Global gas demand growth may be slowing. File Image / Pixabay
The International Energy Agency is forecasting a significant slowdown in global natural gas demand growth in the next few years.
The organisation is forecasting global demand growth of 140 billion cubic meters in natural gas between 2021 and 2025, it said in an emailed statement this week. This is less than half the growth previously forecast, and less than the 170 bcm increase seen in 2021 alone.
"The downward revision in gas demand growth in the coming years is mostly the result of weaker economic activity and less switching from coal or oil to gas," the organisation said in the statement.
"Only one-fifth of it comes from efficiency gains and substituting renewables for gas, highlighting the need for greater progress on clean energy transitions.
"Faster roll-outs of renewable power generation and stronger efforts to use energy more efficiently would ease pressures on energy prices and help price-sensitive emerging markets access gas supplies that can deliver rapid improvements to air quality and carbon intensity."
The news may come as welcome relief to the LNG bunker market, which is still expecting rapid growth this decade despite current high prices.
LNG bunkers priced in fuel oil terms at Rotterdam stood at $2,178/mt this week, according to Ship & Bunker prices from supplier Titan, up from $627/mt a year ago.
But prices are unlikely to drop significantly in the near term during the crisis prompted by Russia's invasion of Ukraine. This winter in Europe is likely to prove a crunch point for the market, with strong demand from domestic heating needs meeting reduced supplies from Russia.