APERC
Gas Report

2023

0

PUBLISHED BY:
Asia Pacific Energy Research Centre (APERC)
Inui Building, Kachidoki 11F, 1-13-1 Kachidoki
Chuo-ku, Tokyo 104-0054 Japan
Tel:
Fax:
E-mail:Website:Cover photo:(813) 5144-8551(813) 5144-8555
master@aperc.or.jp (administration)
https://aperc.or.jp/
SEMPRA INFRASTRUCTURE©2024 Asia Pacific Energy Research Centre

1

Contents
Foreword ............................................................................................................... 4
Acknowledgements ............................................................................................... 5
Abbreviation and acronyms .................................................................................. 6
List of figures ......................................................................................................... 7
Key Highlights ....................................................................................................... 8
Section 1: Gas updates in APEC economies ......................................................... 11
Section 2: Gas Demand ........................................................................................ 15
2-1

World and APEC natural gas demand ....................................................... 15

2-1-1

Gas demand in the United States ...................................................... 18

2-1-2

Gas demand in Russia ....................................................................... 19

2-1-3

Gas demand in China ........................................................................ 20

2-1-4

Gas demand in Northeast Asia .......................................................... 21

2-1-5

Gas demand in Southeast Asia .......................................................... 22

2-2

Gas demand outlook ............................................................................... 23

Section 3: Gas supply........................................................................................... 26
3-1

World and APEC natural gas supply.......................................................... 26

3-1-1

Gas supply in the United States ......................................................... 27

3-1-2

Gas supply in Russia ......................................................................... 28

3-1-3

Gas supply in Canada........................................................................ 28

3-1-4

Gas supply in China .......................................................................... 29

3-1-5

Gas supply in Australia ...................................................................... 30

3-1-6

Gas supply in Southeast Asia ............................................................. 31

3-2

Gas production outlook ........................................................................... 33

Section 4: Gas trade ............................................................................................. 35
4-1

World and APEC natural gas trade............................................................ 35

4-2

Gas imports in the APEC region ............................................................... 36

4-2-1 LNG imports in the APEC region ............................................................ 37
4-2-2

Pipeline gas imports in the APEC region ............................................ 382

4-3

Gas exports in the APEC region ................................................................ 39

4-3-1

LNG exports in the APEC region ........................................................ 40

4-3-2

Pipeline gas exports in the APEC region ............................................ 42

4-4

Gas trade outlook in the APEC region....................................................... 43

4-4-1

Net gas imports outlook in the APEC region ...................................... 43

4-4-1

Net gas exports outlook in the APEC region ...................................... 44

Section 5: Gas prices ............................................................................................ 46
5-1

Gas prices in 2022 ................................................................................... 46

5-2

Gas prices in 2023 ................................................................................... 47

References ........................................................................................................... 493

Foreword
Global natural gas demand was expected to grow strongly in 2022 as the world’s economies continued
to recover from the COVID-19 pandemic, and decarbonization strategies encouraged fuel-switchingfrom coal to gas. However, gas supply disruptions in 2022 caused sharp increases in gas prices, whichdampened demand growth. As a result, global gas demand grew less than 1% in 2022.
The APEC region, which includes the three largest gas consumers in the world, accounted for 58% of
the world’s gas consumption in 2022 and was also affected by the supply disruptions. However, the gas
consumption picture was mixed in the APEC region. Gas consumption in the United States and Canadarose by 3.6% and 5.7%, respectively. But gas demand declines in Russia, China, Japan, and Thailand
offset much of that growth. In total, APEC gas demand grew only 0.7% in 2022.
The market dynamics of 2022 highlighted the energy security challenges of the gas-importing
economies in the APEC region as the high LNG prices imposed increased costs on those economies.
With the growing interest in LNG regasification projects observed in 2022 and 2023 in Southeast Asia
and China, the region’s exposure to future fluctuations in gas prices is likely to increase.
Natural gas production growth in the APEC region in 2022 continued to be largely concentrated in its
largest producers: the United States, China, Canada and Australia. The observed decline in gas
production in other APEC economies, mainly in Southeast Asia, highlight the need for additional
upstream and midstream investment to enhance energy security and provide sufficient gas supplies tosupport economic growth.
The 2023 edition of the APERC Gas Report reflects the ongoing developments and challenges in the
global gas market with a focus on the APEC region. I hope this report will be one of the references tobe considered by policymakers across the APEC region when developing energy security and energy
transition plans and programs. I would also like to express my sincere gratitude to the authors andcontributors for their time and effort in writing and publishing this report. I am also grateful to APEC
member economies for providing updated data through the APEC Expert Group on Energy Data andAnalysis (EGEDA).

Kazutomo IRIE
President
Asia Pacific Energy Research Centre
May 2024

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Acknowledgements
We would like to take this opportunity to thank the APEC Expert Group on Energy Data and Analysis for
supplying economy data, and researchers at APERC for providing the latest update on the gas
development of each APEC economy. We also thank the administrative staff at APERC for their support.
Authors
Rodrigo MARTINEZ PICAZO ● Yasmin FOULADI
Editors
Glen E. SWEETNAM ● Munehisa YAMASHIRO

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Abbreviation and acronyms
Abbreviation
bbl

barrelbcf/dbillion cubic feet per day

bcm

billion cubic meter

GHG

greenhouse gas

GJgiga joulekWhkilowatt hourm3

cubic meter

Mtpa

million tonnes per annum

MMBtu

million British thermal units

SPAs

sale and purchase agreements

y-o-y

year-on-year

Acronyms
APEC

Asia-Pacific Economic Cooperation

APERC

Asia Pacific Energy Research Centre

EIA

Energy Information Administration

FSRU

Floating Storage Regasification Unit

IEA

International Energy Agency

JKM

Japan-Korea Marker

LNG

Liquefied Natural Gas

NEA

Northeast Asia

NBP

National Balancing Point

SEA

Southeast Asia

TTF

Title Transfer Facility

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List of figures
Figure 2.1: Natural gas demand in APEC and the world, 2012-2022 (bcm) ........................................................16
Figure 2-2: Natural gas demand in APEC by sector, 2012-2022 (bcm).................................................................17
Figure 2-3: Changes in natural gas demand in APEC by sector, 2012-2021 (bcm)..........................................18
Figure 2.4: Natural gas demand in the United States by sector, 2012-2022 (bcm) .........................................19
Figure 2.5: Natural gas demand in Russia by sector, 2012-2022 (bcm) ...............................................................20
Figure 2.6: Natural gas demand in China by sector, 2012-2022 (bcm) .................................................................21
Figure 2.7: Natural gas demand in NEA by sector, 2012-2022 (bcm) ...................................................................22
Figure 2.8: Natural gas demand in SEA (Southeast Asia) by sector, 2012-2022 (bcm) ..................................23
Figure 2-9: Natural gas demand outlook in APEC economies, 2022-2030 (bcm) ............................................25
Figure 3-1: Natural gas production in APEC, 2012-2022 (bcm) ...............................................................................26
Figure 3-2: Gross natural gas production in the United States, 2012-2022 (bcm) ...........................................27
Figure 3-3: Gross natural gas production in Russia, 2012-2022 (bcm) .................................................................28
Figure 3-4: Natural gas production in Canada, 2012-2022 (bcm) ..........................................................................29
Figure 3-5: Natural gas production in China, 2012-2022 (bcm) ..............................................................................30
Figure 3-6: Natural gas production in Australia, 2012-2021 (bcm) ........................................................................31
Figure 3-7: Natural gas production in Southeast Asia, 2012-2022 (bcm)............................................................32
Figure 3-8: Natural gas production outlook in APEC economies, 2022-2030 (bcm) ......................................34
Figure 4-1: Natural gas trade, 2012-2022 (bcm) ............................................................................................................35
Figure 4-2: APEC natural gas exports and imports, 2012-2022 (bcm) ..................................................................36
Figure 4-3: Total natural gas imports by APEC economy, 2012-2022 (bcm) ......................................................37
Figure 4-4: LNG imports by APEC economy, 2011-2021 (bcm) ...............................................................................38
Figure 4-5: Pipeline imports by APEC economy, 2012-2022 (bcm)........................................................................39
Figure 4-6: Natural gas exports by APEC economy, 2012-2022 (bcm) .................................................................40
Figure 4-7: LNG exports by APEC economy, 2012-2022 (bcm) ...............................................................................41
Figure 4-8: Pipeline exports by APEC economy, 2012-2022 (bcm) ........................................................................42
Figure 4-9: Net imports outlook in the APEC region, 2022-2030 (bcm) ..............................................................44
Figure 4-10: Net exports outlook and in the APEC region, 2022-2030 (bcm) ...................................................45
Figure 5-1: Monthly natural gas spot prices, January 2015-January 2024 (USD/MMBtu) ............................46
Figure 5-2: Monthly natural gas spot prices, January 2022-January 2024 (USD/MMBtu) ............................48

7

Key Highlights
Asia-Pacific Economic Cooperation (APEC) economies accounted for 58% of the world's natural
gas consumption in 2022. Three APEC economies were the largest gas consumers in the world in 2022:
The United States, Russia and China. The United States remained the largest gas consumer in the world
at 909 bcm, 22% of the world’s natural consumption in 2022. In the same year, Russia consumed 472
bcm, while China consumed 359 bcm, accounting for 12% and 9% of the world’s consumption,
respectively.
APEC’s natural gas consumption stagnated in 2022 with a 0.7% annual growth rate. The UnitedStates and Canada drove consumption growth in the region with a 3.6% and 5.7% growth rate,
respectively. However, consumption contractions in Russia, China, Japan, and Thailand offset significant
growth in the region. Demand contraction in the region was driven by slower economic growth in China,
the impact of international sanctions on the Russian economy, lower gas consumption by the power
sector in Japan, and lower domestic production coupled with high import prices in Thailand.
Of all the downstream sectors, the power and heat sector consumed the most natural gas in the
APEC region, accounting for 40% of total gas consumption. The power and heat sector accounted
for 944 bcm of regional consumption in 2021 and presented a year-over-year growth of 5.3%. The next
two major natural gas users were the building and industry sectors---together accounting for 38% of
natural gas consumption in the region in 2021.
Medium-term outlooks for gas demand indicate that China will continue to drive gas demand
growth in the region. Projections suggest that China will continue increasing its gas consumption as
the global energy system transitions toward cleaner sources, largely due to the economy’s ongoing shift
from coal to gas.
The APEC region continued to be a dominant natural gas producer in 2022. The region accounted
for 58% of worldwide gas production. The region produced 2,422 bcm, a 0.7% contraction comparedto the volume produced in the previous year. The contraction was primarily due to the fall in Russian
production, a 11.8% decrease, as OECD Europe sought other gas sources amid the Russia-Ukraine war.
The missing Russian gas volume was mostly offset by production growth in the United States, China,
Canada, Australia, and Malaysia.
Natural gas production in 2022 continued to be dominated by shale gas in the United States andconventional gas in Russia. Marketed gas production in the United States reached 1013 bcm (3.7% yo-y) while Russia reached 634 bcm (-11.8% y-o-y). The next largest producers in the APEC region,
Canada, China, and Australia showed gas production growth rates above 4%, with Canada reporting thelargest percentual growth supported by tight gas production.
Natural gas production in Southeast Asia continued to decline in 2022. The majority of gas
producers in APEC Southeast Asia showed production declines throughout the last decade, a trend thatwas not reverted in 2022. Indonesia and Thailand experienced the steepest declines in gas production
over the last decade, largely due to their reliance on maturing gas fields. In 2022, Indonesia and Thailand
reported a 2.6% and 17.2% decrease in production, respectively. Malaysia is the only producer in the
sub-region that added significant production volumes this decade. In 2022, Malaysia’s production
increased by 6.4%.

8

Medium-term outlooks for gas production indicate that the United States and China will continue
to drive gas production growth in the region. Forecasts based on current trends in the global energy
system, with a focus on energy transition, suggest that gas production in the United States and China
will continue to grow throughout this decade. In contrast, projections indicate that production inSoutheast Asia and Russia are unlikely to rebound before 2030.
Total natural gas imports in the APEC region presented a 3.1% y-o-y decline. The Russia-Ukraine
war significantly disrupted the global gas market, leading to an unprecedented supply crunch andrecord-high prices in 2022. The reconfiguration of Europe's gas supply affected importers worldwide,
but its impact on China's imports was particularly notable. China’s total gas imports declined by 9.9%
as high prices and slower economic growth limited gas demand.
LNG imports in the APEC region showed a 5.9% y-o-y decline in 2022. The decline was driven by amajor contraction in China’s LNG imports, offsetting the modest growth observed in other economies.
A slower economic growth and record high prices for LNG resulted in China limiting LNG imports,
leading to a contraction of 19.6% in 2022.
Gas pipeline imports in the APEC region showed a 0.3% y-o-y growth in 2022. These flat growth
rates for pipeline imports were the result of pipeline gas imports contractions in Russia and Mexico,offsetting the growth observed in the United States and China.
Total gas exports in the APEC region showed a 7.6% y-o-y decrease in 2022. The main driver forthe contraction in gas exports were the significantly lower pipeline exports flowing from Russia into
Europe. Russia’s annual exports dropped by a dramatic 30% as the economy lost partial access to theEuropean market due to sanctions resulting from the Ukraine invasion and the interruption of gas flows
through the Nord Stream pipeline.
LNG exports in the APEC region experienced a 6.7% y-o-y increase in 2022. The growth in LNG
exports was driven by the United States and Malaysia increasing their annual exports by 14% and 13%,respectively. U.S. LNG’s share in the European market increased as Europe scrambled to lessen its
reliance on Russian gas imports. Malaysian LNG export growth in 2022 was driven by Asian buyers as
U.S. and Qatari LNG was partially redirected to Europe.
Gas pipeline exports in the APEC region showed a 19% contraction in 2022. The reduction inpipeline exports was driven by the sharp decline in Russian gas flowing into Europe. Russian pipeline
exports saw a 37% y-o-y decrease in 2022, mainly attributed to the interruption of the Nord Stream
operations.
Gas prices were extremely volatile in 2022.

Supply disruptions caused LNG prices to reachunprecedented levels in March 2022 that were then exceeded in August. Increased gas supplies andother market adjustments caused LNG prices to moderate in 2023 and return to historic levels in late2023 and 2024.
Medium-term outlooks for gas trade expect that China, Chinese Taipei, Thailand, and Viet Nam
will drive import growth in the region. Projections that focus on the ongoing transition in the global
energy system suggest that China’s imports are set to nearly double by 2030. In Southeast Asia, thedecline in domestic production and efforts to reduce emissions indicate that the sub-region may growmore dependent on LNG imports.

9Medium-term outlooks for gas trade project that the United States will drive export growth in
the region. U.S. gas exports are expected to more than double by 2030. The bulk of the increase inexports will come in the form of LNG exports supported by sizeable gas production capabilities, as well
as extensive liquefaction infrastructure. Although Russia exports are not expected to fully recover, theeconomy is planning to increase its exports to the Asian market via LNG exports and new pipeline
projects.
The pause on future LNG exports permits by the United States will impact investors who had
made decisions based on selling to China and Japan. The United States, in late January 2024,
announced that it is temporarily pausing determinations on pending applications of LNG exports to
non-FTA (Free Tade Agreement) countries until it can determine whether additional LNG exports are in
the public interest. Neither Japan nor China have FTAs with the United States, so while their current LNG
supply from the United States will not be impacted by this new policy, future U.S. LNG projects thatwere investing based on Japanese and Chinese consumption habits will now be under additional review.

10Section 1: Gas updates in APEC economies
EconomyAustralia

Update• Australia's natural gas consumption increased by 4.2% in 2022.
• Australia was the world's leading LNG exporter in 2022. LNG exports increased by
0.9%, from 104.1 bcm in 2021 to 105.1 bcm in 2022.
• Prelude LNG export facility restarted production in April 2022 after a fire incident
in December 2021. Extensive maintenance halted exports again in 2023.
• A second gas processing train is under construction at the Pluto LNG plant. This
expansion will increase liquefaction capacity by 5 Mtpa and it is expected to comeonline by 2026.

Brunei
Darussalam

Canada• Brunei's natural gas consumption increased by 14.5% in 2022.
• LNG exports declined by 15.5% following a decrease in gas production in 2022.
The reduction in gas production was due to unscheduled maintenance andrejuvenation activities in existing wells.
• Canada's natural gas consumption increased by 5.7% in 2022.
• Natural gas production rose by 7.4% to 177.6 bcm in 2022, driven by increased
domestic demand and exports to the United States.
• The first LNG export facility, LNG Canada, with a 14 Mtpa capacity, is underconstruction and expected to start operations in 2025.
• Woodfibre LNG, the second LNG export facility in Canada, with a 2.1 Mtpa
capacity, is under construction and expected to start operations in 2027.

Chile• Chile's natural gas consumption increased by 4.1% to 6.1 bcm in 2022, matching
the pre-pandemic volumes of 2019.
• Natural gas imports via pipeline from Argentina increased by 300% in 2022. The
additional natural gas imports were used to produce electricity. Chile’s power
sector has increased gas generation capacity to balance variability in renewable
power output.

China• China's natural gas consumption contracted by 1.1% in 2022, driven by slower
economic growth, price sensitivities, and the implementation of the zero-COVID
policy.
• Natural gas production grew by 6.3% in 2022, driven by conventional and tightgas developments.
• China’s LNG exports decreased by 19.6% in 2022, resulting from lower gas
demand and increased domestic gas production.
• Total LNG import terminal capacity reached 145 bcm in 2022, with 171 bcm underconstruction expected to come online by 2026.

Hong Kong,
China• Gas consumption decreased by 6.4% in 2022. Total energy consumption in Hong
Kong, China contracted as the COVID-19 pandemic affected trade, tourism, andretail.

11

Economy

Update• The Hong Kong Offshore LNG terminal, the first LNG terminal in Hong Kong,
China, with a capacity of 1.2 Mtpa, started operations in summer 2023.

Indonesia• Indonesia’s gas consumption increased by 2.9% in 2022. Gas consumption
remained below 2019’s level.
• Natural gas production continued its downward trend in 2022, decreasing by
2.6% due to depleting mature gas fields.
• LNG exports increased by 4.7% in 2022; however, total gas exports decreased as
pipeline exports contracted by 21% in the same year. Temporal issues with
upstream production resulted in the curtailment of pipeline exports to Singapore.

Japan

Korea

• Japan's gas consumption contracted by 2.8% in 2022, driven by less use in the
power sector. Nuclear generation and renewables partially displaced gas
consumption for electricity generation.
• LNG imports decreased by 3.1% in 2022. Even amid the contraction, Japan was
the largest LNG importer in the world due to China’s significant decrease in LNG
imports in the same year.
• Korea’s gas consumption increased marginally by 0.9% in 2022.
• Korea remained the third largest LNG importer in the APEC region behind China
and Japan. LNG imports grew marginally by 1% in 2022.
• Korea’s 10th Basic Plan for Power Supply prioritizes growth in nuclear generation
and renewable electricity over the expansion of gas generation.

Malaysia• Malaysia’s gas consumption increased by 2.4% in 2022.
• Malaysia’s gas production increased by 6.4% in 2022, driven by growth inconsumption and exports.
• Malaysia’s total gas exports increased by 14.3% in 2022. LNG exports grew by
13.1% in the same year, driven by gas exports to Japan and South Korea.

Mexico• Mexico's natural gas consumption decreased by 1.6% in 2022.
• Natural gas production increased by 5.4% in 2022. Gas production continued tobe below the levels observed before COVID-19.
• Natural gas pipeline imports decreased by 3.9% in 2022. The drivers behind thiscontraction were high prices and prioritization of U.S. consumers during winter.
• LNG imports continued to be less than 1 bcm in 2022. Gas pipelines connectingWest Texas to Central and Southwest Mexico, which began operation between
2019 to 2021, decreased reliance on LNG imports.
• The LNG liquefaction plant, Energia Costa Azul, with a capacity of 3.25 Mtpa isunder construction and expected to be in operation in 2025.

New Zealand• Gas consumption contracted by 9.2% in 2022, driven by a production decline of
the same magnitude. The power and industry sectors reflected most of thecontraction in gas use.
• The decline in gas production can be attributed to the output contraction
observed in Pohokura, New Zealand’s largest gas field. The unexpected rapid

12

Economy

Updatedecline in gas production started in 2020 and production levels did not recoverin 2022.

Papua New
Guinea• Gas consumption increased by 13.5% in 2022 to 1.1 bcm, crossing the 1 bcm
threshold for the first time.
• Gas production increased by 1.3% in 2022. Over 90% of the gas produced wasexported as LNG.

Peru

The
Philippines• Natural gas consumption increased by 15.2% in 2022, surpassing pre-pandemic
levels as natural gas comprised of a larger share in the Peruvian energy mix.
• Natural gas production grew by 17.8% in 2022, reaching the levels observed in2019.
• Gas production declined by 5.6% in 2022, continuing the downward trend in gas
production from the Malampaya field. The Malampaya field is the only source ofgas for the Philippines, and it is expected to be depleted by 2027.
• Gas consumption contracted by 5.6% in 2022. The decrease in consumption
responded to the decline in domestic gas production.
• The Philippines is preparing to start receiving LNG imports. The AG&P LNG importterminal, the first one in The Philippines, started operations in April 2023. Three
additional regasification terminals are under construction with a combined
capacity of 11.46 Mtpa. The regasification terminals are expected to come onlineby the end of 2024.

Russia• Gas production contracted by 11.8% in 2022 as OECD Europe looked for othersources of gas amid the Russia-Ukraine war.
• Gas consumption contracted by 3.1% in 2022 as Russia faced economic sanctions
derived from the Russia-Ukraine war.
• Gas exports through pipelines contracted by 37% in 2022 due to the abrupt
decline in European imports mainly driven by the Nord Stream halt.
• LNG exports increased by 4% in 2022 because of higher LNG exports to China
and Europe.
• Russia is currently building 44.7 bcm of yearly liquefaction capacity to diversify its
importers.

Singapore• Gas consumption contracted by 4.5% in 2022.
• Pipeline gas imports from Indonesia decreased by 20.1% in 2022. Issues with
upstream production in Indonesia led to the curtailment of gas exports. Depletionof gas production in Indonesia may force the prioritization of domestic
consumption over exports in the coming years.
• LNG imports increased by 4% to partially offset lower pipeline imports.

ChineseTaipei• Gas consumption increased by 4% in 2022.
• LNG imports grew by 4.1% and reached an all-time high of 26.6 bcm in 2022.

13

Economy

Update• A new regasification terminal, Taoyuan LNG, with a capacity of 3 Mtpa is underconstruction and is expected to be operational by 2025. Expansion at the YungAn terminal is also under construction and is expected to be operational by 2027.

Thailand• Gas consumption contracted by 7.7% in 2022. The decrease in domestic gas
production and high import prices put pressure on price sensitive users, such as
the power sector.
• Gas production contracted by 17.2% in 2022. The decrease in domestic
production is attributed to a reduction in output from the Erawan gas field.
• Total imports increased by 11.3% in 2022 to offset the loss in domestic
production. LNG imports increased by 21% in 2022, while pipeline imports of
Burmese gas decreased by 0.7% in the same year.
• Two new regasification terminals, Map Ta Phut 2 and Nong Fab LNG, started
operations in 2022, increasing Thailand’s regasification capacity by 15 Mtpa.

United States• Gas consumption increased by 3.6% in 2022, reaching 2019’s levels.
• Gas production increased by 3.76% in 2022, reaching the all-time high level of1013 bcm.
• Total gas exports increased by 6.3% in 2022, driven by an increase in LNG exports.
• LNG exports increased by 14.3% in 2022. U.S. LNG exports reached 103 bcm in2022, positioning the United States as the second largest LNG exporter in theworld after Australia.
• The expansion in LNG exports was driven by increased exports to Europe, mainly
to France, Spain, The Netherlands, and The United Kingdom.
• The United States has three liquefaction projects expected to start operations by
2025: Golden Pass LNG (18.1 Mtpa), Corpus Christi LNG III (11.5 Mtpa), andPlaquemines LNG (24.0 Mtpa). Additionally, two projects under construction, Port
Arthur LNG (13.5 Mtpa) and Rio Grande LNG (17.6 Mtpa), will further increaseliquefaction capacity by 2027-28.
• The United States, in late January 2024, announced that it is temporarily pausing
determinations on pending applications of LNG exports to non-FTA (Free Tade
Agreement) countries until it can update the economic and environmental
analyses used to determine whether additional LNG export authorization requests
to non-FTA countries are in the public interest. Existing authorizations for LNG
exports and projects that are already under construction will remain unaffected.

Viet Nam• Gas consumption increased by 8.9% in 2022. Gas consumption was dictated bydomestic gas production which showed the same growth rate in 2022.
• The first regasification terminal, Thi Vai LNG I, with a capacity of 1 Mtpa begancommercial operations in 2023.
• 8.1 Mtpa of additional regasification capacity is currently under construction.

14

Section 2: Gas Demand
2-1World and APEC natural gas demand

Global and APEC natural gas consumption has been on the rise since 2012, with the exception of 2020
due to the COVID-19 pandemic. APEC's gas consumption grew 27% in the last decade, from 1,846 bcm
in 2012 to 2,350 bcm in 2022. The growth in the APEC region during the last 10 years was higher thanglobal natural gas consumption growth at 21%, leading to APEC’s share of global gas demand
increasing from 55% to 58% during the same period.
Global natural gas consumption experienced marginal growth in 2022 at less than 1%. This low growth
can be attributed to the Russia-Ukraine war exacerbating already high gas prices in 2022, as well as thealready tight supply conditions that started during the latter half of 2021 as demand increased due tothe global economy rebounding from the COVID-19 crisis. APEC’s natural gas consumption growth alsostagnated, 0.7% in 2022 relative to 2021 levels, driven by differing consumption trends in the region.
The United States and Canada drove consumption growth in the region with a 3.6% and 5.7% growthrate, respectively. However, consumption contractions in Russia, China, Japan, and Southeast Asia offset
significant growth in the region. The United States remained the dominant natural gas user at 22% ofworldwide gas consumption, followed by Russia at 12%, and China at 9%.
Russia represented the largest consumption contraction in absolute numbers in the region in 2022. The
impact of international sanctions on the Russian economy, resulting from the Russia-Ukraine war,caused a shrinkage in economic activities and domestic gas consumption. Russian natural gas domestic
demand fell 15.2 bcm in 2022. For the APEC region, Russia’s decrease in gas consumption offset almost
50% of the growth observed in the United States (31 bcm) for the same year.
China and Japan also experienced a demand contraction in 2022, at 1.1% and 2.8% respectively. China’s
decrease in demand resulted from slower economic growth, price sensitivities, and the implementationof the zero-COVID policy that hindered economic recovery (IEA, 2023a). The decrease in Japan’s gas
demand was caused by a contraction in gas consumption in the power sector as the economy
accelerated efforts to restart its nuclear fleet to reach their projected goal of having nuclear represent
20-22% of their power generation mix (IEEFA, 2023), which offset gas consumption growth in theindustrial and commercial sectors.
Natural gas consumption in Southeast Asia also showed an overall decrease in 2022. Thailand drove thecontraction in natural consumption in the sub-region with a 7.7% decrease in demand (3.8 bcm). The
significant drop in demand mainly resulted from a decrease in domestic gas production and high gas
import prices affecting power producers. This triggered the economy’s reduced gas consumption andincreased coal, diesel, and fuel oil consumption for electricity generation as part of its short-term energy
security measures.

15

Figure 2.1: Natural gas demand in APEC and the world, 2012-2022 (bcm)
4 500

100%

4 000

90%
Non-APEC
80%

3 500

70%

3 000

60%
2 500

Other APEC
SEA
NEA

Mexico
50%

2 000
40%

1 500

30%

CanadaChina
Russia
USA

1 000

20%

500

APEC share

10%

0

0%
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: CEDIGAZThe APEC region used approximately 40% of its natural gas supply for power and heat generation in
2021. The power and heat sector accounted for a consumption of 944 bcm in the region in 2021 andpresented a year-over-year growth of 5.3%. Although these sectors enjoyed relatively low gas prices atthe beginning of 2021, prices increased sharply due to market tightening resulting from the initial
COVID-19 recovery. High prices hampered a further demand increase during the second half of 2021 asusers were forced to look for cheaper fuel alternatives.
The next two major natural gas users comprised of the building and industry sectors--together
accounting for 38% of natural gas consumption in the region. The industry sector proved more resilient
as it continued to grow over the last decade, even amid the COVID-19 pandemic. In 2021, the industry
sector presented a y-o-y growth of 3.1%. Building natural gas consumption increased by 4.6% in thatsame year; however, the sector did not return to pre-pandemic levels as commercial activities were still
recovering.
The transport and non-energy sectors together accounted for 9.1% of regional gas consumption in
2021. Both sectors presented clear signs of demand recovery in 2021, with the transport sector
surpassing levels observed in 2019. Although the non-energy sector presented a y-o-y growth of 12%
in consumption levels, it did not reach pre-pandemic levels. Most of the demand contraction in the
sector resulted from slow growth in fertilizer production in the United States (EIA, 2022).

16

Figure 2-2: Natural gas demand in APEC by sector, 2012-2022 (bcm)
2 500

25%
Other
Non-energy

2 000

20%
Agriculture

1 500

15%

Transport
Building

1 000

10%

Industry
Own use

500

5%

Other
Transformation
Power and Heat00%2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Gas share (ofTPES)

Note: Sectorial data for the year 2022 was not available at the time of writing.
Gas demand in the “power and heat” sector considers gas consumption for electricity generation, heat production in combined
heat and power cycles, as well as district cooling. Gas consumption for heating and cooling in residential and commercial buildings
is included in the “building” sector.
Source: CEDIGAZ, EGEDA

The positive changes (increments) in natural gas consumption in the region between 2012 and 2021
were driven predominantely by the industry, building, and power and heat sectors. Most of theconsumption increase occured in China and the United States, as they accounted for 76% of the demand
increase in the region for the time period analyzed.
Demand expansion in China, the largest one in the region at 216 bcm, came mostly from its industry
sector (107 bcm). The expansion in demand was mainly driven by the shift from coal to less polluting
energy sources, especially coal to gas in industry and electricity generation.
The United States also experienced substantial growth in natural gas demand, with 155 bcm added in
the last decade, mainly driven by power and heat generation. These sectors added 65 bcm of natural
gas consumption, as increased electricity and heat demand coupled with coal-to-gas transition
propelled demand in the economy.
Russia presented a more subtle growth in gas demand during the previous decade, adding 46 bcm ofnatural gas in 2021 compared to 2012. Unlike the rest of the economies, the power and heat sectors in
Russia presented contractions in demand resulting from higher power generation from coal,hydropower, and nuclear sources. However, this decline was offset by more robust demand from othersectors, including heating in residential and commercial buildings, which required an additional 66 bcm
of gas over the same period.

17

Figure 2-3: Changes in natural gas demand in APEC by sector, 2012-2021 (bcm)
300

Other

250

Non-energy

200

Agriculture

150

Transport
Building

100

Industry50
Own use0

USA

Russia-50

China

Other Apec

OtherTransformation
Power and Heat

-100
Note: Sectorial data for the year 2022 was not available at the time of writing.
Gas demand in the “power and heat” sector considers gas consumption for electricity generation, heat production in combined
heat and power cycles, as well as district cooling. Gas consumption for heating and cooling in residential and commercial buildings
is included in the “building” sector.
Source: CEDIGAZ, EGEDA

2-1-1

Gas demand in the United States

Over the past decade, the United States has remained the world's largest natural gas consumer, with its
demand increasing by 25%. Although demand in the economy was rapidly growing from 2017 to 2019,
the COVID-19 pandemic caused demand contraction in 2020 and it flattened demand in 2021. It was
not until 2022 that demand rebounded closer to pre-pandemic levels.
The power and heat sector accounted for the largest share of natural gas consumption in the UnitedStates in 2021 at 39%. However, the sector presented a 4% y-o-y decline in consumed volume due toincreasing natural gas prices throughout the year from the low 2020 levels. The upward trend in prices
hindered the competitiveness of natural gas even as electricity demand increased. The competitive costof coal and the rise in renewable generation were the primary substitutes for high-priced natural gas.
(IEA, 2021). Similarly, the industry sector responded to high natural gas prices by reducing its demand.
In 2021, the sector presented a 1.1% y-o-y decline in gas demand despite the rebound in economic
activities.
However, the resurgence of economic activities in the United States had a positive impact on natural
gas consumption in some sectors, particularly in those that have limited flexibility in fuels or feedstocks.
In 2021, natural gas consumption in the non-energy, transport, and building sectors increased by 67%,
11%, and 1.3%, respectively. The absolute demand increase in these three sectors was almost enoughto offset the demand contraction in the power and heat sector.

18

Figure 2.4: Natural gas demand in the United States by sector, 2012-2022 (bcm)
1 000

50%

900

45%

800

40%

700

35%

600

30%

500

25%

400

20%

300

15%

200

10%

100

5%

0

0%

Other
Non-energy
Agriculture
Transport
Building2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Industry
Own useOther
Transformation
Power and Heat
Gas share (rightaxis)

Note: Sectorial data for the year 2022 was not available at the time of writing.
Gas demand in the “power and heat” sector considers gas consumption for electricity generation, heat production in combined
heat and power cycles, as well as district cooling. Gas consumption for heating and cooling in residential and commercial buildings
is included in the “building” sector.
Source: CEDIGAZ, EGEDA

2-1-2

Gas demand in Russia

Russia has remained the world’s second-largest natural gas user for the past decade, accounting for
12% of worldwide consumption. The economy has access to the largest proven gas reserves in theworld, which results in natural gas consistently providing over 50% of its primary energy supply. The
varied consumption trends during the past decade reflect the impacts of economic downturns andrebounds.
In 2021, natural gas consumption showed a 15% y-o-y increase due to a long heating season and thegradual economic rebound after the initial shock of the COVID-19 pandemic (IEA, 2021). The power andheat sector dominated Russia’s natural gas consumption at 49%. With a 17% y-o-y growth, it
represented more than half of the absolute increase in natural gas consumption.
The buildings and industry sectors represent the next largest consumers in Russia. In 2021, each sector
accounted for 16% and 9% of total natural gas demand, respectively. These two sectors also greatly
benefited from the economic rebound in 2021, with 14% and 11% y-o-y growth, respectively.
Total gas consumption in 2022 declined from the 2021 level as sanctions resulting from the RussiaUkraine war negatively affected the economic activities in Russia.

19

Figure 2.5: Natural gas demand in Russia by sector, 2012-2022 (bcm)
600

60%

500

50%

Other
Non-energy
Agriculture

400

40%

300

30%

Transport
BuildingIndustry200

20%

Own use

100

10%

Other
Transformation
Power and Heat00%2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Gas share (rightaxis)

Note: Sectorial data for the year 2022 was not available at the time of writing.
Gas demand in the “power and heat” sector considers gas consumption for electricity generation, heat production in combined
heat and power cycles, as well as district cooling. Gas consumption for heating and cooling in residential and commercial buildings
is included in the “building” sector.
Source: CEDIGAZ, EGEDA

2-1-3

Gas demand in China

China is the third largest natural gas consumer in the world, currently accounting for 9% of global gas
consumption. The economy has presented a clear upward trend in its gas demand for the past decade,including during the COVID-19 pandemic. It was not until 2022 that the economy showed a decrease
in its demand levels due to high gas prices and slower GDP growth (S&P Global, 2022).
The industry sector accounts for 40% of natural gas consumption in China and has been the demand
driver in the economy for the past decade. In 2021, the sector showed a 7.8 % y-o-y increase in thenatural gas volume consumed. A strong rebound in economic activities at the beginning of the year andongoing coal-to-gas conversions supported the demand in this sector; however, higher LNG prices inthe second half of the year hampered demand growth in price-sensitive sections of the industry(IEA,2021).
The buildings sector, the second largest by share, also witnessed a notable surge in natural gas
consumption in 2021. This substantial 14% year-on-year growth was driven by a robust economic
rebound, long cooling and heating seasons, and a constrained domestic coal market due to low
stockpiles and surging coal demand in other sectors (IEA,2021).
The power and heat sector, the third largest demand share in the economy, had a steep increase innatural gas demand, with a 25% y-o-y growth reported in 2021. The surge in natural gas demand
resulted from long heating and cooling seasons during the winter and summer and low hydropower

20

availability. Additionally, the tight coal supply in 2021 further increased natural gas demand to meet
power and heat needs (IEA,2022).

Figure 2.6: Natural gas demand in China by sector, 2012-2022 (bcm)
450

10%

400

9%
8%

350

7%

300

6%

250

5%

200

4%

150

Other
Non-energy

Agriculture
Transport
BuildingIndustry
Own use

3%

100

2%

Other
Transformation
Power and Heat

50

1%

0

0%

Gas share (rightaxis)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Note: Sectorial data for the year 2022 was not available at the time of writing.
Gas demand in the “power and heat” sector considers gas consumption for electricity generation, heat production in combined
heat and power cycles, as well as district cooling. Gas consumption for heating and cooling in residential and commercial buildings
is included in the “building” sector.
Source: CEDIGAZ, EGEDA

2-1-4

Gas demand in Northeast Asia

The Northeast Asia economies (Hong Kong, China; Japan; Korea; and Chinese Taipei) depend almost
100% on LNG imports to meet their natural gas needs. Japan is the dominant consumer in the region
and was once the largest LNG importer in the world. Japan’s demand has been on a downward trend
for the past decade, opposite to the one observed in Korea, Chinese Taipei, and Hong Kong, China. The
opposing demand trends in the region have resulted in overall demand remaining somewhat flat forthe past decade.
The Northeast Asia region experienced a 4.8% year-on-year increase in natural gas consumption in
2021, attributed to the economic rebound witnessed in the region, notably in Korea and Chinese Taipei
in terms of volume. The demand growth in the region was driven primarily by the power and heat sector,
and additionally by increased industrial demand.
In the case of the power sector, Japan showed a major y-o-y decrease of 9.7% in gas usage in 2021
because of higher use of nuclear and renewable generation during the year. Korea and Chinese Taipei
reported substantial growth in natural gas use for power generation, offsetting Japan’s demand loss inthis sector. Hong Kong, China, reported a slight decrease in natural gas for power generation.

21

In the industry sector, all Northeast Asia economies displayed substantial growth in gas usage asactivities rebounded from the initial COVID-19 shock. With a y-o-y growth of 7% in 2021, Japan added
the largest absolute demand volume to the industry sector. Chinese Taipei experienced a 15% surge innatural gas demand in its industry sector.
In 2022, the overall gas demand for the Northeast Asia economies decreased as the region was hit withextremely high gas import prices as the Russia-Ukraine war caused the global gas market to tighten.

Figure 2.7: Natural gas demand in NEA by sector, 2012-2022 (bcm)
250

25%

Other
Non-energy

200

20%

Agriculture
Transport

150

15%

100

10%

BuildingIndustry
Own use

50

5%

Other
Transformation

Power and Heat00%2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Gas share (rightaxis)

Note: Sectorial data for the year 2022 was not available at the time of writing.
Gas demand in the “power and heat” sector considers gas consumption for electricity generation, heat production in combined
heat and power cycles, as well as district cooling. Gas consumption for heating and cooling in residential and commercial buildings
is included in the “building” sector.
Source: CEDIGAZ, EGEDA

2-1-5

Gas demand in Southeast Asia

The Southeast Asia economies (Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore,
Thailand, and Vietnam) displayed a mostly flat natural gas demand in the years since the start of thepandemic. In 2021, this region presented a y-o-y demand increase of 1% as its economic rebound was
met with a tight natural gas market. The high natural gas prices of 2021 forced exposed economies todecrease consumption and opt for cheaper alternatives like coal.
In Southeast Asia, the power and heat sector is the leading gas consuming sector. In 2021, this sector
presented a 3.5% y-o-y decrease as the LNG importer economies in the region were exposed tohistorically high prices on the spot market. The economies in the region implemented measures tocounteract the impact of high fuel prices on the electricity market through efficiency and fuel exchange
measures, which further suppressed natural gas demand.

22

The repercussions of the Russia-Ukraine war are anticipated to prolong the declining trend of natural
gas consumption in the region, as concerns about energy security and economic viability influenceshort- and long-term policy decisions.
In 2022, the Russia-Ukraine war led to increased volatility in gas prices and tightened global supplies,
which led to a decrease in natural gas consumption in Southeast Asia. Thailand, the largest gas
consumer in the region, primarily drove the demand contraction, facing pressure on gas consumption
due to declining domestic supply and high import prices.

Figure 2.8: Natural gas demand in SEA (Southeast Asia) by sector, 2012-2022 (bcm)
200

40%

180

35%

160
30%
140
25%

120

Other
Non-energy
Agriculture
Transport
Building

100

20%

80

15%

Own use10%

OtherTransformation

60
40
5%

20
0

Industry0%Power and Heat
Gas share (rightaxis)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Note: Sectorial data for the year 2022 was not available at the time of writing.
Gas demand in the “power and heat” sector considers gas consumption for electricity generation, heat production in combined
heat and power cycles, as well as district cooling. Gas consumption for heating and cooling in residential and commercial buildings
is included in the “building” sector.
Source: CEDIGAZ, EGEDA

2-2

Gas demand outlook

The Russia-Ukraine war, that began in 2022, profoundly impacted the global natural gas market. Afterthe EU (European Union) decided to limit Russia's pipeline gas imports, there was a higher demand for
LNG, causing increased tightness in the gas market, which raised energy security concerns worldwide.
The latest natural gas demand projection published by APERC (Asia Pacific Energy Research Centre) in
the 8th Outlook did not include analysis about the impact of the Russian-Ukraine war on the global
energy market, so this edition of the APERC Gas Report utilizes other energy organizations’ projections(CEDIGAZ, IEA, and BP) to assist with gas demand analysis.

23

Table 2-1: 2023 medium-term natural gas demand outlooks from different publishers.
Organization
CEDIGAZ

IEA

BP

Publication
2023 Medium- andLong-Term Gas &LNG Outlook

World Energy
Outlook 2023

BP Energy Outlook
2023

Scenarios
CEDIGAZ Scenario

Stated Policies Scenario(STEPS)
Announced Pledges
Scenario (APS)New Momentum
Scenario

Description
Projection based on theacceleration of energy
transition andsignificant energy
efficiency gains.
Projection based on
current policy settings.
Projection based on
announced pledges
which assumes GHG
emissions targets arereached in time.
Projection based on thecurrent trajectory of theenergy system. It places
weight on the recent
global ambition for
decarbonization.

The CEDIGAZ 2023 Medium-term Gas & LNG Outlook offers the most comprehensive projection for gas
production in the APEC region. It forecasts that by 2030, natural gas demand in the APEC region will
increase by 4.1% from the 2022 baseline, mainly driven by increasing gas demand in China, Chinese
Taipei, and Southeast Asia. China is projected to increase its demand by 30%, accounting for the majorityof gas demand growth. More substantial gas consumption growth in the region is mainly limited bydemand contractions in the United States and Japan. Also, according to CEDIGAZ, Russia’s demand is
projected to have a 2.8% increase by 2030.
IEA’s STEPS forecasts a major increase in China’s gas consumption, with 27% growth in 2030 compared
to 2022. This demand change alone would add 100 bcm in natural gas demand into the APEC region;
however, the forecasted demand contraction in the United States and Japan would offset part of thisvolume, as natural gas consumption is forecasted to contract by 4.6% in the United States and by 32%
in Japan. In contrast, Russia’s demand is projected to increase by 4.5% during the next decade.
IEA’s APS presents a highly optimistic trajectory for GHG emissions reductions in the current decade,resulting in demand contraction in most of the main markets in APEC. China’s demand is projected toincrease by 14% in 2030 compared to 2022. This growth, however, is more than offset by demand
contractions in the United States and Japan. U.S. demand is projected to contract by almost 20%, Japan’s
by a staggering 39%, and Russia’s by 2.3% during the next decade.
BP’s New Momentum Scenario reflects the trajectory of the global energy system, emphasizing theincrease in global ambition for decarbonization in recent years. According to this scenario, China's
demand is projected to grow by 33% in the next decade, while U.S. consumption is expected to contractby 12%. Additionally, Russia's demand is forecasted to increase by 1.7% over the next decade.

24

Figure 2-9: Natural gas demand outlook in APEC economies, 2022-2030 (bcm)
3000
2500
2000
1500
1000
500
0

2022

United States

2030 - CEDIGAZ
Outlook
RussiaChina

2030 - IEA Stated
Policies Scenario
Japan

Canada2030 - IEA
Announced Pledges
Scenario
MexicoKorea

2030 - BP New
Momentum
Scenario
Other APEC

Source: CEDIGAZ, IEA, BP

25

Section 3: Gas supply
3-1

World and APEC natural gas supply

Over the last decade, the APEC region has been the dominant natural gas producer in the world. In
2022, the region accounted for 58% of total natural gas production. The region produced 2,422 bcm in2022, representing a 30% increase over the volume produced in 2012. As a comparison, total world
natural gas production in 2022 was 4,451 bcm, a 21% increase over the 2012 value.
The accelerated growth in production in the region during the last decade was mainly driven by volumes
added by the United States, China, and Australia. The substantial production growth in the region was
mainly supported by the shale gas revolution in the United States, conventional and unconventional
gas in China, and conventional gas in Australia.
The producers in Southeast Asia (SEA) and others in the Americas had a diminishing role in natural gas
volumes extracted. In SEA, Indonesia’s and Thailand’s production decreased by 26% and 33%,
respectively, compared to the 2012 levels. In the Americas, Mexico had a gas production contraction of
44% during the same period.
Natural gas production in the region in 2022 showed a y-o-y decrease of 0.7%, primarily due to adecrease in Russian production as OECD Europe sought other sources. The contraction in Russia's gas
production of 11.8%, or 84 bcm in 2022, was mostly offset by the United States, China, Canada, Australia,
and Malaysia's gas production growth.

Figure 3-1: Natural gas production in APEC, 2012-2022 (bcm)
4500

100%

4000

90%

Non-APEC
Production

Other

80%

3500

70%

3000

SEA

60%

Australia

50%

Canada

40%

China

2500
2000
1500

30%

1000

20%

500

10%

0

0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

RussiaUnited States
APEC
Production
share

Note: The figure shows marketed volumes.
Source: CEDIGAZ

26

3-1-1

Gas supply in the United States

In 2022, the United States continues to be the largest natural gas producer in the region by a large
margin. The gross gas production totalled 1264 bcm in 2022, an increase of 4% compared to theprevious year.
Over the last decade, shale gas has been the main driver of U.S. gas production. Shale gas currently
accounts for 74% of natural gas production in the United States compared to 42% in 2012. The Marcellus
formation beneath the Appalachian Basin in eastern United States produced 303 bcm of dry gas in 2022,
accounting for 32% of total shale gas production. The Permian basin, located in West Texas andSoutheast New Mexico, accounted for the second largest shale gas production at 176 bcm, equivalent
to 14% of total shale gas production.
The substantial increase in shale gas production coincides with declines in production from othersources of natural gas, a trend that has continued over the past decade. In 2022, the only other sourcethat presented positive y-o-y growth besides shale gas was conventional associated gas, which resulted
from increased oil production (EIA, 2023b).

Figure 3-2: Gross natural gas production in the United States, 2012-2022 (bcm)
1400

1200
Rest of USA-shale

1000

Eagle Ford

Haynesville
Utica

800

Permian

600
Marcellus

400

200

0
2012

2013

Coalbed

2014

2015

2016

2017

Conventional-non associated

2018

2019

2020

Conventional-associated

2021

2022

Shale

Source: U.S. Energy Information Administration (EIA)27

3-1-2

Gas supply in Russia

In 2022, Russia’s gross natural gas production shrank to 672 bcm, marking a 11.8% decline comparedto the previous year. This contraction followed a production recovery observed in 2021 after the initial
impact of COVID-19.
The decrease in production in 2022 was a consequence of the abrupt reduction in pipeline exports to
Europe in the wake of the Russia-Ukraine war. Russia is currently struggling to access new markets asthat requires significant political wrangling and infrastructure development (Japan Times, 2023).
Russian domestic natural gas production comes from conventional sources, with non-associated gas
comprising most of the volume produced. Currently, non-associated gas accounts for 85% of total
production; however, associated gas share has steadily grown for the past decade as the ratio of
associated gas produced in oil wells increases in the Eastern Siberia and Far East fields.

Figure 3-3: Gross natural gas production in Russia, 2012-2022 (bcm)
900
800
700
600
500
400
300
200
100
0
2012

2013

2014

2015

2016

2017

Conventional-non associated

2018

2019

2020

2021

2022

Conventional-associatedSource: ROSSTAT

3-1-3

Gas supply in Canada

Canada's gas production reached 177 bcm in 2022, following a 7% y-o-y growth, mostly driven by tightgas production in the Alberta and British Columbia provinces.
Canada’s current gas production portfolio mostly consists of tight gas formations in the Western
Canadian Sedimentary Basin, covering the provinces of Alberta, British Columbia, and Saskatchewan.
Over the last decade, the share of tight gas production has grown considerably from 43% in 2012 to
68% in 2022.
The increase in tight gas production helps offset declines in conventional-non-associated production
from Alberta and British Columbia, which dropped by 64% between 2012 and 2022. The increase of 62%28

in conventional-associated production during the same period has also contributed to the stability ofCanada's total gas production. Also, shale gas and coalbed gas production remain low, accounting for6.5% of total production in 2022.

Figure 3-4: Natural gas production in Canada, 2012-2022 (bcm)
200
180
160
British Columbia

140
120
100

Alberta

80

British Columbia

60

Alberta

40
20
0
2012

2013

Coalbed

2014

Shale

2015

2016

2017

Conventional-associated

2018

2019

2020

Conventional-non associated

2021

2022

Tight

Note: Shale gas refers to natural gas found in a type of sedimentary rock formed of very fine-grained particles, such as clay, thathave been compacted to form a layered rock. Tight gas refers to natural gas found in low permeability reservoir rocks (DMP,2023).
Source: Canada Energy Regulator, Canada’s Energy Future 2023

3-1-4

Gas supply in China

In 2022, natural gas production in China reached 212 bcm after a y-o-y growth rate of 6.3%, with mostof the growth coming from conventional and tight gas. China’s production portfolio mostly comprisesof conventional and tight resources, accounting for 58% and 24% of total production in 2022.
Tight gas in China has cemented its place as the second most important gas source with its production
increasing by 78% during the last decade. China’s government is pushing for further development of
unconventional sources to diminish its reliance on natural gas imports. In addition, China’s national oil
companies (CNPC, Sinopec, and CNOOC) are considering tight gas, shale gas, and coalbed methane as
key components of their long-term strategies (Rigzone, 2023).
Since China commenced shale gas production in 2012, it has undergone significant growth, representing
11% of total production in 2022. Despite this growth, in 2022, shale gas production totalled 24 bcm,
which was below the government's 2020 target of 30 bcm per year. To reduce costs and stimulate
development in China's shale reservoirs, stakeholders must provide adequate fiscal and regulatory
support and enhance domestic capabilities to address complex geology and ground-level challenges(Wood Mackenzie, 2021).

29

Figure 3-5: Natural gas production in China, 2012-2022 (bcm)
250

200

150

100

50

0
2012

2013

2014

2015

2016

Conventional

2017

Tight

2018

2019

Coalbed

Shale

2020

2021

2022

Note: Shale gas refers to natural gas found in a type of sedimentary rock formed of very fine-grained particles, such as clay, thathave been compacted to form a layered rock. Tight gas refers to natural gas found in low permeability reservoir rocks (DMP,2023).
Source: S&P Global Commodity Insights, National Bureau of Statistics of China, China National Development and Reform
Commission

3-1-5

Gas supply in Australia

Australia's natural gas production increased marginally by 1.2%, reaching 156 bcm in 2022. This
production originates from conventional and coalbed sources, mostly originating from conventionalsources in Western Australia. Natural gas production in the economy is driven by LNG exports, withliquefaction capacity and gas output experiencing substantial growth since 2015 (EIA, 2022).
Conventional gas production in Western Australia accounted for 61% of the total production in 2021,
while Victoria and other regions contributed another 14%. The overall production of conventional
natural gas almost doubled since 2015, driven by a growth in LNG exports, mainly to Asian markets.
Coalbed gas production from the Queensland region accounted for 25% of Australia's gas production
in 2021. Following the same line as conventional production, the volumes of coalbed gas have doubled
since 2015, coinciding with the commissioning of the first coalbed gas-to-LNG export terminals in
Queensland (EIA, 2022).

30

Figure 3-6: Natural gas production in Australia, 2012-2021 (bcm)
180
160
140
120

Western Australia

100
80
60

Victoria

40

Other

20

Queensland

0
2011

2012

2013

2014

2015

Coalbed

2016

2017

2018

2019

2020

2021

Conventional

Note: Data for 2022 was not available at the moment of writing.
Source: Department of Climate Change, Energy, the Environment and Water, Australian Energy Statistics.

3-1-6

Gas supply in Southeast Asia

Southeast Asia natural gas production has been on a decline trend for the past decade, which was
exacerbated by the COVID-19 crisis. The pandemic caused a marked decrease in gas consumption in
the region in 2020, signalling producers in the region to ramp down production. As of yet, only Malaysia
has recovered and surpassed pre-pandemic production levels. Gas production in the region contracted
by 1.7% in 2022, mostly from production decreases in Indonesia and Thailand, the region's second andthird-largest gas producers, respectively.
Indonesia showed a 26% decline in gas production between 2012 and 2022 and was overtaken by
Malaysia as the largest producer in the region. The production contraction was partly due to policies
and regulations that limit private sector participation. Additionally, the lack of new discoveries forced
operators to continue exploiting mature fields.
Thailand, the third largest gas producer in Southeast Asia, experienced a peak in its total gas production
in 2014 at 42 bcm. However, the decline in output from Thailand’s largest gas condensate field, theErawan asset, substantially influenced the overall production trend from 2014 onwards. As a result,
Thailand is expanding its dependence on pipeline gas from Myanmar and LNG imports to meet its
demand (CASE, 2023).
Malaysia registered a 15% increase in natural gas production over the last decade. Production in thiseconomy is primarily influenced by the demand from the power and industry sectors, with domestic
demand growth mostly observed in the industry sector. The increase in production was bolstered byprojects that came online between 2017 and 2020, such as NC8 and Kanowit fields offshore Sarawak
state and Telok, Bertam, and Damar fields off the coast of Peninsular Malaysia.

31

Figure 3-7: Natural gas production in Southeast Asia, 2012-2022 (bcm)
250

200

150

100

50

0
2012

2013

2014

Brunei Darussalam

2015

Indonesia

2016

2017

Malaysia

2018

2019

The Philippines

2020

Thailand

2021

2022

Viet Nam

Source: CEDIGAZ

32

3-2

Gas production outlook

The Russia-Ukraine war, that began in 2022, profoundly impacted the global natural gas market. Afterthe EU (European Union) decided to limit Russia's pipeline gas imports, there was a higher demand for
LNG, causing increased tightness in the gas market, which raised energy security concerns worldwide.
The latest natural gas production projection published by APERC (Asia Pacific Energy Research Centre)
in the 8th Outlook did not include analysis about the impact of the Russian-Ukraine war on the global
energy market, so this edition of the APERC Gas Report utilizes other energy organizations’ projections(CEDIGAZ and BP) to assist with gas production analysis.

Table 3-1: 2023 medium-term natural gas production outlooks from different publishers.
Organization
CEDIGAZ

Publication
2023 Medium- andLong-Term Gas &LNG Outlook

Scenarios
CEDIGAZ Scenario

BP

BP Energy Outlook
2023

New Momentum
Scenario

Description
Projection based on theacceleration of energy
transition andsignificant energy
efficiency gains.
Projection based on thecurrent trajectory of theenergy system. It places
weight on the recent
global ambition for
decarbonization.

Natural gas production outlooks in the medium term indicate that regional production will increaseduring the current decade driven by the United States and, to a lesser degree, China. The extent of theincrease and the production levels forecast for each economy vary from model to model.
The CEDIGAZ 2023 Medium-term Gas & LNG Outlook offers the most comprehensive projection for gas
production in the APEC region. It forecasts that 2030 natural gas production in the APEC region willroughly be 2463 bcm, a 2% increase from the 2022 baseline. The low increase in production is expected
to result from production contraction in several APEC economies offsetting the gas production growthin the United States. CEDIGAZ forecasts that a widespread decrease in production in Southeast Asia
economies and in Russia will limit overall production growth in the APEC region.
CEDIGAZ forecasts that gas production in the United States is set to reach 1,116 bcm in 2030, a 10%
increase from the 2022 volumes. Economies like China, Papua New Guinea (PNG), and Mexico are also
expected to increase gas production in the current decade, albeit to a lesser extent. China is forecasted
to increase its gas production by 3.2% in 2030, compared to 2022 levels. PNG and Mexico are forecasted
to make substantial gains in production levels during the current decade increasing their gas production
by 57 and 17%, respectively.
The BP Energy Outlook 2030 forecasts a different production growth rate for the largest economies in
the region. BP anticipates that growth during this decade will be mostly driven by China increasing its
production by 19% in 2030 compared to 2022. As for production in the United States, BP expects thegrowth to be marginal at 1% over the same period. On the other hand, gas production in Russia is
expected to contract by 1.7% in 2030.

33

Figure 3-8: Natural gas production outlook in APEC economies, 2022-2030 (bcm)
3000
2500
2000
1500

1000
500
0
2022 - CEDIGAZ

United States

Russia2030 - CEDIGAZ Outlook

China

CanadaAustralia

2030 - bp New Momentum Scenario

Malaysia

Indonesia

Other APEC

Source: CEDIGAZ, BP

34

Section 4: Gas trade4-1

World and APEC natural gas trade

Global natural gas trade amounted to 1305 bcm in 2022 – an increase of 0.4% from the previous year.
The marginal growth in the natural gas trade was due to high prices and tight supplies throughout theyear originating from the Russia-Ukraine war and the resulting reorganization of the European natural
gas supply.
Total natural gas trade involving APEC member economies shrank by 7.7% in 2022 due to the substantial
decline in Russian pipeline exports flowing into Europe. The decrease in Russian exports resulted in a
17% decline in APEC pipeline trade in 2022. In the same year, APEC LNG trade increased by 4% asAmerican LNG’s share in the European supply portfolio increased.
The gap left by Russian gas in the European market caused trade activities involving other economies
outside the APEC region to increase in 2022. Non-APEC pipeline trade presented an 18% y-o-y growthin 2022, mainly due to increased activity in Belgian and British pipelines. In the same year, non-APEC
LNG trade increased by 7.1%, driven mainly by increased European LNG imports from non-APEC
economies like Norway and Qatar.

Figure 4-1: Natural gas trade, 2012-2022 (bcm)
1400
1200
1000
800
600
400
200
0
2012

2013

2014

2015

non-APEC (pipeline)

2016

2017

non-APEC (LNG)

2018

2019

APEC (pipeline)

2020

2021

2022

APEC (LNG)

Note: The figure shows the gross amount of gas exported and imported.
Source: CEDIGAZ

Even though the APEC region presented less trading activity in 2022, it remained a net natural gas
exporter. Total export volumes from economies in the APEC region amounted to 633 bcm in 2022 – adecrease of 7.6% compared to 2021. The decrease in exports originated in the abrupt decline of Russian
natural gas exports flowing into Europe; and pipeline exports in the APEC region contracted by 19% asa result. On the other hand, LNG exports in the APEC region increased by 6.7% in 2022, mainly driven
by increased American LNG cargoes going to Europe.

35

Natural gas imports in the APEC region amounted to 557 bcm in 2022 – a 3.1% decrease compared tothe previous year. While pipeline imports remained flat in the APEC region, LNG imports fell by 5.9% in
2022. The reduction in LNG imports was driven by lower natural gas demand coupled with higher
domestic production in China.

Figure 4-2: APEC natural gas exports and imports, 2012-2022 (bcm)
800
600
400
200

0
-200
-400
-600
-800
2012

2013

2014

Exports (pipeline)

2015

2016

Exports (LNG)

2017

2018

2019

Imports (pipeline)

2020

2021

2022

Imports (LNG)

Source: CEDIGAZ

4-2

Gas imports in the APEC region

Natural gas imports in the APEC region increased by 32% between 2012 and 2022. The growth was
mainly driven by China and Mexico, with Korea, Chinese Taipei, and Thailand also adding substantial
import volumes into the region. The rising natural gas imports in China during the last decade are theresult of rapid economic growth and decarbonization strategies. In the case of Mexico, the decline indomestic production levels and growing demand in the power and industry sectors resulted in an
increase in natural gas imports.
Northeast Asian economies like Korea and Chinese Taipei, without access to domestic natural gas
reserves and growing demand driven by the power, building, and industry sectors, became increasingly
reliant on natural gas imports during the last decade. In Southeast Asia, Thailand showed a continuous
increase in natural gas imports in the face of dwindling domestic gas production during the last decade,even amid the contraction in natural gas consumption in 2022 that this economy experimented.
The year 2022 was marked by a tight natural gas market, with prices reaching record levels because of
the Russia-Ukraine war and the resulting reorganization of the global LNG market. Imports in the APEC
region presented a 3.1% y-o-y decline, mainly driven by imports and consumption contraction in China.

36

Mild weather, slowing economic growth, COVID-19 disruptions, and price-driven demand destructionin China resulted in a significant 9.9% y-o-y contraction in gas imports in the economy.
On the other hand, the United States saw the most significant increase in import volumes, with a 7.7 yo-y increase in 2022. The increase was the result of rising consumption in the power and building
sectors, especially for heating during the winter months. Growth was also observed in Southeast Asia,
to a lesser extent in absolute terms, with Thailand, Malaysia, and Indonesia presenting double-digit yo-y increases in their annual imports.

Figure 4-3: Total natural gas imports by APEC economy, 2012-2022 (bcm)
700

600

Other APEC

500

Chinese Taipei
Canada400

Korea
Mexico300

United States
Japan

200

China
100

0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: CEDIGAZ

4-2-1 LNG imports in the APEC region
LNG imports in the APEC region have increased by 36% between 2012 and 2022. Most of the growth in
the region was driven by China, with South Korea, Chinese Taipei, and Thailand also experiencing
significant growth during the past decade. During the same period, Japan displayed the most significant
drop in LNG imports in the region, with an 18% decrease. The reduction in Japanese LNG imports reflects
higher solar and nuclear power generation coupled with energy efficiency gains that reduced natural
gas demand in the economy.
In 2022, LNG imports in the APEC region presented a 5.9% y-o-y decline resulting from a major
contraction in China’s LNG imports, offsetting the modest absolute growth observed in other economies.
China presented a 19.6% y-o-y decrease, resulting from lower natural gas demand and increased
domestic gas production. The contraction in Chinese LNG imports in 2022 meant that Japan regained
its status as the largest LNG importer in the world, even amid the downward trend in gas consumption
observed in this economy.

37

While markets like Korea and Chinese Taipei presented modest growth in 2022 in the face of high prices
and tight supplies, Thailand and Malaysia experienced the region's most significant LNG import y-o-ypercentual increases.
In 2022, Thailand, the largest natural gas consumer and importer in Southeast Asia, experienced a 21%
year-on-year growth in LNG imports to meet its expanding demand. Meanwhile, Malaysia, a net
exporter in the region, witnessed a 61% increase in its LNG imports during the same period. Both ofthese economies primarily sourced their LNG from Australia.
Malaysia’s two-way LNG trade is caused by the geographical disconnection between gas production
regions in Borneo and gas consuming regions in Peninsular Malaysia. The latter have been historicallysupplied by neighboring maturing fields whereas Borneo’s production was underpinned by long term
SPAs. As gas production in mature fields is no longer enough to meet demand in the peninsula, Malaysia
was forced to source LNG from Australia.

Figure 4-4: LNG imports by APEC economy, 2011-2021 (bcm)
350
300
250

Other APEC
Thailand200

Chinese Taipei
Korea

150

China
100

Japan

50

0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: CEDIGAZ

4-2-2

Pipeline gas imports in the APEC region

Pipeline natural gas imports in the APEC region have increased by 27.5% between 2012 and 2022, with
China and Mexico driving most of this growth. Pipeline import increases in China were the result ofaccelerated economic growth paired with decarbonization efforts. In Mexico, energy consumption
growth coupled with declining domestic production resulted in a substantial increase in gas imports
from the United States.
In 2022, gas pipeline imports in the region showed a 0.3% y-o-y growth. These flat pipeline imports
were the result of widespread contractions in the region, offsetting the growth observed in the UnitedStates and China. The United States presented a 7.7% y-o-y increase in Canadian pipeline imports tobalance increased domestic demand, especially during the winter months (EIA,2023). China displayed a
7.5% y-o-y increase in pipeline imports as the economy favored pipeline natural gas over LNG imports

38

amid the high prices observed throughout 2022. The increase in Chinese gas pipeline impots was driven
by larger imports from Russia and Turkmenistan.
Among the economies that decreased their pipeline imports in 2022, Russia, Australia, and Mexico had
the most significant drops. Russia had a 37% y-o-y decrease in pipeline imports as overall consumption
decreased in the economy; imports flowing from Kazakhstan were cut by more than half. Australia
decreased its pipeline imports by 52.5% as production in Timor-Leste declined sharply in 2022. In thecase of Mexico, the decrease in pipeline natural gas imports was the result of high prices, prioritizationof the American market during winter, and a slight increase in domestic production.

Figure 4-5: Pipeline imports by APEC economy, 2012-2022 (bcm)
300

250

200

Other APEC
Singapore

150

CanadaMexico100

China
United States

50

0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: CEDIGAZ

4-3

Gas exports in the APEC region

Natural gas exports in the APEC region increased by 43% between 2012 and 2022. Most of the growth
was driven by the United States and Australia. During the same period, Russia and Indonesia showed
the largest drop in exports in the region. Russia’s decrease in exports was a consequence of the abrupt
reduction in European gas imports in the wake of the Russia-Ukraine war. In contrast, Indonesia’s
decrease can be attributed to the gradual decline in gas production over the last decade.
In 2022, overall exports in the APEC region displayed a 7.6% y-o-y decrease, mainly driven by much
lower exports from Russia into Europe. Russia’s annual exports dropped by a dramatic 30% as the
economy was no longer able to send gas volumes to its previous customers in Europe and it lacked theinfrastructure to easily redirect its gas volumes. Indonesia and Brunei Darussalam also presented
contractions in their exports by (negative) 5.1% and 15%, respectively. Brunei Darussalam’s contraction
in exports was due to a reduction in gas production caused by unscheduled maintenance andrejuvenation activities in existing wells.

39

The United States, Canada, and Malaysia saw their export volumes increase in 2022 by 6.4%, 7.7% and14.3%, respectively. The United States expanded its role in the European gas market with a substantial
increase in LNG exports as Europe looked for alternative suppliers to fill the gap left by Russian pipeline
gas. These U.S. exports mainly went to France, Spain, the Netherlands, and the United Kingdom. The
growth in Canadian exports was the result of high demand in the United States bolstered by the heating
and cooling seasons. Malaysia’s growth was mainly driven by increased exports to Japan, Korea, andThailand.

Figure 4-6: Natural gas exports by APEC economy, 2012-2022 (bcm)
800
700
600
Other APEC
500

Indonesia
Malaysia

400

CanadaAustralia

300

United States
Russia

200
100

0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: CEDIGAZ

4-3-1

LNG exports in the APEC region

LNG exports in the APEC region almost tripled between 2012 and 2022. The United States, Australia,
and Russia drove most of the growth, with Papua New Guinea also adding substantial LNG export
volumes since 2014. Malaysia continued to be a main player in the region with its LNG exports growing
16% since 2012. In the same decade, Indonesia experienced a 37% decrease in its outbound LNG
volumes due to declining domestic production and falling upstream investment.
In 2022, LNG exports in the region saw a 6.7% y-o-y increase, driven mainly by the United States andMalaysia increasing their annual exports by 14% and 13%, respectively. As aforementioned, European
markets scrambling to lessen dependence on Russian gas drove the expansion in U.S. exports. Also in
2022, France saw an almost four-fold increase in American imports, making it the largest buyer of U.S.
LNG.
Malaysian LNG export growth in 2022 was driven by increased cargoes entering Japan (its largest buyer),
Korea, and Thailand. These three economies saw double-digit y-o-y growth in Malaysian LNG imports40

as they tried to offset lower LNG import volumes from the United States and Qatar. To a lesser extent,
Indonesia also experienced LNG export growth to its Asian buyers, with Korea and Japan mainly driving
the 4.7% y-o-y increase.
Australia, the largest LNG exporter in the region, reported flat LNG exports in 2022. This was the resultof a 30% drop in LNG volumes sold to China, offset by increases (y-o-y) in volumes exported to other
Asian markets such as Japan (15%), Korea (23%), Chinese Taipei (21%), and Thailand (73%), mainly. The
growth in Australian LNG imports in these economies was also mainly due to reduced imports ofAmerican and Qatari gas.
Despite restrictions imposed on Russian fossil fuels, LNG exports from this economy presented a 4% yo-y increase in 2022. Most of the increase came from exports going into China, which increased by 43%
compared to the previous year. Imports going into Europe also saw a slight increase compared to theprevious year. Increases in Russian LNG imports in Belgium, France, and Spain more than offset the
sharp decline in LNG imports going into the United Kingdom. Out of the 41.1 bcm of LNG that Russia
exported in 2022, 18 bcm, or 43%, were exported to the European Union.

Figure 4-7: LNG exports by APEC economy, 2012-2022 (bcm)
350

300

250

Other APEC
Papua New Guinea

200

Indonesia
Malaysia

150

RussiaUnited States

100

Australia

50

0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: CEDIGAZ

41

4-3-2

Pipeline gas exports in the APEC region

Pipeline natural gas exports in the APEC region decreased by 6.5% between 2012 and 2022. The COVID19 pandemic and, especially, Russia’s abrupt decrease in pipeline exports going to Europe put an end
to the upward trend observed during the previous years. Indonesia’s decrease in exports, resulting fromthe fall in domestic gas production, also contributed to the decline in pipeline exports in the region in
the last decade. In an opposing trend, U.S. pipeline exports increase by 90% during the last decade,primarily due to Mexico’s growing reliance on American natural gas.
In 2022, natural gas pipeline exports in the APEC region decreased by 19%, driven by the sharp decline
in Russian pipeline exports flowing into Europe. Russian pipeline exports saw a 37% y-o-y decrease in
2022, mainly driven by the interruption of the Nord Stream operations. To a much lesser extent in
absolute numbers, the United States and Indonesia also saw a contraction in their pipeline exports in
2022: U.S. pipeline exports declined by 1.7% as Mexican gas demand contracted, and Indonesia’s
pipeline exports contracted by 21% y-o-y, in line with the downward trend of its domestic production.
Conversely, Canada showed an increase in its natural gas pipeline exports to the United States. Canadiangas exports had a 7.7% y-o-y growth in 2022, driven by heating and cooling seasons in the United States.
Malaysia saw a 31% y-o-y growth in its pipeline exports in 2022, driven by an increase in exports going
into Singapore.

Figure 4-8: Pipeline exports by APEC economy, 2012-2022 (bcm)
450
400
350
300

Other APEC
Malaysia

250

Indonesia
200

CanadaUnited States

150

Russia

100
50
0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: CEDIGAZ

42

4-4

Gas trade outlook in the APEC region

4-4-1

Net gas imports outlook in the APEC region

The Russia-Ukraine war, that began in 2022, profoundly impacted the global natural gas market. Afterthe EU (European Union) decided to limit Russia's pipeline gas imports, there was a higher demand for
LNG, causing increased tightness in the gas market, which raised energy security concerns worldwide.
The latest natural gas demand projection published by APERC (Asia Pacific Energy Research Centre) in
the 8th Outlook did not include analysis about the impact of the Russian-Ukraine war on the global
energy market, so this edition of the APERC Gas Report utilizes CEDIGAZ’s projections to assist with gas
trade analysis. The scenario analysis presented by CEDIGAZ bases its projections on the acceleration of
the energy transition and significant energy efficiency improvements in the coming years.
CEDIGAZ’s 2023 Medium-Term Outlook indicates that net imports in APEC economies will grow 29% by2030 compared to 2022. Net exports in APEC economies will grow 15% during the same period. Even
though net import growth is expected to outpace export growth in APEC, the region will remain a net
natural gas exporter, mainly driven by U.S., Russian, Australian, and Canadian exports.
CEDIGAZ expects China, Chinese Taipei, Thailand, and Viet Nam to drive most of the growth in net
imports within APEC during the current decade. China’s net imports are expected to grow 70% by 2030
compared to 2022; in absolute terms, China is forecasted to add 102 bcm of net imported natural gas
by the end of this decade. In comparison, Chinese Taipei, Thailand, and Viet Nam are expected to add
10, 9, and 9 bcm of net natural gas imports, respectively.
China’s substantial regasification capacity expansion will enable the increase in LNG imports during thisdecade. The current annual regasification capacity in China stands at 161 bcm, and there is currently
155 bcm of annual capacity under construction expected to come online before the end of 2026. Amongthe largest projects under construction, phase 3 of the Tianjian PipeChina LNG regasification terminal
and the Sinopec Longkou LNG regasification terminal will add 17 bcm of regasification capacity by theend of 2025 (EIA, 2023).
Other economies in Asia are also increasing their regasification capacity. Chinese Taipei’s two LNG
regasification terminals, Taichung and Yung-an, have announced expansion projects to meet growing
demand. Yung-an expansion is currently under construction, and it is expected to be finished by 2027.
There are also plans to build a new LNG regasification terminal in Taoyuan by 2025 (CPC, 2023) (JFE,2023).
Thailand’s recent regasification capacity additions confirm its interest in increasing LNG imports in the
coming years. The Map ta Phut 2 LNG regasification terminal and the Nong Fab LNG regasification
terminal added 15 Mtpa of regasification capacity in 2022 (S&P, 2022). Before these additions,regasification capacity in Thailand stood at 11.5 Mtpa (CEDIGAZ, 2023).
The largest regasification terminal in Viet Nam, Thai Vai LNG, started operations in the last quarter of2023 with a designed capacity of 1 Mtpa. The terminal was created to help ensure gas supply amid
falling domestic resources and soaring gas demand for power generation. LNG imports into theeconomy will aim to displace coal-fired generation to achieve the commitment of net zero emissions
by 2050 (Vietnamplus, 2023). 8.1 Mtpa of additional regasification capacity is currently underconstruction in Viet Nam.

43

Despite the overall increase in net import volumes in the region, economies like Japan and Mexico are
expected to reduce their natural gas imports by 2030 compared to 2022. With the most significant
forecasted decrease, Japan is expected to reduce its net natural gas imports by 16%. Japan’s demand
for natural ga is expected to decrease due to rising generation from nuclear and renewables, GHG
emissions targets, and demographic shifts. Mexico’s net natural gas imports are expected to present a
0.91% contraction in the same period. Mexico’s net imports in the mid-term are expected to contractslightly as domestic gas production is expected to increase.

Figure 4-9: Net imports outlook in the APEC region, 2022-2030 (bcm)
700
600
500
400
300
200
100
0

2022

2030

China

Japan

MexicoKorea

Chinese Taipei

Thailand

Other net importers

Source: CEDIGAZ 2023 Medium-Term Outlook

4-4-1

Net gas exports outlook in the APEC region

Regarding exports, CEDIGAZ considers that Russian pipeline gas exports into Europe will never returnto
the pre-Russia-Ukraine war levels, resulting in decreased Russian net exports that will not recover thisdecade. Russia is trying to reroute the destination of a significant share of its pipeline gas exports to
China. The planned Power of Siberia-2 pipeline aims to supply China with gas from the north-eastern
Yamal peninsula, which historically served the European market. Gazprom, the pipeline operator,
expects to start delivering gas to China by 2030; however, the two economies have yet to reach an
agreement on key issues, including pricing (Reuters, 2024).
In addition to shifting pipeline exports to Asia, Russia is gradually increasing its liquefaction capacity todiversify its importers. As of early 2024, none of its traditional importers (the EU, Japan, and Korea) havesanctioned existing Russian LNG contracts. Furthermore, the European Council indicated in December
2023 that new regulations on natural gas would contain provisions to allow member states to restrict
new Russian gas contracts. Despite this, Russia is currently building 44.7 bcm of yearly gas liquefaction
capacity, with 27 bcm coming from the Arctic LNG 2 project expected to be online in 2024 (CGEP, 2024).

44

The United States is positioned to overtake Russia as the largest net gas exporter in the world and will
drive net gas export growth in the APEC region. U.S. net exports are expected to grow by 155% between
2022 and 2030, reaching 265 bcm at the end of this decade. Most of U.S. gas export growth is expected
to come from LNG, driven by additional liquefaction capacity under construction: Golden Pass LNG (18Mtpa), Corpus Christi LNG III (11.4 Mtpa), and Plaquemines LNG (21.4 Mtpa), which are scheduled to
begin operation by 2025. Additionally, two projects under construction, Port Arthur LNG (11 Mtpa) and
Rio Grande LNG (31,5 Mtpa), will substantially increase liquefaction capacity by 2027 (CEDIGAZ, 2023).

Figure 4-10: Net exports outlook and in the APEC region, 2022-2030 (bcm)
700
600
500
400
300
200
100
0
2022

2030

RussiaUnited States

Australia

CanadaMalaysia

Indonesia

Other net exporters
Source: CEDIGAZ 2023 Medium-Term Outlook

The United States, in late January 2024, announced that it is temporarily pausing determinations on
pending applications of LNG exports to non-FTA (Free Tade Agreement) countries until it can update
the economic and environmental analyses used to determine whether additional LNG export
authorization requests to non-FTA countries are in the public interest. Existing authorizations for LNG
exports and projects that are already under construction will remain unaffected.
Presently, the United States has 14 FTAs, of which include seven APEC members: Australia, Canada, Chile,
Mexico, Peru, Singapore, and Korea. As such, LNG exports to these countries will remain unaffected.
While U.S. LNG exports have shifted to Europe since Russia’s invasion of Ukraine (over 60% percent
versus a previous 15%), several APEC economies continue to be key consumers of U.S. LNG. Prior to
Russia’s invasion of Ukraine, Korea, Japan, and China were the top three importers of U.S. LNG at 34%
of total U.S. LNG exports. Neither Japan nor China have FTAs with the United States, so while theircurrent LNG supply from the United States will not be impacted by this new policy, future U.S. LNG
projects that were investing based on Japanese and Chinese consumption habits will now be under
additional review. It is worth noting that the United States currently has 0.4 bcm/day of export capacity
already online, 0.3 bcm/day under construction, and 1.4 bcm/day of already authorized exports to nonFTA countries.

45

Section 5: Gas prices
5-1

Gas prices in 2022

Monthly natural gas spot prices in Asia and Europe eased in the first two months of 2022 before surging
in the following month due to the start of the Russia-Ukraine war on February 24. In March, Europe’s
concerns over the potential disruption of natural gas supply led to monthly natural gas spot prices, both
TTF and NBP, reaching the highest historical level (at the time) at 40.83 and 39.31 USD/MMBtu,
respectively. Asia's LNG spot market was also affected by the Russia-Ukraine war, as LNG competitionon the spot market drove JKM to reach a new record high at 35.44 USD/MMBtu in the same month.
While natural gas spot prices remained moderate through Spring 2022, as Russian gas was still flowing
to European customers, prices rebounded in June and surged to a new highest historical level in August2022. In addition to the Russian-Ukraine war impact on the gas market, the disruption of gas supply
from Norway and Algeria, storage refilling for the upcoming winter, and the announcement of
discontinued natural gas supply from Nord Stream 1 and 2 triggered the TTF monthly natural gas spot
price to reach a new record high at 70.71 USD/MMBtu.
In August 2022, the extremely tight supply and high natural gas prices in Europe, coupled with theincreased demand for winter preparation in Northeast Asia, drove other hubs' monthly spot prices to a
new high historically, with NBP recorded at 53.33 USD/MMBtu and JKM at 53.95 USD/MMBtu. The
United States also experienced higher gas spot prices as LNG export volumes increased competition
between the export and domestic natural gas markets. Consequently, Henry Hub's natural gas monthly
spot price increased steadily and reached 8.81 USD/MMBtu in August.
In September 2022, global natural gas monthly spot prices started to decline as competition for supplies
and regasification capacity was moderately relieved with the commissioning of the EemsEnergy LNG
terminal in the Netherlands and the resumption of the Prelude LNG plant operation in Australia. At thesame time, lower demand from the industrial and power sectors due to high gas prices and theincreased gas storage level in Europe also eased the global gas supply tightness.

Figure 5-1: Monthly natural gas spot prices, January 2015-January 2024 (USD/MMBtu)
80

JKM
TTF
NBP
Henry Hub

70
60
50
40
30
20
10
0
2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Source: Investing.com; EIA

46

5-2

Gas prices in 2023

Natural gas monthly spot prices in Asia and Europe were volatile in 2023 but remained well under theprevious year's prices at under 20 USD/MMBtu throughout the year. The JKM benchmark had an
average monthly price of 13.68 USD/MMBtu; in Europe, the TTF and NBP had an average monthly priceof 12.72 USD/MMBtu and 12.39 USD/MMBtu, respectively.
At the beginning of 2023, natural gas monthly spot prices in Northeast Asia and Europe continued the
downward trend observed during the final months of 2022. Mild winter temperatures, relatively weak
demand, and abundant storage levels in Europe kept prices low in January and February. In addition,
the expected production restart at Freeport LNG in the United States also contributed to low prices.
However, in March, prices rose due to malfunctions at French nuclear plants and strikes at French LNG
terminals. Prices though started to decrease again in April.
In May 2023, spot prices in Asia and Europe dipped below 10 USD/MMBtu, the lowest since May 2021,
with JKM at 9.28 USD/MMBtu, and TTF and NBP at 8.41 USD/MMBtu and 7.90 USD/MMBtu, respectively,
due to abundant supplies, weak demand, and mild weather. However, prices increased in June 2023 due
to buying interest from China and India, and maintenance at Norwegian gas processing plants.
Prices decreased once again in July 2023. Short-lived heatwaves in Europe caused relatively lower
demand and thus the fall of TTF and NBP prices. Prices in Northeast Asia declined, even amid a heatwave
and maintenance on regional LNG export facilities; however, the JKM benchmark regained its premium
over European prices.
Prices in August and September 2023 were impacted by strikes at major Australian LNG facilities,
maintenance in Norwegian gas fields, and rising temperatures in Northeast Asia and Europe. In October
2023, additional supply disruption concerns emerged from the Israel-Hamas conflict and the Baltic
connector shutdown in Europe, resulting in the year's highest spot prices. In October, JKM reached 17.72
USD/MMBtu, while the TTF and NBP reached 14.88 and 15.08 USD/MMBtu, respectively.
After peaking in October 2023, spot prices decreased in November 2023 as unions in Australia agreed
to endorse deals on pay and conditions at Chevron’s LNG facilities (Reuters, 2023). The observed further
decrease in price in December was a consequence of ample supply and weak demand in Northeast Asia.
This lower spot price temporarily increased buying interest from China. Relatively low demand, ample
supplies, and mild temperatures in Europe also contributed to the fall in prices. The JKM spot priceclosed in 2023 with a monthly average price of 11.52 USD/MMBtu for JKM; TTF and NBP closed at 10.46
USD/MMBtu and 10.27 USD/MMBtu, respectively.
The Henry Hub (HH) natural gas monthly spot price in the United States averaged 2.53 USD/MMBtu in
2023. The price reduction in the HH resulted from record-high production, slow growth in consumption,and rising natural gas inventories. Record-high natural gas production was the main driver for the fallin 2023 prices. Improved well-level productivity and high crude oil prices in 2023 benefited productionin the Permian, Haynesville, and Appalachia regions. Additionally, the warm temperatures in January
and February 2023 led to a fall in consumption in the building sector. The mild winter also decreased
withdrawals from underground storage.

47

Source: Investing.com; EIA

48

2024-12023-122023-112023-102023-92023-82023-72023-62023-52023-42023-32023-22023-12022-122022-112022-102022-92022-82022-72022-62022-5602022-4702022-32022-22022-1Figure 5-2: Monthly natural gas spot prices, January 2022-January 2024 (USD/MMBtu)
80
JKM

TTF

NBP

Henry Hub

50

40

30

20

10

0

References
Section 1
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49

Section 2
BP (2023), ‘bp Energy Outlook 2050’, July 5, 2023; http://www.bp.com/energyoutlook
CEDIGAZ (2023), ‘Country Indicators’, September 2023, Cedigaz
CEDIGAZ (2023), 2023 Medium- and Long-Term Gas & LNG Outlook, February 2023,
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IEA (2023a), ‘Natural gas markets remain tight as uncertainty persists around Chinese LNG demandand further supply cuts by Russia’, Natural gas markets remain tight as uncertainty persists around
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EIA (2022), Natural gas consumption in the industrial sector has grown slowly in recent years,
December 2022, https://www.eia.gov/todayinenergy/detail.php?id=54979#
IEA (2022), ‘Gas Market Report Q1-2022’, April 2022, Gas Market Report, Q2-2022 – Analysis - IEA
IEA (2021), ‘Gas Market Report Q4-2021’, October 2021, Gas Market Report, Q4 2021 – Analysis - IEA
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Section 3
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CASE (2023), ‘Thailand Natural Gas Supply and Demand’, October 2017, 2023,
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IEA (2023), ‘World Energy Outlook 2023’, October 2023, https://www.iea.org/reports/world-energyoutlook-2023

50

EIA (2022), ‘Australia Executive Summary’, March 18, 2022,
https://www.eia.gov/international/analysis/country/AUS
EIA (2017), ‘Australian domestic natural gas prices rise as LNG exports rise’, October 20, 2017,https://www.eia.gov/todayinenergy/detail.php?id=33412
Japan Times (2023), ‘Where did all that Russian gas go?’ June 29, 2030,
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Section 4
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CEDIGAZ (2023), ‘Country Indicators’, September 2023, Cedigaz
CEDIGAZ (2023), 2023 Medium- and Long-Term Gas & LNG Outlook, February 2023,
https://www.cedigaz.org/energy-security-and-sustainability-mean-a-restructuring-of-global-gassupply-and-a-reconfiguration-of-international-gas-flows/
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EIA (2023), China Analysis, 14th of November 2023,
https://www.eia.gov/international/analysis/country/CHN
IEA (2023), ‘World Energy Outlook 2023’, October 2023, https://www.iea.org/reports/world-energyoutlook-2023
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S&P Global (2022), Thailand’s new Nong Fab LNG terminal receives first LNG cargo from Qatar, S&P
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51Section 5
CEDIGAZ (2022), 'Quarterly report – Q1 2022 – International natural gas prices', 19 April 2022.
https://private.cedigaz.org/publication/#
CEDIGAZ (2022), 'Quarterly report – Q2 2022 – International natural gas prices', 8 July 2022.
https://private.cedigaz.org/publication/#
CEDIGAZ (2022), 'Quarterly report – Q3 2022 – International natural gas prices', 12 October 2022.
https://private.cedigaz.org/publication/#
CEDIGAZ (2023), 'Quarterly report – Q4 2022 – International natural gas prices', 11 January 2022.
https://private.cedigaz.org/publication/#
CEDIGAZ (2023), 'Quarterly report – Q1 2023 – International natural gas prices', 13 April 2022.
https://private.cedigaz.org/publication/#
CEDIGAZ (2023), 'Quarterly report – Q2 2023 – International natural gas prices', 11 July 2022.
https://private.cedigaz.org/publication/#
JOGMEC (2023), Trend of Natural Gas and LNG Prices – Jun 2023, 26 July 2023,
https://oilgas-info.jogmec.go.jp/nglng_en/1007907/1009820.html
JOGMEC (2023), Trend of Natural Gas and LNG Prices – Jul 2023, 28 July 2023,
https://oilgas-info.jogmec.go.jp/nglng_en/1007907/1009847.html
JOGMEC (2023), Trend of Natural Gas and LNG Prices – Aug 2023, 31 August 2023,
https://oilgas-info.jogmec.go.jp/nglng_en/1007907/1009873.html
JOGMEC (2023), Trend of Natural Gas and LNG Prices – Sep 2023, 28 September 2023,
https://oilgas-info.jogmec.go.jp/nglng_en/1007907/1009891.html
JOGMEC (2023), Trend of Natural Gas and LNG Prices – Oct 2023, 31 October 2023,
https://oilgas-info.jogmec.go.jp/nglng_en/1007907/1009917.html
JOGMEC (2023), Trend of Natural Gas and LNG Prices – Nov 2023, 28 November 2023,
https://oilgas-info.jogmec.go.jp/nglng_en/1007907/1009947.html
JOGMEC (2023), Trend of Natural Gas and LNG Prices – Dec 2023, 27 December 2023,
https://oilgas-info.jogmec.go.jp/nglng_en/1007907/1009989.html
Reuters (2023), Chevron Australia LNG unions agree deal on eve of strikes resuming, 18 th of October
2023, https://www.reuters.com/business/energy/australia-unions-call-off-strike-chevron-lng-facilities2023-10-17/52