contribution of e-methane to energy supply
security and the need to develop international partnerships withproducing economies. Japanese utilities and trading houses havedeveloping a large-scale e-methane production unit in the
United States with an output in the range of 0.15-0.3 bcm/yr. Theliquefied e-methane could be sold into the global LNG market. The
project is expected to benefit from the tax credits under the Inflation

started jointly exploring the feasibility of developing e-methane

Reduction Act, with the companies aiming to take FID in 2024.

PAGE | 102

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In Europe, the European Network of Transmission System
Operators for Gas (ENTSOG) expects e-methane production toreach 0.2 bcm/yr by 2030 and increase to a range of 2-4 bcm/yr by
2050. The French Gas Association sees a stronger potential for emethane production in France: 0.3 bcm/yr by 2030 and 5.4 bcm/yr
by 2050. Besides several pilot projects undertaken in recent years(mainly in France and Germany), European companies are
considering the development of international supply chains for emethane. TotalEnergies and Tree Energy Solutions are consideringMedium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Medium-term outlook for low-emission gases

Japanese and European companies are targeting international e-methane supply chainsbcm/yr

Key planned e-methane import projects led by European and Japanese companies
0.9
TotalEnergies
andTree Energy
Solutions
0.6

Osaka Gas andMarubeni
Osaka Gas andSantosTokyo Gas,
Osaka Gas,
Toho Gas and
Mitsubishi
Corporation

0.3

Osaka Gas,
Tallgrass
Energyand Green
Plains0.0

Freeport LNG

Cameron LNG

Undisclosed LNG plantin Australia

Peru LNG

Undisclosed LNG plantin the United States
IEA. CC BY 4.0.

Sources: IEA analysis based on various news reports and company announcements.

AnnexMedium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

PAGE | 104

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Annex

AnnexMedium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Summary tables (1/2)
World natural gas consumption by region and key country (bcm)
2021

2022

2023

2024

2025

2026

Africa

161

169

164

170

178

184

191

Asia Pacific

834

891

877

904

939

990

1062

325

367

364

390

413

449

496

Central and South America

142

153

150

144

147

150

153

Eurasia

585

649

622

625

633

647

660

461

516

487

490

495

506

517

Europe

576

609

524

489

496

495

493

Middle East

546

562

580

590

602

621

642

North America

1079

1091

1144

1149

1139

1128

1124

868

874

919

922

912

901

899

3924

4124

4061

4071

4135

4214

4325

of which Chinaof which Russia

of which United States
World

PAGE | 105

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2020

AnnexMedium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Summary tables (2/2)
World natural gas production by region and key country (bcm)
2021

2022

2023

2024

2025

2026

Africa

239

260

245

251

259

265

270

Asia Pacific

622

646

655

668

677

680

690

189

205

216

227

234

242

250

Central and South America

150

148

152

145

149

152

153

Eurasia

866

961

865

806

828

846

867

692

762

672

620

641

659

677

Europe

230

222

230

218

221

220

216

Middle East

670

692

715

729

745

765

815

North America

1145

1183

1232

1264

1267

1290

1314

954

984

1021

1046

1050

1070

1091

3922

4112

4094

4081

4146

4218

4325

of which Chinaof which Russia

of which United States
World

PAGE | 106

IEA. CC BY 4.0.

2020

AnnexMedium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Regional and country groupings
Africa – Algeria, Angola, Benin, Botswana, Cameroon, Congo, Democratic
Republic of the Congo, Côte d’Ivoire, Egypt, Eritrea, Ethiopia,
Gabon, Ghana, Kenya, Libya, Morocco, Mozambique, Namibia,
Nigeria, Senegal, South Africa, Sudan, United Republic of
Tanzania, Togo, Tunisia, Zambia, Zimbabwe and other countries
and territories.1

Middle East – Bahrain, the Islamic Republic of Iran, Iraq, Israel,8 Jordan,
Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, the Syrian Arab
Republic, the United Arab Emirates and Yemen.
North Africa – Algeria, Egypt, Libya, Morocco and Tunisia.
North America – Canada, Mexico and the United States.
1 Individual data are not available and are estimated in aggregate for: Burkina Faso, Burundi, Cape

Asia Pacific – Australia, Bangladesh, Brunei Darussalam, Cambodia,
Chinese Taipei, India, Indonesia, Japan, Korea, the Democratic
People’s Republic of Korea, Malaysia, Mongolia, Myanmar,
Nepal, New Zealand, Pakistan, the People’s Republic of China,2
the Philippines, Singapore, Sri Lanka, Thailand, Viet Nam andother countries and territories.3
Central and South America – Argentina, Bolivia, Brazil, Chile, Colombia,
Costa Rica, Cuba, the Dominican Republic, Ecuador, El
Salvador, Guatemala, Haiti, Honduras, Jamaica, Netherlands
Antilles, Nicaragua, Panama, Paraguay, Peru, Trinidad andTobago, Uruguay, Venezuela and other countries and territories.4

Europe – Albania, Austria, Belarus, Belgium, Bosnia and Herzegovina,
Bulgaria, Croatia, Cyprus,5,6 the Czech Republic, Denmark,Estonia, Finland, the Former Yugoslav Republic of North
Macedonia, France, Germany, Gibraltar, Greece, Hungary,
Iceland, Ireland, Italy, Kosovo,7 Latvia, Lithuania, Luxembourg,
Malta, the Republic of Moldova, Montenegro, the Netherlands,
Norway, Poland, Portugal, Romania, Serbia, the Slovak
Republic, Slovenia, Spain, Sweden, Switzerland, Republic ofTürkiye, Ukraine and the United Kingdom.
European Union – Austria, Belgium, Bulgaria, Croatia, Cyprus,5,6 the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, theNetherlands, Poland, Portugal, Romania, the Slovak Republic,
Slovenia, Spain and Sweden.

authorities. The use of such data by the OECD and/or the IEA is without prejudice to the status of
the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms ofinternational law.

PAGE | 107

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Eurasia – Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, theRussian Federation, Tajikistan, Turkmenistan and Uzbekistan.

Verde, the Central African Republic, Chad, Comoros, Djibouti, Equatorial Guinea, Gambia, Guinea,
Guinea-Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Niger, Reunion,
Rwanda, Sao Tome and Principe, Seychelles, Sierra Leone, Somalia, Swaziland and Uganda.
2 Including Hong Kong.
3 Individual data are not available and are estimated in aggregate for: Afghanistan, Bhutan, Cook
Islands, Fiji, French Polynesia, Kiribati, the Lao People’s Democratic Republic, Macau (China),
Maldives, New Caledonia, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste,
Tonga and Vanuatu.
4 Individual data are not available and are estimated in aggregate for: Antigua and Barbuda, Aruba,
Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Falkland
Islands (Malvinas), French Guyana, Grenada, Guadeloupe, Guyana, Martinique, Montserrat, St
Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Suriname and Turks and Caicos Islands.
5 Note by the Republic of Türkiye.
The information in this document with reference to “Cyprus” relates to the southern part of theIsland. There is no single authority representing both Turkish and Greek Cypriot people on the
Island. The Republic of Türkiye recognises the Turkish Republic of Northern Cyprus (TRNC). Until
a lasting and equitable solution is found within the context of the United Nations, The Republic ofTürkiye shall preserve its position concerning the “Cyprus issue”.
6.Note by all the European Union Member States of the OECD and the European Union
The Republic of Cyprus is recognised by all members of the United Nations with the exception of
Türkiye. The information in this document relates to the area under the effective control of theGovernment of the Republic of Cyprus.
7 The designation is without prejudice to positions on status, and is in line with the United Nations
Security Council Resolution 1244/99 and the Advisory Opinion of the International Court of Justiceon Kosovo’s declaration of Independence.
8 The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli

AnnexMedium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

ANP

National Petroleum Agency (Brazil)

HH

Henry Hub

BMC

Colombian Mercantile Exchange (Colombia)

HoA

Head of Agreement

CBG

compressed biogas

IEA

International Energy Agency

CCUS

Carbon Capture, Utilisation and Storage

ICE

Intercontinental Exchange

CII

Carbon Intensity Indicator

ICIS

Independent Chemical Information Services

CME

Chicago Mercantile Exchange (United States)

IEA

International Energy Agency

CNE

National Energy Commission (Chile)

IMO

International Maritime Organization

CNPC

China National Petroleum Coporation

JGA

Japan Gas Association

CQPGX

Chongqing Petroleum Exchange (the People’s Republic ofChina)JKM

Japan Korea Marker

EEXI

Energy Efficiency eXisting ship Index

JODI

Joint Oil Data Initiative

EIA

Energy Information Administration (United States)

JPY

Japanese yen

LBG

liquefied biomethane

LEGWP

Low-Emission Gases Work Programme

LNG

liquefied natural gas

METI

Ministry of Economy, Trade and Industry (Japan)

MoU

Memorandum of Understanding

MME

Ministry of Mines and Energy (Brazil)

MSW

municipal solid waste

NBP

National Balancing Point (United Kingdom)

NDRC

National Development and Reform Commission (the People’s
Republic of China)

ENARGAS National Gas Regulatory Entity (Argentina)
ENTSOG

European Network of Transmission System Operators for Gas

EPIAS

Energy Markets Operations Inc. (Republic of Türkiye)

EPPO

Energy Policy and Planning Office (Thailand)

EU

European Union

EUR

Euro

FID

final investment decision

FLNG

floating LNG

FSRU

floating storage and regasification unit

FY

fiscal year

NPT

Nadym Pur Taz (Russia)

GDPgross domestic productOECD

Organisation for Economic Co-operation and Development

GHGs

greenhouse gases

ONS

National Electric System Operator (Brazil)

GIE

Gas Infrastructure Europe

OSINERG

Energy Regulatory Commission (Peru)

GX

Green Transformation programme (Japan)

PMI

Manufacturing Purchasing Managers’ Index

PAGE | 108

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Abbreviations and acronyms

AnnexMedium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

PNGRB

Petroleum and Natural Gas Regulatory Board (India)

PPAC

Petroleum Planning and Analysis Cell (India)REC

renewable energy certificate

RFO

Residual Fuel Oil

SBLStrategic Buffer LNG

SMR

steam methane reforming

SPA

Sales and Purchase Agreement

TFFS

Task Force on Gas and Clean Fuels Market Monitoring and
Supply and Security

TTF

Title Transfer Facility (the Netherlands)

UGS

underground storage

USD

United States dollar

y-o-y

year-on-year

MBtu
Mt
Mt/yr
m3/hr
m3/yr
Nm3
TWh
t/yr

million British thermal units
million tonnes
million tonnes per year
cubic metres per hour
cubic metres per year
normal cubic metre
terawatt hour
tonnes per year

bcf
bcf/d
bcm

billion cubic feetbillion cubic feet per day
billion cubic metres

bcmeq

billion cubic metre equivalentbillion cubic metres per year
gigajoulegigawatt
kilowatt hourbcm/yrGJ
GW
kWh

PAGE | 109

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Units of measureAnnexMedium-Term Gas Report 2023
Including the Gas Market Report, Q4-2023

Acknowledgements, contributors and credits
This publication has been prepared by the Gas, Coal and Power

Ravi Kumar Singh (Indian Gas Exchange) provided invaluable

Markets Division (GCP) of the International Energy Agency (IEA).
The analysis was led and co-ordinated by Gergely Molnár. Louis
Chambeau, Carole Etienne, Gergely Molnár, Takeshi Furukawa andinsights and data on biogas/biomethane developments in India.

Frederick Ritter are the main authors.

The development of this report benefitted from contributions
provided by the following IEA colleagues: Elisa Asmelash (hydrogendevelopments in Oman), Tomás de Oliveira Bredariol (methane
emissions Africa). Jose Miguel Bermudez Menendez (HAF),Francesco Pavan (HAF) and Amalia Pizarro (HAF) provided
guidance on hydrogen.
support on power modelling. Alexander Bressers (OIM) and Jacob
Messing (OIM) provided valuable comments on oil market

fundamental to the report.
The IEA Communication and Digital Office (CDO) provided
production and launch support. Particular thanks go to Jethro
Mullen and his team: Poeli Bojorquez, Astrid Dumond, Grace
Gordon, Julia Horowitz, Oliver Joy, Isabelle Nonain-Semelin, Oscar
Padula, Charner Ramsey, Clara Vallois and Therese Walsh.

Keisuke Sadamori, Director of the IEA Energy Markets and Security(EMS) Directorate and Dennis Hesseling, Head of Gas, Coal andPower Markets Division, provided expert guidance and advice. The
Report benefitted from the review of senior management, including
Tim Gould, Chief Energy Economist.

Eren Cam (GCP) and Carlos Fernandez Alvarez (GCP) provided

Timely and comprehensive data from the Energy Data Centre were

Justin French-Brooks edited the report.
The report was made possible by assistance from Tokyo Gas.
The individuals and organisations that contributed to this report are
not responsible for any opinion or judgement it contains. Any error
or omission is the sole responsibility of the IEA.
For questions and comments, please contact GCP (gcp@iea.org)
or Gergely Molnár (Gergely.Molnar@iea.org).

PAGE | 110

IEA. CC BY 4.0.

dynamics. Hiroyasu Sakaguchi provided support.

International Energy Agency (IEA)
This work reflects the views of the IEA Secretariat but does notnecessarily reflect those of the IEA’s individual member countries orof any particular funder or collaborator. The work does notconstitute professional advice on any specific issue or situation. The
IEA makes no representation or warranty, express or implied, inrespect of the work’s contents (including its completeness or
accuracy) and shall not be responsible for any use of, or relianceon, the work.

Subject to the IEA’s Notice for CC-licenced Content, this work islicenced under a Creative Commons Attribution 4.0 International
Licence.
This document and any map included herein are without prejudice
to the status of or sovereignty over any territory, to the delimitationof international frontiers and boundaries and to the name of any
territory, city or area.
Unless otherwise indicated, all material presented in figures andtables is derived from IEA data and analysis.
IEA Publications
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Contact information: www.iea.org/about/contact

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Annex