Going wild: global natural gas consumption is growing
World gas use in 2024 may grow by 2.3%, according to the report of the Forum of Gas Exporting Countries (FSEG). For nine months in the main consuming countries this indicator increased by 2.8% compared to the same period of 2023 and reached 1.798 trillion cubic meters, FSEG notes. Details - in the material "Izvestia".
Consumption change
The FSEG revised the projected growth of global gas consumption in 2024 upward to 2.3%.
"This revision is primarily due to a faster than expected increase in gas consumption in key consuming countries, which together account for 60% of global gas demand," - explained in the report.
In September, the organization was preparing for growth of 1.5%, and in October - already by 2.2%. At the same time, for the first nine months of 2024, the total gas consumption in the main consuming countries increased by 2.8% compared to the same period of 2023 and reached 1.798 trillion cubic meters. Experts have recorded an increase in consumption in Asia and North America, while the EU and the UK continue to decline.
Next year, the increase in global natural gas consumption is expected to be at the level of the current year - it is about 2.3-2.5%, believes the expert on the stock market "BCS World of Investments" Lyudmila Rokotianskaya.
- At the same time, the price of natural gas will depend on the speed of supply expansion, which, in its turn, largely depends on the speed of commissioning of new LNG export terminals in the USA (Golden Pass, Corpus Christi, Plaquemines)," the expert explained to Izvestia. - Recently, a number of Western media published news about significant delays in the construction of some of them, so in 2025 the spot LNG market is likely to remain tense in terms of price volatility.
Global energy consumption is increasing annually, said Tamara Safonova, associate professor at the Institute of Economics, Mathematics and Information Technology at the Presidential Academy.
- In 2023, global energy consumption will increase by 2.5%, energy using natural gas - by 1.2%. At the same time, the total share of natural gas in the total volume of generation has already reached 23%, although the main source of energy generation in the world will still be "toxic" coal (35%)," Tamara Safonova told Izvestia. - Gas prices have the potential for further growth by the end of this year, provided consumption increases in conjunction with a decrease in export supplies of natural gas and LNG to global markets.
In September 2024, China imported 6.55 million tons of liquefied natural gas, up 27% from 5.169 million tons a year earlier. This is a new high in LNG intake for the corresponding month. The trend of demand concentration in APAC in September was supported by India (+8%), South Korea (+13%), (Taiwan +17%). Europe at the same time reduced LNG purchases by 15%, or by 1 mln tons.
China receives pipeline gas from five countries: Russia, Kazakhstan, Turkmenistan, Uzbekistan and Myanmar. Pipeline gas supplies were expected to grow year-on-year, primarily due to Gazprom's planned increase in exports via the Siberia Power Line.
Price fluctuations
In the near term, global gas prices will fluctuate both under the influence of fundamental factors (supply and demand balance) and seasonal factors, said Alexander Shneiderman, Head of Sales and Client Support at Alfa-Forex.
- Due to the fact that the heating season has started in Europe, gas prices in the EU will rise in the coming months and will hardly fall below $500 per 1,000 cubic meters," the expert told Izvestia. - Additional pressure on prices is exerted by the conflict between Gazprom and Austrian OMV. Also, on January 1, the contract on transit of Russian gas to Europe through Ukraine will expire.
In a moment prices can soar up to $1000 per 1 thousand cubic meters of gas, says Artem Deev, head of the analytical department of AMarkets.
Prices will stabilize closer to spring. The European Commission expects that in 2024 the growth will amount to almost 10%, in the next year - 14.4%.
- I believe that prices will rise in the APAC markets as well. Global consumption is increasing, albeit at a low but stable rate. I do not expect a decrease in demand. In the longer term, when new liquefaction capacities are commissioned, in particular, in the USA, Russia and Qatar, the supply will increase and prices may drop a bit," the expert told Izvestia. - However, this will be largely determined by the growth rate of the Chinese economy and demand for gas from Beijing, as well as from other Asian and African countries.
Austrian direction
Last week the price of blue fuel in Europe reached the annual maximum on the background of reports about the termination of Russian gas supplies to Austria and exceeded the cost of $500 per 1 thousand cubic meters. At the same time in mid-October its cost was about $440, indicate the data of the TTF exchange.
In mid-November, the Austrian company OMV reported that it won in arbitration proceedings against Gazprom Export because of the temporary cessation of Russian gas supplies in the fall of 2022. Based on the court decision, it decided to recover €230 million from the losing party. At the same time, the company admitted that after the court decision, contractual relations with Gazprom Export would start to deteriorate - up to the termination of gas supplies by the Russian side.
The expert community noted that Gazprom may resell the gas intended for Austria to Slovakia or reduce supplies through Ukraine. The decision will remain with the Russian company.
The daily volumes of Russian gas that OMV received this year amounted to about 17 million cubic meters, which in annual terms could amount to about 6 billion cubic meters. This corresponds to about 40-45% of Gazprom's total supplies via Ukraine. At the same time, for Austria, Russian gas "closed about 80% of supplies," he added.
"Izvestiya sent an inquiry to the Energy Ministry, but at the time of publication no response had been received.
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