IEA Report: Global Outlook for Natural Gas Set for Slow Growth

natural gas. Bigstock. (1)

The IEA report adds that, “Nearly half of the continent’s production is exported, and the role of natural gas in Africa’s energy consumption remains limited. New natural gas markets are emerging, mainly for power generation, in order to address growing electricity needs as a substitute for liquid fuels.”

With additional upstream and LNG export capacity poised to lead towards modest domestic growth, Africa’s production of natural gas is expected to grow to 290 billion cubic meters by 2025, which will equate to an average of 2.7% growth per year through the forecast period.

While natural gas demand growth is expected to slow compared to previous years, consumption in Africa is expected to grow at an average annual rate of 2.6%. Natural gas consumption in South Africa has accounted for less than 3% of the country’s energy mix, with the potential for gas’ development within the southern African region reliant on decisions to invest in its domestic production.

Despite a recent surge in LNG investment, liquefaction capacity additions are poised to slow down significantly within the next three years, due primarily to deficient investment plans during the mid-2010s, construction delays because of Covid-19 lockdown restrictions, and protracted liquefaction infrastructure project development.

The European Union’s (EU’s) pursuit to phase out gas imports from Russia, which has historically been the bloc’s largest supplier, has led to significant repercussions for global gas dynamics, with the continent’s demand displacing LNG deliveries intended for other regions. The report notes that  Russian pipeline gas exports to the EU may fall by over 55% between 2021 and 2025.

Projected to account for over 60% of global LNG trade net growth between 2022 and 2025, Europe’s LNG requirements are expected to overtake supply capacity additions this year, while global LNG trade is poised to grow at an annual rate of approximately 4% through 2025. Meanwhile, gas pipeline trade is set to decline by an average of about 2% per year, driven by declining flows to Europe by Russian pipelines.

Find out more about the report.

Share This Article

Share on twitter
Share on facebook
Share on linkedin
Share on reddit
Share on whatsapp
Share on email

Other Reads

Onur Yilmaz

Onur Yilmaz

Subscribe below to stay in touch about the latest news and event updates

X
X