Global natural gas demand is expected to dip this year and then grow at a slow rate over the following three years as Russia's war in Ukraine raises prices and drives concerns about supply disruptions, the International Energy Agency said.
In its quarterly gas report, the IEA said global gas demand is expected to decline by 0.5% this year. From 2021 to 2025, it is expected to rise by a total of 140 billion cubic metres (bcm).
That compares to demand of nearly 175 bcm last year and is less than half of a 370 bcm rise in the previous five years.
The fall in demand growth is mostly the result of weaker economic activity and less switching from coal or oil to gas because of high gas prices worldwide, the report said.
The Asia Pacific region and the industrial sector are the main drivers of growth, accounting for 50% and 60% of the increase to 2025 respectively, but this is subject to change if there is lower economic growth and sustained high prices.
A European Union plan to phase out all gas imports from Russia before the end of the decade means Russian pipeline exports to the EU could fall by more than 55% by 2025 compared to 2021 levels.
However, they could fall by 75% - from 120 bcm in 2021 to 30 bcm by 2025 - if Russian gas flows are completely cut.
High wholesale gas prices in Europe mean the bloc is drawing in record amounts of liquefied natural gas (LNG) cargoes. Europe's LNG demand is expected to outpace supply capacity additions this year and could account for more than 60% of the net growth in global LNG trade to 2025.
Worldwide, LNG capacity additions are set to slow in the next three years due to curtailed investment plans following lower LNG prices in the middle of last decade and construction delays arising from COVID-19 lockdowns.
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