Gas Market Report,
Q1-2023
including Gas Market Highlights 2022INTERNATIONAL ENERGY AGENCY
The IEA examines the full spectrum of energy IEA member countries: Spain
issues including oil, gas and coal supply and Australia Sweden
demand, renewable energy technologies,
electricity markets, energy efficiency, access toAustria Switzerland
energy, demand side management and much Belgium Republic of Türkiye
more. Through its work, the IEA advocates CanadaUnited Kingdom
policies that will enhance the reliability,
affordability and sustainability of energy in its 31 Czech Republic United States
member countries, 11 association countries and Denmark
beyond.Estonia The European Commission
Finland also participates in the work
Franceof the IEA
Germany
This publication and any map included herein areIEA association countries:
without prejudice to the status of or sovereigntyGreece
over any territory, to the delimitation ofHungary Argentina
international frontiers and boundaries and to theIreland Brazil
name of any territory, city or area.ItalyChina
JapanEgypt
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Source: IEA.
International Energy Agency Portugal
Website: iea Slovak Republic Gas Market Report Q1 2023Abstract
Abstract
The global natural gas market suffered a major shock in 2022 as
Russia cut pipeline deliveries to Europe substantially, placing
unprecedented pressure on supply and triggering a global energy
crisis. Despite this, European countries were able to fill their
underground gas storage sites well above historical averages,
supported by a combination of targeted policy measures, a record
inflow of liquefied natural gas (LNG) and a steep drop in
consumption, particularly in energy-intensive industries. Russia’s
pipeline cuts also had implications for gas consuming regions
beyond Europe, leading to record high spot prices, supply tensions
and considerable demand reduction.
Unseasonably mild winter weather in the northern hemisphere,
combined with sustained LNG inflows and adequate gas storage
inventories put downward pressure on European and Asian spot
prices. Nevertheless, the global gas balance is fragile and a number
of uncertainties in 2023 exist. Gas importing markets remain
exposed to a tight supply environment and the impact of further cuts
from Russia are cause for concern. Since the crisis began,
governments in Europe and other importing markets have taken
strong policy measures to increase their energy resilience and
reduce dependence on natural gas.
This new issue of the quarterly Gas Market Report includes an
overview of the main market highlights for 2022, and an analysis of
recent gas market developments with a forecast for 2023.
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PAGE | 3 Gas Market Report Q1 2023 Table of contents
Table of contents
Gas Market Highlights 2022 ............. 6 Gas consumption fell only slightly in Central and South America in 2022
Record high gas prices and volatility weighed on hub liquidity in 2022 .. 7 despite a steep drop in Brazil; a further decline from the power
generation sector is expected in 2023 ....... 28
Churn rates continued to decline across all key natural gas markets .... 8
The drop in Brazil’s gas consumption in 2022 was almost offset by
The LNG industry in 2022 ............... 9 increases in other Central and South American markets ...... 30
Utilisation of global liquefaction capacity dipped below average in H2 Gas use for power generation slumped in Brazil in 2022, after strong
2022 .................. 11 demand in 2021 driven by all-time record droughts ........ 31
The much-anticipated FID wave for new liquefaction capacity did notEuropean gas demand recorded its steepest drop in history in 2022…
materialise in 2022 .......... 12 .................. 32
The United States supplied two-thirds of Europe’s incremental LNG …declining by over 70 bcm in 2022 amid mild weather and demand
imports, but other flexible suppliers stepped up deliveries as well ....... 13 reduction in industry .............. 33
Congestion led to record volumes of LNG in floating storage around Asian gas demand came under pressure in 2022; recovery in 2023 is
Europe during Q4 2022 ......... 14 expected to be modest .......... 34
Interest in new LNG import infrastructure has surged within the Widespread 2022 demand declines in Asia are set to be followed by an
European Union since the beginning of 2022 ........... 15 uneven recovery in 2023 .............. 36
Chinese shipyards accounted for more than a third of LNG carrier US natural gas production growth in 2022 was primarily supported by
orders globally in 2022 ........... 16 oil-driven assets, while output from pure gas-driven plays saw a limited
The value of global LNG trade surged to an all-time high in 2022, amid increase ............ 37
soaring spot gas prices .......... 17 US natural gas production reached new records in 2022 in spite of
The value of global LNG trade doubled in 2022 to over USD 450 billion limited growth from pure shale gas plays .......... 39
................... 18 Production slightly declined in the Appalachian Basin in 2022 despite
Natural gas supply security takes central stage amid new wave of higher drilling and completion, while Permian drilling grew much faster
market reforms in 2022 .......... 19 than completion .............. 40
The European Union adopted a Joint Gas Purchasing Mechanism inUS natural gas production growth is expected to slow in 2023 .... 41
2022 .................. 22 Russian piped gas supplies to Europe fell in 2022 to their lowest level
Gas market update and short-term forecast ............ 25 since the mid-1980s .............. 42
North American natural gas demand fully recovered its 2020 losses, The steep drop in Russian piped gas supplies was partially offset by a
with estimated growth of over 4% in 2022 ......... 26 record LNG inflow .......... 43
US gas consumption jumped by over 5% in 2022, supported by power Global LNG trade growth reached 5.4% in 2022, with a massive shift in
generation and residential uses ........... 27 flows following Europe’s switch from Russian pipeline gas to LNG..... 44
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PAGE | 4 Gas Market Report Q1 2023 Table of contents
Europe drove LNG import growth and North America led LNG export Annex ...................63
growth in 2022, a pattern expected to continue in 2023 ......... 46
Summary table .............. 64
The big unknown: LNG demand in China in 2023 .... 47
Regional and country groupings ......... 65
China’s demand for LNG in 2023 presents 40 bcm of demand
Abbreviations and acronyms ........ 66
uncertainty for the global LNG market ........ 48
Units of measure ............ 67
Easing market fundamentals put downward pressure on spot prices in
Q4 2022 ............ 49 Acknowledgements, contributors and credits .......... 68
The price spread between TTF and Asian spot LNG is expected to
tighten in 2023 ............... 50
Storage withdrawals displayed a varied pattern across key gas regions
in Q4 2022 ............... 51
EU storage sites closed 2022 with inventory levels well above their five-
year average ............ 52
Low-emission gases ................ 53
The gas supply shock of 2022 put the spotlight on low-emission gases
................... 54
European countries set more ambitious hydrogen targets for the
medium term ............ 55
Hydrogen strategies, roadmaps and papers published in Europe since
2022 .................. 56
Biomethane production grew by a record amount in 2022 ..... 57
Global biomethane production reached close to 7 bcm in