天然气市场报告：2023年第1季度-包括2022年天然气市场亮点（英）--IEA (1)VIP专享VIP免费

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including Gas Market Highlights 2022

Gas Market Report,

Q1-2023

The IEA examines the full spectrum of energy

issues including oil, gas and coal supply and

demand, renewable energy technologies,

electricity markets, energy efficiency, access to

energy, demand side management and much

more. Through its work, the IEA advocates

policies that will enhance the reliability,

affordability and sustainability of energy in its 31

member countries, 11 association countries and

beyond.

This publication and any map included herein are

without prejudice to the status of or sovereignty

over any territory, to the delimitation of

international frontiers and boundaries and to the

name of any territory, city or area.

Source: IEA.

International Energy Agency

Website: www.iea.org

IEA member countries:

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Japan

Korea

Lithuania

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

INTERNATIONAL ENERGY AGENCY

Spain

Sweden

Switzerland

Republic of Türkiye

United Kingdom

United States

The European Commission

also participates in the work

of the IEA

IEA association countries:

Argentina

Brazil

China

Egypt

India

Indonesia

Morocco

Singapore

South Africa

Thailand

Ukraine

Gas Market Report Q1 2023

PAGE | 3

Abstract

IEA. CC BY 4.0.

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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includingGasMarketHighlights2022GasMarketReport,Q1-2023TheIEAexaminesthefullspectrumofenergyissuesincludingoil,gasandcoalsupplyanddemand,renewableenergytechnologies,electricitymarkets,energyefficiency,accesstoenergy,demandsidemanagementandmuchmore.Throughitswork,theIEAadvocatespoliciesthatwillenhancethereliability,affordabilityandsustainabilityofenergyinits31membercountries,11associationcountriesandbeyond.Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Source:IEA.InternationalEnergyAgencyWebsite:www.iea.orgIEAmembercountries:AustraliaAustriaBelgiumCanadaCzechRepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNewZealandNorwayPolandPortugalSlovakRepublicINTERNATIONALENERGYAGENCYSpainSwedenSwitzerlandRepublicofTürkiyeUnitedKingdomUnitedStatesTheEuropeanCommissionalsoparticipatesintheworkoftheIEAIEAassociationcountries:ArgentinaBrazilChinaEgyptIndiaIndonesiaMoroccoSingaporeSouthAfricaThailandUkraineGasMarketReportQ12023PAGE3AbstractIEA.CCBY4.0.AbstractTheglobalnaturalgasmarketsufferedamajorshockin2022asRussiacutpipelinedeliveriestoEuropesubstantially,placingunprecedentedpressureonsupplyandtriggeringaglobalenergycrisis.Despitethis,Europeancountrieswereabletofilltheirundergroundgasstoragesiteswellabovehistoricalaverages,supportedbyacombinationoftargetedpolicymeasures,arecordinflowofliquefiednaturalgas(LNG)andasteepdropinconsumption,particularlyinenergy-intensiveindustries.Russia’spipelinecutsalsohadimplicationsforgasconsumingregionsbeyondEurope,leadingtorecordhighspotprices,supplytensionsandconsiderabledemandreduction.Unseasonablymildwinterweatherinthenorthernhemisphere,combinedwithsustainedLNGinflowsandadequategasstorageinventoriesputdownwardpressureonEuropeanandAsianspotprices.Nevertheless,theglobalgasbalanceisfragileandanumberofuncertaintiesin2023exist.GasimportingmarketsremainexposedtoatightsupplyenvironmentandtheimpactoffurthercutsfromRussiaarecauseforconcern.Sincethecrisisbegan,governmentsinEuropeandotherimportingmarketshavetakenstrongpolicymeasurestoincreasetheirenergyresilienceandreducedependenceonnaturalgas.ThisnewissueofthequarterlyGasMarketReportincludesanoverviewofthemainmarkethighlightsfor2022,andananalysisofrecentgasmarketdevelopmentswithaforecastfor2023.GasMarketReportQ12023PAGE4TableofcontentsIEA.CCBY4.0.TableofcontentsGasMarketHighlights2022............................................................................6Recordhighgaspricesandvolatilityweighedonhubliquidityin2022..7Churnratescontinuedtodeclineacrossallkeynaturalgasmarkets....8TheLNGindustryin2022.......................................................................9UtilisationofgloballiquefactioncapacitydippedbelowaverageinH22022......................................................................................................11Themuch-anticipatedFIDwavefornewliquefactioncapacitydidnotmaterialisein2022................................................................................12TheUnitedStatessuppliedtwo-thirdsofEurope’sincrementalLNGimports,butotherflexiblesupplierssteppedupdeliveriesaswell.......13CongestionledtorecordvolumesofLNGinfloatingstoragearoundEuropeduringQ42022........................................................................14InterestinnewLNGimportinfrastructurehassurgedwithintheEuropeanUnionsincethebeginningof2022.......................................15ChineseshipyardsaccountedformorethanathirdofLNGcarrierordersgloballyin2022..........................................................................16ThevalueofglobalLNGtradesurgedtoanall-timehighin2022,amidsoaringspotgasprices.........................................................................17ThevalueofglobalLNGtradedoubledin2022tooverUSD450billion..............................................................................................................18Naturalgassupplysecuritytakescentralstageamidnewwaveofmarketreformsin2022.........................................................................19TheEuropeanUnionadoptedaJointGasPurchasingMechanismin2022......................................................................................................22Gasmarketupdateandshort-termforecast...............................................25NorthAmericannaturalgasdemandfullyrecoveredits2020losses,withestimatedgrowthofover4%in2022............................................26USgasconsumptionjumpedbyover5%in2022,supportedbypowergenerationandresidentialuses............................................................27GasconsumptionfellonlyslightlyinCentralandSouthAmericain2022despiteasteepdropinBrazil;afurtherdeclinefromthepowergenerationsectorisexpectedin2023.................................................28ThedropinBrazil’sgasconsumptionin2022wasalmostoffsetbyincreasesinotherCentralandSouthAmericanmarkets....................30GasuseforpowergenerationslumpedinBrazilin2022,afterstrongdemandin2021drivenbyall-timerecorddroughts.............................31Europeangasdemandrecordeditssteepestdropinhistoryin2022….............................................................................................................32…decliningbyover70bcmin2022amidmildweatheranddemandreductioninindustry.............................................................................33Asiangasdemandcameunderpressurein2022;recoveryin2023isexpectedtobemodest.........................................................................34Widespread2022demanddeclinesinAsiaaresettobefollowedbyanunevenrecoveryin2023......................................................................36USnaturalgasproductiongrowthin2022wasprimarilysupportedbyoil-drivenassets,whileoutputfrompuregas-drivenplayssawalimitedincrease................................................................................................37USnaturalgasproductionreachednewrecordsin2022inspiteoflimitedgrowthfrompureshalegasplays.............................................39ProductionslightlydeclinedintheAppalachianBasinin2022despitehigherdrillingandcompletion,whilePermiandrillinggrewmuchfasterthancompletion....................................................................................40USnaturalgasproductiongrowthisexpectedtoslowin2023...........41RussianpipedgassuppliestoEuropefellin2022totheirlowestlevelsincethemid-1980s.............................................................................42ThesteepdropinRussianpipedgassupplieswaspartiallyoffsetbyarecordLNGinflow................................................................................43GlobalLNGtradegrowthreached5.4%in2022,withamassiveshiftinflowsfollowingEurope’sswitchfromRussianpipelinegastoLNG.....44GasMarketReportQ12023PAGE5TableofcontentsIEA.CCBY4.0.EuropedroveLNGimportgrowthandNorthAmericaledLNGexportgrowthin2022,apatternexpectedtocontinuein2023.......................46Thebigunknown:LNGdemandinChinain2023................................47China’sdemandforLNGin2023presents40bcmofdemanduncertaintyfortheglobalLNGmarket..................................................48EasingmarketfundamentalsputdownwardpressureonspotpricesinQ42022................................................................................................49ThepricespreadbetweenTTFandAsianspotLNGisexpectedtotightenin2023.....................................................................................50StoragewithdrawalsdisplayedavariedpatternacrosskeygasregionsinQ42022............................................................................................51EUstoragesitesclosed2022withinventorylevelswellabovetheirfive-yearaverage.........................................................................................52Low-emissiongases......................................................................................53Thegassupplyshockof2022putthespotlightonlow-emissiongases..............................................................................................................54Europeancountriessetmoreambitioushydrogentargetsforthemediumterm.........................................................................................55Hydrogenstrategies,roadmapsandpaperspublishedinEuropesince2022......................................................................................................56Biomethaneproductiongrewbyarecordamountin2022...................57Globalbiomethaneproductionreachedcloseto7bcmin2022..........58Europeanhubpricesaveragedwellabovetheproductioncostrangeofbiomethane...........................................................................................59Low-emissiongasesaremakinginroadsintothecorporatestrategiesofoilandgasmajors.................................................................................60Annex..............................................................................................................63Summarytable....................................................................................64Regionalandcountrygroupings..........................................................65Abbreviationsandacronyms................................................................66Unitsofmeasure..................................................................................67Acknowledgements,contributorsandcredits......................................68GasMarketReportQ12023PAGE6Gasmarkethighlights2022IEA.CCBY4.0.Gasmarkethighlights2022GasMarketReportQ12023PAGE7Gasmarkethighlights2022IEA.CCBY4.0.Recordhighgaspricesandvolatilityweighedonhubliquidityin2022Naturalgashubsenablemarketparticipantstotradegasinopen,competitivegasmarkets.Tradedproductstypicallyrangefromshort-termcontracts(e.g.,within-day,day-aheadandweek-ahead)toproductswithadeliveryhorizonseveralyearsahead.Short-termcontractsareusuallyunderpinnedbyphysicaldeliveryobligationsandarecrucialforshort-termphysicalbalancing.Productswithalongerdeliveryhorizonplayanimportantroleinallowingmidstreamutilitiestooptimisetheirportfoliosandmanagerisk.Hubliquidityensuresthatdemandfrommarketparticipantsismatchedbysupplyinatime-andcost-efficientmannerwithoutcausingsignificantpricechanges.Greaterliquidityimprovesallocationefficiencyandsupplysecurityandenablespricediscovery.Onemetricusedtoassessliquidityisthechurnrate,whichindicateshowmanytimesaunitofgashasbeenexchangedbeforebeingdeliveredtoendconsumers.Marketswithachurnrateabove10aregenerallyconsideredtobeliquid.IntheUnitedStatesgasvolumestradedontheHenryHubfellby5%in2022.Thedipwasconcentratedinthesecondhalfoftheyear,whentradedvolumesdeclinedbyover15%comparedwiththesameperiodin2021.Tightermarketfundamentalsdroveupnaturalgaspricestotheirhighestlevelsince2008,whichinturnincreasedthecostofholdingpositionsandultimatelyweighedonmarketliquidity.Thechurnratefellbyalmost10%year-on-year(y-o-y)tojust40,itslowestlevelsinceatleast2012.IntheEuropeanUnionandtheUnitedKingdom,thevolumeofgastradeplummetedbyalmost20%in2022toitslowestlevelsince2017.ThesteepdropinEuropeangasconsumption(downby13%)togetherwithrapidlyrisingmargincallsweighedontradingvolumes.Overall,thechurnrateofthecombinedEUandUKgasmarketsfellby7%y-o-yto11.5–itslowestlevelsince2018.ThedeclineingastradingwasthemostpronouncedduringQ3,whengaspricessoaredtotheirhighestlevelandtradedvolumesplummetedby25%y-o-y.ThedropwasprimarilydrivenbyEurope’slargestandmostliquidgashub,theDutchTitleTransferFacility(TTF),aloneaccountingforalmost90%oftheoverallreductioningastrade.Consequently,itsshareofthetotalEuropeangastradefellfromcloseto80%in2021tobelow75%in2022.Gastradingviaexchangesremainedmoreresilient(downby10%),whileover-the-counter(OTC)volumesdroppedbyaroundone-third.Consequently,thesharetradedonexchangesrosetoover55%in2022.InAsiatradinginICEJKMderivativesfellbyover40%y-o-yamidlowerspotLNGprocurementsandrisingcostsassociatedwithtrading.ThechurnrateremainedlowintheJKMarea,decliningtojustbelow3.GasMarketReportQ12023PAGE8Gasmarkethighlights2022IEA.CCBY4.0.ChurnratescontinuedtodeclineacrossallkeynaturalgasmarketsEstimatedtradedvolumesandchurnratesacrosskeynaturalgasmarkets,2018-2022IEA.CCBY4.0.NortheastAsia=China,JapanandKorea.Sources:IEAanalysisbasedonvarioussources,includingCME(2022),VolumeandOpenInterest;ICE(2022),ReportCenter;LondonEnergyBrokers’Association(2022),MonthlyVolumeReports.GasMarketReportQ12023PAGE9Gasmarkethighlights2022IEA.CCBY4.0.TheLNGindustryin2022LNGsupplygrowthwasrelativelymodestin2022at5.5%,despiteanunprecedentedriseinLNGdemandinEuropefollowingthegradualdeclineinRussianpipelinegasdeliveriesthroughouttheyear.Theutilisationrateofgloballiquefactioncapacityaveraged84%in2022,unchangedfrom2021levelsandslightlyabovethe2017-2021averageof83%.However,therateinH22022(at82%)wasmarkedlylowerthanduringthefirsthalfof2022(at87%).Thismid-yeardeclinewasduetoanumberofunplannedsupplydisruptions(ledbytheextendedoutageatFreeport)aswellastechnicalissuesandupstreamunderperformanceatlegacyplants,particularlyinAlgeria,Nigeria,MalaysiaandAustralia.Despitethegenerallyfavourablemarketconditions(includinghighLNGpricesandstrongcontractingactivitythroughouttheyear),thelong-anticipatedwaveoffinalinvestmentdecisions(FIDs)onLNGliquefactionprojectsdidnotfullymaterialisein2022,withonlytwolarge-scaleplantsintheUnitedStates(PlaqueminesandCorpusChristiStage3)andonesmall-scalefloatingLNG(FLNG)projectinMalaysia(ZLNGSabah)gettingfinalapproval.Thetotalcapacitysanctionedlastyear(34bcm)isabout7%lowerthanthe2017-2021averageandathirdlowerthantheFIDvolumein2021.ThisrelativelyslowFIDactivitywasdueinparttorisingconstructioncostsandwidespreadengineering,procurementandconstruction(EPC)contractrenegotiationsthroughouttheyear,andinparttocontinuedreluctanceamongpotentialbuyerstocommittonewLNGcontractsinthefaceoflong-termdemanduncertainty,elevatedpricinganddecarbonisationobjectives.However,manypre-FIDprojects(includingseveraldevelopmentsinNorthAmericaaswellasQatar’sNorthFieldSouthexpansion)madesignificantprogresstowardsaneventualFIDin2022,leavingthedooropentoastrongyearin2023.LNGdemandtrendsweredominatedbyasharpsurgeingrossLNGimportsintoEurope(up66bcm),whichwasbalancedbyasteepdeclineintherestoftheworld,particularlyinAsia.WhiletheUnitedStatessuppliedapproximatelytwo-thirds(43bcm)oftheincrementalLNGinflowsintoEurope,other“swingsuppliers”werealsoabletoredirectsignificantflexiblevolumestotheEuropeanmarket,withQatar(5bcm),Egypt(5bcm),Norway(3bcm),Angola(2bcm),theRussianFederation(hereafter“Russia”)(2bcm)andTrinidadandTobago(2bcm)providingthebulkoftheremainingone-third.ThestrongpricepremiumatonshoreEuropeanhubsoverdeliveredLNGprices(pre-regasification)inbothEuropeandAsia–whichattimesexceededUSD20/MBtu–incentivisedanunprecedentedbuild-upofLNGfloatingstorageonEurope’sshoresduringthefinalquarterof2022.AtonepointinQ4,infrastructurebottlenecksGasMarketReportQ12023PAGE10Gasmarkethighlights2022IEA.CCBY4.0.combinedwithmildwintertemperaturesandfullstoragesites(reflectedinwidepricedifferentials)promptedmorethan30ladenLNGtankerstowaitforavailableregasificationslotsinEuroperatherthanselltheircargoeselsewhereatadiscount.BytheestimateofS&PGlobalCommodityInsights,totalLNGvolumesheldupinfloatingstoragearoundEuropeaveragednearly2bcminNovember2022,anall-timehighandnearlyfivetimestheaveragevolumein2020,thelastyearwhenLNGfloatingstorageplayedaprominentroleworldwideamidaglobalLNGglut.IfFIDactivitywassubduedontheliquefactionside,therewasatruerenaissanceofinvestmentinnewregasificationcapacity,withEuropeatthecentreoftheupswing.InresponsetotheprogressivereductioninRussianpipelinegassupplies,governmentsandcompanieswithintheEuropeanUnionhaveannounced,revivedoracceleratedplansforanestimated130bcmofnewLNGimportcapacitysincethebeginningof2022,includingmorethan20projectsbasedonfloatingstorageregasificationunits(FSRUs).Ofthe130bcm,about20bcmofnewregasificationcapacitywascompletedbytheendof2022andanother50bcmwasunderdevelopmentatthestartof2023,withGermany(23bcm),Italy(10bcm)andBelgium(8bcm)accountingforthehighestshareofunder-constructioncapacity.WeestimatethattheEuropeanUnion’seffectiveLNGimportcapacity(takingintoaccountexistingmarketconstraintsandinfrastructurebottlenecks)willincreasebyatleast40bcmbetweentheendof2021andtheendof2023thankstothelatestwaveofinvestmentinnewimportinfrastructure.LNGcarrierordersreachedanall-timehighof165in2022,accordingtodatafromRefinitiv,whichrepresentsastaggering130%increaseon2021.StrongdemandandlimitedcapacityatKoreanshipyardsuntil2027ledtosteeppriceincreasesfornew-buildLNGvessels(surgingtomorethanUSD250millionbytheendof2022vsUSD200millionattheendof2021).ThishasboostedthepresenceofChineseplayersintheLNGshipbuildingmarket:Chineseyardsreceivedordersforasmanyas57newLNGvesselsin2022,anotherrecordandmorethanafivefoldincreaseon2021,accordingtoRefinitiv.GasMarketReportQ12023PAGE11Gasmarkethighlights2022IEA.CCBY4.0.UtilisationofgloballiquefactioncapacitydippedbelowaverageinH22022GlobalLNGliquefactionutilisationIEA.CCBY4.0..Source:IEAanalysisbasedonS&PGlobalCommodityInsights(2023),GlobalLNGBalancesandTrade.60%65%70%75%80%85%90%95%JanFebMarAprMayJunJulAugSepOctNovDecFive-yearrangeFive-yearaverage2022GasMarketReportQ12023PAGE12Gasmarkethighlights2022IEA.CCBY4.0.Themuch-anticipatedFIDwavefornewliquefactioncapacitydidnotmaterialisein2022FIDsfornewLNGliquefactioncapacity,2014-2022IEA.CCBY4.0.Source:IEAanalysisbasedonICIS(2023),ICISLNGEdge.020406080100120201420152016201720182019202020212022Nameplatecapacity(bcm/yr)UnitedStatesIndonesiaMozambiqueRussiaCanadaMauritaniaandSenegalNigeriaMexicoQatarAustraliaMalaysiaGasMarketReportQ12023PAGE13Gasmarkethighlights2022IEA.CCBY4.0.TheUnitedStatessuppliedtwo-thirdsofEurope’sincrementalLNGimports,butotherflexiblesupplierssteppedupdeliveriesaswellIncrementalLNGimportflowsintoEuropebysource,2022vs2021IEA.CCBY4.0.Source:IEAanalysisbasedonICIS(2023),ICISLNGEdge.60801001201401601802021UnitedStatesQatarEgyptNorwayRussiaAngolaTrinidadandTobagoOther2022bcmGasMarketReportQ12023PAGE14Gasmarkethighlights2022IEA.CCBY4.0.CongestionledtorecordvolumesofLNGinfloatingstoragearoundEuropeduringQ42022LNGinfloatingstorageinEurope,2015-2022IEA.CCBY4.0.Source:IEAanalysisbasedonS&PGlobalCommodityInsights(2023),GlobalLNGFloatingStoragebyImporter.0.00.20.40.60.81.01.21.41.61.82.0Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Jul-18Oct-18Jan-19Apr-19Jul-19Oct-19Jan-20Apr-20Jul-20Oct-20Jan-21Apr-21Jul-21Oct-21Jan-22Apr-22Jul-22Oct-22bcmGasMarketReportQ12023PAGE15Gasmarkethighlights2022IEA.CCBY4.0.InterestinnewLNGimportinfrastructurehassurgedwithintheEuropeanUnionsincethebeginningof2022NewandproposedLNGimportcapacityadditionsintheEuropeanUnionsinceJanuary2022IEA.CCBY4.0.Sources:IEAanalysisbasedonICIS(2023),ICISLNGEdge;S&PGlobalCommodityInsights(2023),GlobalLNGRegasificationCapacity;RystadEnergy(2023),GasMarketCube;Cedigaz(2023),Regasificationdatabase.020406080Completedin2022UnderconstructionasofJanuary2023PlannedasofJanuary2023bcmBelgiumCroatiaCyprusFinlandFranceGermanyGreeceItalyLatviaNetherlandsPolandGasMarketReportQ12023PAGE16Gasmarkethighlights2022IEA.CCBY4.0.ChineseshipyardsaccountedformorethanathirdofLNGcarrierordersgloballyin2022LNGcarrierordersbybuildercountryIEA.CCBY4.0.Source:RefinitivEikon(2023),Shippingdata.020406080100120140160180201120122013201420152016201720182019202020212022NumberofvesselsChinaKoreaOtherGasMarketReportQ12023PAGE17Gasmarkethighlights2022IEA.CCBY4.0.ThevalueofglobalLNGtradesurgedtoanall-timehighin2022,amidsoaringspotgaspricesDespiterisingbyamere5.5%involumetricterms,thevalueofglobalLNGtradedoubledin2022toanall-timehighofUSD450billion.TheglobalenergyandgascrisistriggeredbyRussia’sinvasionofUkrainedroveupspotgaspricesandLNGimportbillstorecordlevelsacrosskeyAsianandEuropeanmarkets.GasandLNGproducers’recordprofitscouldsupportadditionalinvestmentinreducingtheemissionsintensityofgasvaluechains,enhancingmethanecaptureeffortsanddiversifyingeconomicstructurestoadapttothenewglobalenergyeconomythatisemerging.LNGplayedacriticalroleinmitigatingtheimpactofRussia’sdeepcutsinpipedgassupplytotheEuropeanUnionandwasinstrumentalinavoidinggassupplyshortagesin2022.ThestiffcompetitionforflexibleLNGcargoesbetweenAsiaandEuropeprovidedstrongupwardpressureonhubandLNGspotpricesthroughouttheyear.InEuropemonth-aheadpricesontheTTFaveragedoverUSD40/MBtuin2022,almosteighttimestheirfive-yearaveragebetween2016and2020.InAsiaLNGspotpricesfollowedsuit,averagingatUSD34/MBtuovertheyear,morethanfivetimestheirfive-yearaveragebetween2016and2020.Consequently,theestimatedvalueofLNGtradedunderspotmechanisms–morethandoubledtooverUSD230billion.Heightenedgeopoliticaluncertaintyandtighteningsupplydroveupoilpricestotheirhighestlevelsince2013.Thisinturnplacedupwardpressureonoil-indexedLNGcontractprices,whichroseby70%in2022toanestimatedaverageofUSD15/MBtu.Hence,thevalueofLNGtradedunderlong-termoil-indexedLNGcontracts–approximately60%ofglobalLNGtrade–roseby90%toanestimatedUSD220billion.MarketswithgreaterexposuretospotprocurementexperiencedasharperincreaseintheirLNGimportprices.TheweightedaverageimportpriceinJapanandKorea,whichrelypredominantlyonlong-term,oil-indexedcontracts,roseby80%toUSD19/MBtuin2022.Incontrast,theimportpriceoftheUnitedKingdom,heavilyreliantonspotprocurement,almosttripledcomparedwith2021toanaverageofUSD28/MBtu.Europe’sLNGprocurementcostsmorethantripledcomparedwith2021toanestimatedUSD190billion,andaccountedfor60%ofthetotalincreaseintheglobalLNGimportbill.Theregion’sLNGimportssoaredbyover60%(almost70bcm),whiletheestimatedLNGimportpricemorethandoubled.ThecombinedLNGimportbillofJapanandKorearoseby80%toclosetoUSD115billion,whileLNGimportsdeclinedby2%comparedwith2021.ThePeople’sRepublicofChina’s(hereafter“China”)LNGprocurementcostsrosebyalmost20%tooverUSD50billion,despiteadeclineof20%inthecountry’stotalLNGimports.GasMarketReportQ12023PAGE18Gasmarkethighlights2022IEA.CCBY4.0.ThevalueofglobalLNGtradedoubledin2022tooverUSD450billionEstimatedcostofLNGprocurementbykeyimportmarkets,2017-2022IEA.CCBY4.0.Sources:IEAanalysisbasedonvariouscustomsdata.0100200300400500201720182019202020212022USDbillionJapanKoreaChinaIndiaEuropeOthersGasMarketReportQ12023PAGE19Gasmarkethighlights2022IEA.CCBY4.0.Naturalgassupplysecuritytakescentralstageamidnewwaveofmarketreformsin2022TheglobalenergycrisistriggeredbytheRussianinvasionofUkraineputgassupplysecurityandmarketstabilityatthecentreofpolicyinterventionsin2022.Theyincludedtheintroductionofmorestringentstorageregulations,LNGprocurementmechanismsbasedonenhancedco-ordination,andwholesalemarketinterventionsaimingtoreducepricevolatility.MorestringentstorageregulationsarecentraltoenhancingseasonalgassupplysecurityTheIEAsuggestedtheintroductionofminimumgasstorageobligationsinthe10-PointPlantoReducetheEuropeanUnion’sRelianceonRussianNaturalGas,publishedatthestartofMarch2022.TheIEAnotedthatfilllevelsofatleast90%ofworkingstoragecapacityby1OctoberwouldbenecessarytoprovideanadequatebufferfortheEuropeangasmarketthroughtheheatingseason.TheEuropeanUnionadoptedanewstorageregulationatendofJune2022,withatargetstoragefilllevelof80%ofcapacitybeforethewinterof2022/23,and90%aheadofallfollowingwinterperiods.Theregulationincludesintermediatestorageleveltargetsaimedatachievingamoreoptimalstoragecyclethoughtheyear.SeveralEU1TheEnergyCommunityhasnineContractingParties:Albania,BosniaandHerzegovina,Kosovo,NorthMacedonia,Georgia,Moldova,Montenegro,SerbiaandUkraine.memberstates(includingBelgium,France,GermanyandItaly)adoptedmorestringentstorageregulations,withfilltargetsabove90%.TheMinisterialCounciloftheEnergyCommunity1adopteditsownGasStorageRegulationinOctober2022.ThenewrulesrequirethoseContractingPartiesthathavestorage–SerbiaandUkraine–tofollowafillingtrajectorywithintermediatetargets.AccordingtothefillingtrajectoryadoptedinNovember2022,SerbiaandUkraineshouldfilltheirstoragesitestoatleast70%and58%ofworkingcapacityrespectivelyby1September2023.InJapanthegovernmentplanstointroducea“StrategicBufferLNG”(SBL)toboostsecurityofgassupply.ThegovernmentintendsthepolicytousetheprocurementpowerofprivatecompaniestoprepareforpotentialLNGshortagesituations.TheselectedprivatecompanieswillsecuretheSBLthroughtermcontracts,beingamountsbeyondthosetheyareassumedtorequirefortheirownnormalbusinessactivities.Theycansellthepurchasedgasintobothoverseasanddomesticmarketsundernormalconditions,whileinanemergencySBLwillhavetobesoldtodomesticcompaniesthatareatriskofsupplydisruptionunderthedirectionoftheMinistryEconomy,TradeandIndustry(METI).AnylosscausedbytheGasMarketReportQ12023PAGE20Gasmarkethighlights2022IEA.CCBY4.0.transactioniscompensatedfromafundheldbyJOGMEC(JapanOrganizationforMetalsandEnergySecurity)andanyprofitisreturnedtothefund.Forthetimebeing,thegovernmentaimstosecureatleastonecargopermonthasSBLforthewinterseason,whendemandisatitshighestinJapan.InthemediumtermtheaimistoincreaseSBLtoonecargopermonththroughoutthewholeyear.Thenewmechanismisexpectedtobelaunchedinfiscalyear2023/24.InSingapore,whereimportedgasisusedtogeneratearound95%ofelectricity,aStandbyLNGFacilitywasfirstintroducedattheendof2021andextendedinto2022bytheEnergyMarketAuthority(EMA)toaddresstheriskofgassupplydisruptions.Underthecrisismeasures,whichfornowexpireattheendofMarch2023,authoritiescanorderprivatecompaniestopurchaseenoughLNGtogenerateelectricitybasedontheiravailablecapacity,aswellastouseLNGfromtheStandbyFacilityiftheydonotwishtodrawontheirowngasreserves.InChinathe14thFive-YearPlanforaModernEnergySystem,whichwasreleasedinMarch2022,setsatargettomorethandoublethecountry’sgasandLNGstoragecapacitytoreach55-60bcmby2025.Thisisequivalenttoabout13%oftotalgasconsumptionasprojectedbytheNationalDevelopmentandReformCommission(NDRC).Theacceleratedbuildoutofgasstoragecapacityisaimedatbolsteringgassupplysecurityandmitigatingtheriskofdamagingpricespikesandfuelshortages,especiallyduringthepeakwintermonths.Co-ordinatedLNGprocurementmechanismscanenhancegassupplysecurity,increasebargainingpowerandenablemoresophisticatedrisk-sharingamongcompaniesIntheEuropeanUniontheCounciladoptedaregulationinDecember2022toenhancesolidaritythroughthebetterco-ordinationofgaspurchases.TheJointPurchasingMechanismestablishesatwo-stepprocesstofacilitatetheprocurementofnaturalgasandLNG:Demandaggregation:aserviceprovider,contractedbytheEuropeanCommission,willcollectimportrequirementdatafromEUcompaniesandoffersfromnon-Russiangassuppliersandthenmatchthemthroughtheorganisationoftenders.Participationindemandaggregationwillbevoluntary,exceptforvolumerequirementsequivalentto15%ofgasstoragefillingneeds(equalling~13.5bcmor3%ofEUgasconsumptionin2021),whendemandaggregationwillbebinding.Jointpurchasing:followingthematchingofdemandwithsupply,companiescanvoluntarilyconcludecontractswiththegassuppliers,eitherindividuallyorjointly(throughconsortiums).AshighlightedbytheIEAReportonHowtoAvoidGasShortagesintheEuropeanUnionin2023,theJointPurchasingMechanismcanincreasethebargainingpowerofEUcompanies,enablemoresophisticatedrisksharinginahighlyvolatilepriceenvironmentandeventuallyfacilitatethesharingofbestpracticesrelatedtobringinglow-emissionorwastedgastomarket.GasMarketReportQ12023PAGE21Gasmarkethighlights2022IEA.CCBY4.0.JointgasprocurementofgascouldhavesignificantaddedvalueinCentralandEasternEuropeanmarkets,whichhistoricallyreliedheavilyonRussiangasimports.Thesemarketsareoftenrelativelysmall,facelogisticalissuesinsourcingLNG(beinglandlocked)andhavelimitedexperienceofLNGprocurementandtrading.BesidestheEuropeanUnion,theJointPurchasingMechanismisopentotheparticipationofcompaniesfromEnergyCommunityContractingParties.Aspartofapackageofmeasurestostrengthenenergysecurity,Singapore’senergyregulator,theEMA,alsoannouncedinOctober2022thatitwillworkwithindustrytoaggregategasprocurementandobtainlonger-term,moresecurecontracts,withoutprovidingadditionaldetailsatthetimeofwriting.Meanwhile,inChinatheNDRCinOctoberorderedstate-ownedgasimporterstosuspendLNGresalestobuyersoutsideChinaduringthewinterheatingseasoninabidtoensuresufficientdomesticsupplies,evenintheeventofacoldspell.TheNDRChasalsofacilitatedgassupplycontractsbetweencitygasdistributorsandstate-ownedenergymajorsaheadoftheheatingseason,andpledgedtosupervise“strictcontractimplementation”tosecurestablegassuppliesduringthewinter.ThoughLNGimportscontinuedtoslidefollowingtheannouncementsinOctober,they-o-ydeclineduringthelasttwomonthsof2022(down12%)wasmuchshallowerthanduringthefirst10monthsoftheyear(down23%).InJapanthegovernmentaimstofurtherincreaseitsinvolvementinLNGprocurementamidincreasinguncertaintyregardingsupply.ThegovernmentisintroducingnewlegislationempoweringMETItoaskJOGMECtoprocureLNGwhenthereis,orislikelytobe,aprobleminsecuringastablesupplyofgas.PrincipallyitassumesthatwhenprivatecompaniesfacedifficultiesconductingordinaryLNGprocurement,JOGMECwillprocureinstead.ThisupcomingsystemwouldgiveMETIsimilarlegalpowerintheLNGmarkettosupplythecitygassectorasitalreadyhasforthepowergenerationsector.GasMarketReportQ12023PAGE22Gasmarkethighlights2022IEA.CCBY4.0.TheEuropeanUnionadoptedaJointGasPurchasingMechanismin2022SimplifiedrepresentationoftheEUJointPurchasingMechanismforgasIEA.CCBY4.0.Sources:IEAanalysisbasedonEuropeanCommission(2022),EUEnergyPlatform.GasMarketReportQ12023PAGE23Gasmarkethighlights2022IEA.CCBY4.0.WholesalemarketinterventionsareaimedatreducingexcessivepricevolatilityDuring2022naturalgaspricesreachedall-timehighlevelsinAsianandEuropeanmarketsamidtightmarketconditions.Recordhighpricelevelswereaccompaniedbyexcessivevolatilityandshort-termpricevariability.IntheEuropeanUnion,theEnergyCounciladoptedatemporarymarketcorrectionmechanism(MCM)inDecember2022tolimitexcessivepricevolatilityontheEuropeangashubs.Accordingtothecouncil’sdecision,themechanismwillapplyfrom15February2023foraperiodofoneyearandwillcoverderivativeswithmaturitiesbetweenoneandtwelvemonthstradedonexchanges.TheMCMdoesnotapplytogastradedOTCviabrokerages.TheMCMwillbeactivatedwherethefollowingtwoconditionsaremetsimultaneously:Themonth-aheadpriceontheTTFexceedsEUR180/MWhforthreeworkingdays.Themonth-aheadTTFpriceisEUR35/MWhhigherthanareferencepriceforLNG2onglobalmarketsforthesamethreeworkingdays.2ThereferenceLNGpricewillbecalculatedbasedon:DailySpotNorthwestEuropeMarker(administeredbyPlattsBenchmarkB.V.);NorthwestEuropedes–half-month2(administeredbyArgusBenchmarkAdministrationB.V.);DailySpotMediterraneanMarker(administeredbyPlattsBenchmarkB.V.);Iberianpeninsulades–half-month2(administeredbyArgusBenchmarkAdministrationB.V.);Italydes–half-month2(administeredbyArgusBenchmarkAdministrationOncetriggered,themechanismintroducesa“dynamicbiddinglimit”,whichequatestotheLNGreferencepriceplusEUR35/MWh.Whilethemechanismisactive,transactionsabovethe“dynamicbiddinglimit”willnotbeallowedtotakeplace.Onceactivated,theMCMstaysinplaceforatleast20days.Thedynamicbiddinglimitisautomaticallydeactivatedwhereeitherofthefollowingconditionsismet:ThedynamicbiddinglimitisbelowEUR180/MWhforlastthreeconsecutiveworkingdays.TheEuropeanCommissiondeclaresaregionaloraUnionemergency.Theregulationincludesstrongsafeguardmeasures.Accordingly,theEuropeanCommissioncansuspendthemechanismifunintendedmarketdisturbancesoccur,whichnegativelyaffectsecurityofsupply,intra-EUflowsorfinancialstability.Theyincludedevelopmentssuchas:Astrongincreaseinnaturalgasdemand(upby15%inonemonthor10%intwoconsecutivemonthscomparedwithhistoricaveragesforthegivenperiod).AsignificantdecreaseinLNGimports.B.V.);Greecedes–half-month2(administeredbyArgusBenchmarkAdministrationB.V.);LNGJapan/KoreaDES2Half-Month(administeredbyPlattsBenchmarkB.V.);NortheastAsiades(ANEA)–half-month(administeredbyArgusBenchmarkAdministrationB.V.);thefront-monthNBPderivativesettlementprice,aspublishedbyICEFuturesEuropeandACER'sownLNGbenchmark.GasMarketReportQ12023PAGE24Gasmarkethighlights2022IEA.CCBY4.0.AsignificantdecreaseintradedvolumeontheTTFcomparedwiththesameperiodayearago.TheMCMaffectingthevalidityofexistinggassupplycontracts.Inmid-December2022theAustraliangovernmentintroduceda12-monthpricecapofAUD12/GJ(approximatelyUSD8.5/MBtu)onnewdomesticgascontractswitheastcoastproducerstohelpkeepwholesalegascontractpricesundercontrol.AccordingtoAustralianCompetitionandConsumerCommissionanalysis,abouttwo-thirdsoftheproductionofnaturalgasfromtheeastcoastofAustraliaisexportedoverseasunderlong-termcontracts.Excessvolumesarealsoproducedthatarenotcontractuallycommitted,whichmeansthattheycanbesuppliedintoeitherthedomesticmarketortheinternationalLNGmarket.Thispricecapmechanismcouldleadgasproducerstodivertmostoftheirexcessgastooverseasspotmarkets,andthedomesticmarketcouldthenfaceasupplyshortfallinthefuture.Thecapisintendedtobereviewedinmid-2023toassesstheimpactoncontractingbehaviour.DespitesomeconcernsfromindependenteastcoastLNGproducersaboutinvestmentinnewgassupplies,theAustraliangovernmenthasensuredthatthisemergencyandtemporarymeasurewillnotapplytogasfromundevelopedfields,gassoldonshort-termmarkets,orcontractedsalesunderexistingandlong-termfoundationalcontractswithinternationaltradingsellers.ThismeasureisunlikelytohaveanyimmediateimpactonLNGexportcommitmentsorcontracts.Inadditiontothepricecap,thenewlegislationhas“amandatorycodeofconducttoaddresssystemicissueswithinthemarketandguidebehaviour,whichincludesareasonablepriceprovision”.Underthisprovision,gasproducersandconsumerswillbeabletonegotiategascontractsat“reasonableprices”toreflectthecostofproductionandareasonablereturnoncapital.Thisprovisionwillremaininplaceuntilpriceanddomesticgassupplyobjectivesaremet.Thelegislationcanbeconsideredasapermanentmeasureallowingfuturemarketintervention.GasMarketReportQ12023PAGE25Gasmarketupdateandshort-termforecastIEA.CCBY4.0.Gasmarketupdateandshort-termforecastGasMarketReportQ12023PAGE26Gasmarketupdateandshort-termforecastIEA.CCBY4.0.NorthAmericannaturalgasdemandfullyrecoveredits2020losses,withestimatedgrowthofover4%in2022Preliminarydataindicatea4.4%riseinnaturalgasconsumptioninNorthAmericaduring2022.ThisincreaseisprimarilyattributedtosubstantialconsumptiongrowthintheUSpowergenerationsector,aswellastheexpansioninCanadianconsumptionreportedbybothpowergeneratorsandindustrialconsumers.NaturalgasconsumptionintheUnitedStatesexperiencednotablegrowthof5.4%in2022comparedwith2021,fullyrecoveringfromthe2020Covid-inducedlossesandincreasingbycloseto3%comparedwith2019.Thisincreasewaslargelyduetothepowergenerationsector(up7%)andtheresidentialandcommercialsector(up6%),whichwerebolsteredbycolderthanaveragetemperaturesduringtheheatingseason,aswellasseveralheatwavesduringthesummer,whichnecessitatedadditionalgas-firedpowerforcooling.In2022theindustrialsectorsawayear-on-yearincreaseof3%,mainlyduetothegrowthofthebulkchemicalsindustry.Below-normaltemperaturesinQ42022fuelledanincreaseindemandfornaturalgasforheating.InDecember2022theUnitedStateswassubjecttowinterstormconditions,includingblizzardsandaconsequentialcoldwavethataugmentedthedemandfornaturalgasintheresidential,commercialandpowersectors.InCanadanaturalgasconsumptionroseby7.8%y-o-yinthefirsttenmonthsof2022,essentiallyduetohigherdemandfromwholesaleindustrialcustomersandpowergenerators,whichwasadirectresultofthecoalphase-outpolicyinAlberta,inadditiontocolderthanaverageweather.Retailsalesalsosawa6.7%increasey-o-y,reboundingfromthecontractionexperiencedin2021.Lastly,pipelineexportstotheUnitedStatesmaintainedtheirexpansionseensince2020,with7.9%growthy-o-yin2022.Mexico’sobservednaturalgasconsumptionsawa1.3%decreaseinthefirst11monthsof2022,withdiminishedpipelineimportsfromtheUnitedStates.Productionlevelsremainedrelativelystaticduringthesameperiod.NaturalgasconsumptioninNorthAmericaisforecasttodeclinebymorethan2%in2023,principallydrivenbylowergasuseinthepowersectoronacombinationofslightlynegativeelectricitydemandgrowthandthecontinuousdevelopmentofrenewableelectricitycapacity.Pricesarelikelytohaveanadverseinfluenceonnaturalgasdemand,therebysustainingthetransitionawayfromgasinthepowergenerationsector,withweatherconditionscomparativelylessadvantageoustoheatingandcoolingincomparisonto2022.GasMarketReportQ12023PAGE27Gasmarketupdateandshort-termforecastIEA.CCBY4.0.USgasconsumptionjumpedbyover5%in2022,supportedbypowergenerationandresidentialusesGasconsumptionbymonth,UnitedStates,2021and2022Gasconsumptionbysector,UnitedStates,2022relativeto2021IEA.CCBY4.0.Note:bcf/d=billioncubicfeetperday.Sources:IEAanalysisbasedonEIA(2023),NaturalGasConsumption;NaturalGasWeeklyUpdate.0%1%2%3%4%5%6%60708090100110120JanFebMarAprMayJunJulAugSepOctNovDecbcf/d20212022Y-o-ychange(%)-2%0%2%4%6%8%10%PowergenerationIndustryResidentialandcommercialOtherTotalconsumptionY-o-ychangeGasMarketReportQ12023PAGE28Gasmarketupdateandshort-termforecastIEA.CCBY4.0.GasconsumptionfellonlyslightlyinCentralandSouthAmericain2022despiteasteepdropinBrazil;afurtherdeclinefromthepowergenerationsectorisexpectedin2023WeestimatethatnaturalgasdemandintheSouthandCentralAmericaregiondeclinedbycloseto3%in2022asawhole,onacombinationofhigherhydroavailabilityforpowergenerationcomparedwith2021,andsomeimpactofhighpricesforLNG-importingmarkets.Itisforecasttostabilisein2023ontheassumptionofnormaltemperatureandrainfallconditions.GasconsumptioninArgentinadeclinedbyanestimated1%y-o-yduringthefirstelevenmonthsof2022.Thiswasduetoan18%declinefromthepowergenerationsector,whichsawamodest3%growthinelectricitydemandandanincreaseinhydrogenerationthatcontributedtoreducingthecallongascomparedwith2021.Thissharpdeclinewaspartiallybalancedbydemandgrowthfromothersectors,includingindustry(up2%),residentialandcommercial(up8%)andtransport(up2%).Thisgrowthwassupportedbyrisingdomesticgasproduction,whichsawa7%y-o-yincreasein2022withthedevelopmentofNeuquén’sVacaMuertashaleformation.Furtherproductiongrowthandinfrastructuredebottlenecking–particularlytheplannedcommissioningofthefirstlegoftheNestorKirchnerpipelineinJune–areexpectedtosupportArgentina’sgasconsumptionin2023.Weforecastgrowthofcloseto4%,principallydrivenbypowergeneration.Brazil’snaturalgasconsumptionsteeplydeclinedinthefirsttenmonthsof2022comparedwiththepreviousyear,withanestimated21%fallinapparentconsumption.Thepowergenerationsectorwasthemaindriverbehindthischange,duetothestrongrecoveryofhydroreservoirsaftertheexceptionaldroughtsexperiencedin2021.Accordingtooperationaldata,totalelectricitygenerationincreasedbyonly10TWhy-o-y(up2%)JanuarythroughtoDecember,whilehydroelectricitygenerationrosebycloseto64TWh(up18%).Asaresult,thermalgenerationdroppedby64TWh(down53%),withgas-firedgenerationtakingthebulkoftheimpactwitha45TWhdecline(down65%).Gasuseintheenergysectorsawaslight1%declineinthefirsttenmonthsof2022,principallyduetoa10%y-o-ydropinrefineries’gasconsumption.Industrialandretailcustomersposted8%and7%growthrespectivelyoverthesameperiod.Gasuseisexpectedtofurtherdeclinein2023asoutputfromhydroandotherrenewablesfurthersqueezesgasoutoftheelectricitygenerationmix,whilehighpriceskeepalidonconsumptionintheindustrialsector.Weforecastanoveralldeclineof5%.Naturalgasconsumptiontrendsaremoremixedforothercountriesintheregion.TrinidadandTobagowastheregion’sthirdlargestgasconsumingcountryin2021atabout18bcm,andisestimatedtoremainstablein2022onreportedlylessthan1%y-o-ygrowthinGasMarketReportQ12023PAGE29Gasmarketupdateandshort-termforecastIEA.CCBY4.0.JanuarythroughtoNovember.Domesticgasproduction,whichhadbeenonadecliningtrendsince2019,recordeda7%y-o-yincreaseinthefirstelevenmonthsof2022,whichenabledareboundinTrinidadandTobago’sLNGexports.Venezuelareportedaremarkable35%y-o-yincreaseinitsobservedgasconsumptionduringthefirstfivemonthsof2022.Thisrebound,ifconfirmedforthewholeyear,wouldrestorethecountry’sgasconsumptiontoclosetoits2019level.Thecountryshowedoptimisticsignsinlate2022regardingitsupstreamoilandgascapacity:theUnitedStatesgrantedauthorisationtooilmajorChevrontoresumelimitedproductionactivityinthecountry;talksbeganonpotentialpipelineexportstoColombia;anddiscussionsmaybeginonalonger-termprojecttoconnectthestalledoffshoreDragongasfieldtoTrinidadandTobago’sLNGexportfacilities.GasconsumptioninColombiagrewbyanestimated5%in2022.Allconsumingsectorsshowedapositivetrendexceptforcompressednaturalgassalesforvehicles(down1%y-o-y).Growthwasprincipallydrivenbytheindustrialsector(up7%,withpetrochemicalsup13%)andenergysectorownuse(up7%,drivenbyhigherconsumptionforrefining).ApparentgasconsumptioninPerureportedlyincreasedby23%y-o-yin2022,supportedbyareboundinelectricitydemandandgasuseintheenergysector,asthecountryrampedupitsLNGexportsbycloseto40%comparedwith2021.InChilegasconsumptionincreasedbyareported10%y-o-yinthefirstelevenmonthsof2022.Thiswasdrivenbythepowergenerationsector,whichsawitsgasconsumptiongrowbyastrong30%y-o-yduringthefirst11monthsof2022,supportedbya3%increaseintotalelectricitydemandanda22%dropincoal-firedgenerationoverthesameperiod.ApparentgasconsumptionroseinCentralAmericaandtheCaribbeanin2022asLNGimportsincreasedby20%y-o-y,mainlysupportedbytherampingupofimportsinJamaicaandPanama(bothup64%),whiletheDominicanRepublicwasclosetostable(up5%)andPuertoRicodroppedby18%.GasMarketReportQ12023PAGE30Gasmarketupdateandshort-termforecastIEA.CCBY4.0.ThedropinBrazil’sgasconsumptionin2022wasalmostoffsetbyincreasesinotherCentralandSouthAmericanmarketsMonthlynaturalgasdemandandproduction,CentralandSouthAmerica,2021-2022IEA.CCBY4.0.Sources:IEAanalysisbasedonANP(2023),BoletimMensaldaProduçãodePetróleoeGásNatural;BMC(2023),InformesMensuales;CentralBankofTrinidadandTobago(2023),Statistics;CNE(2023),GeneraciónbrutaSEN;ENARGAS(2023),DatosAbiertos;ICIS(2023),ICISLNGEdge;IEA(2023),MonthlyGasDataService;JODI(2023),GasDatabase;MME(2023),BoletimMensaldeAcompanhamentodaIndustriadeGásNatural;OSINERG(2023),Reportediariodelaoperacióndelossistemasdetransportedegasnatural.0246810121416JMMJSNJMMJS20212022bcmArgentinaBrazilVenezuelaTrinidadandTobagoColombiaChilePeruBoliviaOtherGasMarketReportQ12023PAGE31Gasmarketupdateandshort-termforecastIEA.CCBY4.0.GasuseforpowergenerationslumpedinBrazilin2022,afterstrongdemandin2021drivenbyall-timerecorddroughtsEvolutionofmonthlyhydroandthermalelectricityproductionandLNGimports,Brazil,2020-2022IEA.CCBY4.0.Sources:IEAanalysisbasedonEPE(2023),MonthlyReviewoftheElectricityMarket;ICIS(2023),ICISLNGEdge;ONS(2023),PowerGeneration.0.00.40.81.21.62.001020304050JFMAMJJASONDJFMAMJJASONDJFMAMJJASOND202020212022LNGimports(bcm)Electricitygeneration(TWh)LNGimportsHydrogenerationGas-firedgenerationGasMarketReportQ12023PAGE32Gasmarketupdateandshort-termforecastIEA.CCBY4.0.Europeangasdemandrecordeditssteepestdropinhistoryin2022…NaturalgasconsumptioninOECDEuropefellbyanestimated13%(over70bcm)in2022–itssteepestdeclineinabsolutetermsinhistory.Recordhighgaspricesledtoanunprecedentedreductioningasdemandinindustry,whilemilderweatherconditionsweighedondistributionnetwork-relateddemand.Over40%ofthereductioninannualdemandwasconcentratedinQ4,whennaturalgasconsumptionfellbyanestimated20%(33bcm)y-o-y.Distributionnetwork-relateddemandfellby15%(34bcm)in2022,accountingforalmosthalfofthetotalreductioninOECDEurope’sgasconsumption.Milderweatherconditionsweighedonspaceheatingrequirements,whilerecordhighpricesincentivisedfuel-switching,energyefficiencymeasuresandconservationeffortsintheresidentialandcommercialsectors.Q42022sawdistributionnetwork-relateddemandfallbyanestimated20%y-o-y.UnseasonablymildtemperaturesinOctoberandthefirsthalfofNovemberdelayedthestartoftheEuropeanheatingseasonbyalmostamonthandledtoasteep30%y-o-yreductionindistributionnetwork-relateddemandduringthesemonths.Theshort-livedcoldspellinthefirsthalfofDecembertemporarilyincreasedresidentialandcommercialdemandtoabove2021levels,althoughitwasinsufficienttoreversetheoveralldemandtrend.Gas-to-powerdemandfellbyanestimated4%(6bcm)in2022.Despiterecordhighgasprices,gas-firedpowergenerationremainedresilientduringQ1-32022,asdecade-lowhydroandnucleargenerationprovidedadditionalmarketspaceforgas-firedpowerplants.Incontrast,gas-firedgenerationdeclinedbyover10%y-o-yinQ4amidlowerelectricitydemand,strongwindpoweroutputandcontinuedgas-to-coalswitching.Gasdemandinindustryfellbycloseto20%(30bcm)in2022,withall-timehighgaspricesdrivingfuel-switchingandleadingtoproductioncurtailmentsacrossthemostgas-andenergy-intensiveindustries.Thesteepestdeclinesinindustrialgasdemandwererecordedthesecondhalfof2022,withadropof25%y-o-y.OECDEurope’sgasdemandisforecastedtodeclineby3%in2023.Thisislargelydrivenbylowergasburninthepowersector,downbycloseto15%amidrapidlyexpandingrenewablesandimprovednuclearavailabilityinFrance.Industrialsectorgasdemandisexpectedtorecoverbycloseto10%.Incontrast,areturntoaveragetemperatureconditionswouldincreaseresidentialandcommercialdemandby3%.Assumingthecompletecut-offofRussianpipedgassuppliesandatighterglobalLNGbalance,steeperdemandreductionof8%wouldbeneededintheEuropeanUnion,ashighlightedintheIEAreportHowtoAvoidGasShortagesintheEuropeanUnionin2023.GasMarketReportQ12023PAGE33Gasmarketupdateandshort-termforecastIEA.CCBY4.0.…decliningbyover70bcmin2022amidmildweatheranddemandreductioninindustryEstimatedquarterlychangeingasdemand,OECDEurope,2020-2022IEA.CCBY4.0.Sources:IEAanalysisbasedonEnagas(2022),NaturalGasDemand;ENTSOG(2022),TransparencyPlatform;EPIAS(2022),TransparencyPlatform;TradingHubEurope(2022),Aggregatedconsumption.-25%-20%-15%-10%-5%0%5%10%15%20%25%-36-30-24-18-12-60612182430362020Q12020Q22020Q32020Q42021Q12021Q22021Q32021Q42022Q12022Q22022Q32022Q4Y-o-ychangein%Y-o-ychangeinbcmResidentialandcommercialPowerIndustryY-o-ychangeGasMarketReportQ12023PAGE34Gasmarketupdateandshort-termforecastIEA.CCBY4.0.Asiangasdemandcameunderpressurein2022;recoveryin2023isexpectedtobemodestAsia’sgasconsumptiondecreasedbyanestimated2%in2022asaresultofhighLNGprices,Covid-relateddisruptionsinChinaandmildweatherduringmostoftheyearinNortheastAsia.Thisrepresentsasharpreversalfrom2021,whengasdemandrosebyarobust7%astheregion’seconomiesrecoveredfromtheCovid-relatedshockof2020.Asiangasdemandisprojectedtoreturntomodestgrowthofaround3%in2023thankstotheliftingofChina’szero-Covidpolicy,anassumptionofnormalisingweatherandthemodestrecoveryofIndia’sandEmergingAsia’sgasconsumptionaftersteepdeclinesin2022.China’sgasconsumptiondecreasedbynearly1%in2022accordingtothelatestdatafromtheChongqingPetroleumandGasExchange;theNDRCreporteda1.7%dropforthesameperiod.Lastyear’sdemanddeclinewasthecombinedresultofslowingeconomicgrowth,price-drivendemanddestructionandwidespreadlockdownsunderChina’sstrictzero-Covidpolicy.ItrepresentedthefirstannualdeclineinChinesegasconsumptioninfourdecades.Thebiggestdropindemandcamefromthepowersector,whererecordgrowthinrenewableoutputandarobustincreaseincoal-firedgenerationsqueezedgas-firedplantsintheelectricitymix.CombinedconsumptioninindustryandtheenergysectorregisteredasmalldeclineasaresultofhighpricesandCovid-relateddisruptions,whilethecitygassegmentexperiencedmodestexpansionthankstogrowinggaspenetrationandweathereffects(withheatingdegreedaysnationwideupby16%andcoolingdegreedaysupby1%comparedwith2021).In2023China’sgasconsumptionisprojectedtoseeanearly7%rebound,ledbytheindustrialsector.The2023demandincreaseisfuelledbytheexpectedrecoveryofeconomicactivityfollowingtheeasingofCovid-19lockdownrestrictionsandChina’sdiminishingexposuretohighandvolatilespotLNGpricesthankstoitsnewlysignedLNGcontracts.TheseofferLNGatanaveragepriceoflessthanUSD15/MBtu,substantiallylowerthanrecentpricesonthespotmarket.Accordingtoourdatabase,about13bcmofnewLNGcontractsarescheduledtostartdeliveringin2023alone.India’sgasconsumptionisestimatedtohavedeclinedby6%in2022ashighpricessqueezedgasdemandforpowergeneration(down24%y-o-y),refining(down30%y-o-y)andthepetrochemicalssector(down32%y-o-y)inparticular.Citygasdemandwasbroadlyflat,whileconsumptioninthefertilisersegmentandotherenduses(whichincludeagriculture,upstreamoperationsandotherindustries)sawmodestexpansionthroughout2022,althoughtheywerenotenoughtocompensateforthesteepdeclinesinthemoreprice-sensitivesectorsoftheeconomy.India’sLNGimportsdroppedby17%in2022,thesteepestfallonrecordandthefirstdeclinecoveringtwoconsecutiveyearsinIndia’stwo-decadehistoryasanLNGimporter.Price-drivenfuel-switchingplayedtheleadingroleinsuppressingLNGdemand,butamodest3%increaseindomesticproductionalsocontributedtothedecreaseinLNGinflows.In2023totalgasconsumptionisexpectedGasMarketReportQ12023PAGE35Gasmarketupdateandshort-termforecastIEA.CCBY4.0.toincreaseby4%thankstoamodestrecoveryinpowersectorgasuseandcontinuing–albeitslow–growthintheindustrialandcitygassectors.Japan’stotalgasconsumptiondeclinedbyjustunder1%in2022accordingtoourestimates.Higherconsumptioninthecommercialandindustrialsectors–drivenbyJapan’songoingeconomicrecovery–wereoffsetbycontinuingdeclinesingasuseforpowergeneration.Inthefirstelevenmonthsof2022gasdemandwasalmostflat,whilecitygassalesforcommercialandindustrialusersincreasedby7%and3%,respectively,accordingtodatafromMETI.Nuclearoutputwasdownbynearly16%y-o-yduringthesameperiod,butsoaringgaspricesmeantthatgas-firedgeneratorsplayedonlyasecondaryroleinfillingtheshortfall.In2023totalgasconsumptionisprojectedtodecreasebynearly4%asgrowingsolarandnucleargenerationreducepowersectorgasuseevenfurther.HighernuclearoutputisdrivenbytheexpectedrestartofatleasttwoadditionalreactorsandimprovingoperatingratesatthetenunitsthathavealreadyrestartedsinceFukushima.Korea’sgasconsumptiondecreasedbyanestimated2%in2022,ashighernuclearandrenewableoutput(combinedwithstrongcoal-firedgenerationinthefirsthalfoftheyear)squeezedgasuseinthepowersector.Detailedsector-leveldatafromtheKoreaEnergyEconomicsInstituteindicatethatgasdemandinthecitygassegmentssawrobusty-o-ygrowthof4%duringthefirsttenmonthsof2022,butthiscouldonlypartiallyoffseta5%y-o-ydeclineinpowersectorgasuseoverthesameperiod.Gasdemandin2023issettodecreasebyanother2%,drivenbythestart-upof2.8GWofnewcoal-firedcapacity,thelate-2022restartofthe1GWHanbit4nuclearunitafteranextendedsafetychecklastingformorethanfiveyears,andthecommissioningofthe1.4GWShinHanul1nuclearblockscheduledforH22023.Growingindustrialandcitygasdemandwillpartlyoffsetthereductioningasuseforpowergeneration.EmergingAsia’sgasconsumptiondroppedbyanestimated4%in2022,ashighimportpricescombinedwithfallingdomesticsupplyfromsomeoftheregion’slegacyproducersputpressureondemand.Thailand,theregion’sbiggestgasconsumer,recordeda10%y-o-ydropinitsgasuseduringthefirstelevenmonthsof2022,withmostofthedeclineconcentratedinthepowersectorandthedomesticenergyindustry.Indonesia,thenumbertwoconsumerinemergingAsia,sawanoverall3%y-o-ydecreaseinthefirstelevenmonthsoftheyear.Y-o-yreadingsturnedmostlynegativefrommid-2022,andgasdemandwasdownby12%intheJulytoNovember2022period(withpowerandindustrybothcontributingtothedecline),asharpcontrasttothe6%y-o-ygrowthrecordedinH12022.GasdemandwasalsoseverelycurtailedinPakistanandBangladeshduetoacombinationofpowercutsandswitchingtoalternativefuelsasspotLNGbecameallbutunaffordableforthetwoSouthAsianimporters.In2022LNGimportsintoPakistanandBangladeshdroppedby18%and17%,respectively,thesharpestannualdeclineinbothcountries’briefhistoryasLNGimporters.In2023theregion’sgasconsumptionisprojectedtoincreasebyamodest2%,fuelledbygrowingeconomicactivityandpowerdemand.However,totalconsumptioninemergingAsiawouldstillremain7bcmlowerthanthe2019peak,whichwasfollowedbysteepdeclinesinboth2020and2022.GasMarketReportQ12023PAGE36Gasmarketupdateandshort-termforecastIEA.CCBY4.0.Widespread2022demanddeclinesinAsiaaresettobefollowedbyanunevenrecoveryin2023Monthlygasdemand,selectedAsiancountries,2020-2022Gasdemand,selectedAsiancountries,2020-2023IEA.CCBY4.0.Sources:IEAanalysisbasedonICIS(2023),ICISLNGEdge;CQPGX(2023),NanbinObservation;JODI(2023),GasWorldDatabase;PPAC(2023),GasConsumption;EPPO(2023),EnergyStatistics,KoreaEnergyEconomicsInstitute(2023),MonthlyEnergyStatistics,MinistryofEconomy,TradeandIndustryofJapan(2023),METIStatistics.-40%-30%-20%-10%0%10%20%30%40%50%60%Y-o-ychangeChinaIndiaIndonesiaJapanKoreaThailand-10%-5%0%5%10%15%Y-o-ychange2020202120222023GasMarketReportQ12023PAGE37Gasmarketupdateandshort-termforecastIEA.CCBY4.0.USnaturalgasproductiongrowthin2022wasprimarilysupportedbyoil-drivenassets,whileoutputfrompuregas-drivenplayssawalimitedincreaseUSnaturalgasoutputincreasedbyanestimated3.8%in2022inacontextofrisingdemandfrombothdomesticandexportmarkets,despiteexplorationandproductionplayerscontinuingtheirconservativefinancialguidanceonspending.ThebulkofthisgrowthwassupportedbyassociatedgasproductionfromthePermianBasinandotheroil-drivenshaleplays,whichtogethersawanincreaseinnaturalgasoutputof10.4%y-o-y,whileproductionfromgas-drivenshaleplaysincreasedbyamodest0.9%(anddeclinedintheleadingAppalachianBasin).Naturalgasdrillingactivityjumpedduringthefirsthalfof2022,from105activerigsinearlyJanuarytoanaverageof154inJuly.Thisgrowthrateslowedduringthesummertoreachapeakof166gasrigsbymid-September(itshighestlevelsinceAugust2019);activitythenexperiencedaslowdeclineoverthefourthquartertoreachanaverageof154activerigsinDecember.IntheleadingAppalachianBasindrillingactivityreachedanaverageof93wellspermonthin2022,comparedwith70in2021(up31%y-o-y),withanotableincreaseduringtheyearfromanaverageof86permonthinthefirstquarterto100inthefourthquarter.Thenumberofwellcompletionswashigheronaveragethanthedrillingnumbersin2022,whichledtoaslightdeclineinthenumberofdrilledbutuncompleted(DUC)wells,whichdroppedfrom671unitsinJanuaryto621inDecember.Inspiteofthisstrongdrillingandcompletionactivity,drygasproductionfromtheAppalachianBasindeclinedbyanestimated4.8%y-o-yin2022,withsomerecoveryastheyearprogressedcomparedwitha5.5%y-o-ydropinthefirstquarter.Thisunderlinesadeclineinwellproductivitythatmayberelatedtolowerdrillingactivityinthebasin’scoreareas.TheMarcellusplay,whichaccountsforover80%oftheAppalachianBasin’soutput,maintainedalmoststableproductionin2022comparedwith2021,whereastheUticaplayexperienceda21%y-o-ydropin2022.Lackofadditionalpipelinetakeawaycapacityisunderstoodtobeoneofthedriversbehindthisslowdown,asfiveoutofsixpipelineprojectsdesignedtodebottlenecktheAppalachianBasin’sgasexportcapacityhavebeencancelledoverthelastfiveyears;theremainingone–theMountainValleyPipelineproject–isstillawaitingpermitapproval.Activityinothergas-drivenbasinswasmorepositive,withastrong18%y-o-yincreaserecordedintheHaynesvilleplayin2022.TheHaynesville,whichislocatedacrossthestatesofArkansas,LouisianaandTexas,benefitsfromcloseaccesstotheGulfCoastanditsLNGexportplants.GasMarketReportQ12023PAGE38Gasmarketupdateandshort-termforecastIEA.CCBY4.0.Naturalgasoutputfromoil-drivenshaleplaysbenefitedfromrisinglighttightoilproduction,whichincreasedbyanestimated620kb/din2022.InthePermianBasin,thelargestassociatedgas-producingshaleplayandthesecondlargestgas-producingbasinaftertheAppalachian,dailyaveragetightoiloutputincreasedby14%in2022,whileassociatednaturalgasproductiongrewby17%overthesameperiod.DrillingactivityinthePermianBasinsurgedby50%y-o-yin2022,thenumberofdrilledwellsincreasingduringtheyearfrom341inJanuaryto432inDecember.Themonthlywellcompletionrateremainedabovedrillingnumbers,resultinginareductionintheDUCcountfrom1381inJanuary2022to1069inDecember.DrillingactivityalsomovedtohigherassociatedgasareaswithinthePermianBasin,whichcontributedtotheincreaseintheaveragegastooilratio(GOR)ofPermianproduction.Associatedgasproductionalsoincreased–albeitmoremodestly–intheMississippian(up11%y-o-y),EagleFord(9%),Woodford(8%)andBakken(1%)plays,whileremainingstableintheNiobraraanddecliningintheFayetteville(down6%).Conventionalgasproductionfrombothonshoreandoffshoreassetsisestimatedtohaveincreasedbycloseto2%in2022,alsoprincipallydrivenbythegrowthinassociatedgasoutputfromhigheroilproduction.USnaturalgasproductionisexpectedtoseemorelimitedgrowthin2023,afterseveralyearsoflowinvestmentdrivenbystrictfinancialguidancefromoilandgascompanies.Higherreturnsin2022donotseemtoheraldanymajorchangeinspendingtargetswhilecompanieskeepastrongfocusonshort-termshareholderreturns.EQTCorporation,amajorUSnaturalgasproducer,reportedinlate2022adoublingofitssharerepurchasingprogrammetoUSD2billionandaneardoublingofitsdebtreductiontargetfromUSD2.5billiontoUSD4billionfor2023.OtherleadinggasproducersAnteroResources,SouthwesternEnergyandChesapeakeEnergyhavecollectivelyrepurchasedclosetoUSD3billionoftheirsharesin2022.Limitedprospectsforanincreaseinspending,togetherwithcostinflation,workforceshortagesandariskoffurtherproductivitydeclinesasdrillingislessconcentratedincoreareas,arelikelytoslowtherateofgasproductiongrowthin2023comparedwithpreviousyears.OurforecastexpectsUSnaturalgasoutputtoincreasebyabout2%thisyear,principallysupportedbyassociatedgasproduction,whilepuregasshaleplaysareexpectedtoseeonlylimitedgrowth.GasMarketReportQ12023PAGE39Gasmarketupdateandshort-termforecastIEA.CCBY4.0.USnaturalgasproductionreachednewrecordsin2022inspiteoflimitedgrowthfrompureshalegasplaysGasproductionbytype,UnitedStates,2018-2022IEA.CCBY4.0.Sources:IEAanalysisbasedonEIA(2023),NaturalGasData;NaturalGasWeeklyUpdate.0.020.040.060.080.0100.0120.00102030405060708090100JJNASFJDM2018201920202021AppalachianBasinOtherdryshalePermianBasinOtherassociatedshaleOtherproductionTotalUSgasPipelineimports(net)7580859095100020406080100JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASOND20182019202020212022TotalUSgas(bcf/d)bcmGasMarketReportQ12023PAGE40Gasmarketupdateandshort-termforecastIEA.CCBY4.0.ProductionslightlydeclinedintheAppalachianBasinin2022despitehigherdrillingandcompletion,whilePermiandrillinggrewmuchfasterthancompletionDrygasproductionandwelldrillingandcompletionactivity,AppalachianandPermianbasins,2019-2022IEA.CCBY4.0.Sources:IEAanalysisbasedonEIA(2023),NaturalGasData;NaturalGasWeeklyUpdate;DrillingProductivityReport.051015202530352019202020212022Drygasproduction(bcm)AppalachianPermian01002003004005006002019202020212022WellsdrilledandcompletedAppalachian-drilledAppalachian-completedPermian-drilledGasMarketReportQ12023PAGE41Gasmarketupdateandshort-termforecastIEA.CCBY4.0.USnaturalgasproductiongrowthisexpectedtoslowin2023Drygasproductionbymainsource,UnitedStates,2020-2022IEA.CCBY4.0.Sources:IEAanalysisbasedonEIA(2023),NaturalGasData;NaturalGasWeeklyUpdate.01002003004005002020202120222023bcmDryshaleAssociatedshaleOtherproduction01002003004002020202120222023AppalachianBasinOtherdryshale01002002020202120222023PermianBasinOtherassociatedshaleGasMarketReportQ12023PAGE42Gasmarketupdateandshort-termforecastIEA.CCBY4.0.RussianpipedgassuppliestoEuropefellin2022totheirlowestlevelsincethemid-1980sRussia’ssteepgassupplycutstotheEuropeanUnionputunprecedentedpressureonbothEuropeanandglobalgasmarkets.FlexibleLNGplayedakeyroleinpartiallyoffsettingtheshortfallinRussiangasdeliveriesandmaintaininggassupplysecurityinEurope.Russia’spipedgasexportstoOECDEuropefellbyanestimated50%(83bcm)y-o-yin2022,totheirlowestlevelsincethemid-1980s.WhiledeliveriestoTürkiyedeclinedby18%y-o-y,gassuppliestotheEuropeanUnionmorethanhalved,translatingintoadropof78bcmcomparedwith2021.GazpromunilaterallycutgassuppliestoseveralEUmemberstatesduringQ2,followingtheirrefusaltoadheretoanewpaymentsystemimposedbyRussia.RussiaintroducedarangeofsanctionsonEuropeancompaniesinMay,followingwhichGazpromannouncedthatitwouldceasetousetheYamal–Europepipeline.GazpromgraduallyreducedgasflowsviaNordStreamfrommid-JuneandbytheendofAugusthadhaltedgassuppliescompletelyviathepipeline.Hence,onlythreepipelinesystems–theUkrainetransitroute,BlueStreamandTurkStream–remainedoperationalfromSeptember.NordStreamandNordStream2sufferedanactofsabotageattheendofSeptember,withpreliminaryinvestigationfindingtracesofexplosives.RussianpipedgassuppliestoOECDEuropefellbyanestimated70%(25bcm)y-o-yinQ42022.ThesteepdropinRussianpipedgassuppliesandstagnatingnon-NorwegiandomesticproductionwerecompensatedbyhigherpipelinedeliveriesfromalternativesourcesandrecordvolumesofLNGinflow.PipelineflowsfromNorwayroseby3%(or4bcm)in2022,withdeliveriesincreasinglyreroutedtowardstheEuropeanUnion(upby9%)attheexpenseoftheUnitedKingdom(downby14%).GassuppliesfromAzerbaijanviatheTransAdriaticpipelinesurgedby40%(or3bcm)y-o-yin2022,whileNorthAfricangasflowsfellby10%(or4bcm)duetothenon-availabilityoftheMaghreb–EuropepipelineandlowerLibyanflows.LNGimportssurgedby60%tocloseto170bcm–theirhighestlevelonrecord.LNGsuppliesfromtheUnitedStatestotheEuropeanUniontotalledat25bcminthesecondhalfof2022,standingwellaboveRussia’spipedexports.TheprofileofRussianpipedgassuppliesremainsamajoruncertainty.AssumingthatflowstotheEuropeanUnioncontinueattheircurrentlevel,RussianpipedgasdeliveriestoOECDEuropewoulddropbyalmost40%(or30bcm)in2023comparedwith2022.AshighlightedintheIEAreportHowtoAvoidGasShortagesintheEuropeanUnionin2023,RussianpipedgassuppliestotheEuropeanUnioncouldceasecompletely,whichwouldputfurtherpressureonmarkets.LNGimportsareexpectedtoincreasebycloseto7%,althoughastrongerrecoveryinChina’sLNGimportswouldlimitthisgrowthtojust3%.GasMarketReportQ12023PAGE43Gasmarketupdateandshort-termforecastIEA.CCBY4.0.ThesteepdropinRussianpipedgassupplieswaspartiallyoffsetbyarecordLNGinflowY-o-ychangeinEuropeannaturalgasimportsanddeliveriesfromNorway,2019-2022IEA.CCBY4.0.Sources:IEAanalysisbasedonENTSOG(2022),TransparencyPlatform;Eurostat(2022),EnergyStatistics;GasTransmissionSystemOperatorofUkraine(2022),TransparencyPlatform;ICISLNGEdge;JODI(2022),GasWorldDatabase.-90-70-50-30-1010305070902019202020212022Y-o-ychangeinbcmRussia-pipelineflowsNorway-pipelineflowsOthers-pipelineflowsLNGGasMarketReportQ12023PAGE44Gasmarketupdateandshort-termforecastIEA.CCBY4.0.GlobalLNGtradegrowthreached5.4%in2022,withamassiveshiftinflowsfollowingEurope’sswitchfromRussianpipelinegastoLNGIn2022globalLNGtradeexpandedby5.4%,aslightlylowergrowthratethanin2021.LNGimportgrowthin2022wasledbyEuropewithasharp63%increase,compensatingforasignificantdropinpipelinegasimportsfromRussia.Meanwhile,demandintheAsiaPacificregionwaslowerthanexpectedandregisteredan8%decline.China’simportsweredownby21%(thelargestannualdeclineinbothabsoluteandpercentagetermssincethestartofLNGimportsin2006),duetosloweconomicgrowthandCovid-relateddisruptions.Japanwasonceagaintheworld'slargestLNGimporter,despiteamodest3%dropinLNGinflowsin2022.KoreaimportedthesameamountofLNGin2022asin2021.Conversely,price-sensitiveSouthAsianimporterssawsharpdeclines:IndiaandBangladeshbothsawLNGimportsdecreaseby17%,whilePakistanwasdownby18%,ashighandvolatilespotLNGpricessupresseddemand.Despitethehighpriceenvironment,Malaysia(up45%),Thailand(up28%),Singapore(up22%),Indonesia(up6%)andChineseTaipei(up4%)sawgrowingLNGimports,fuelledbystrongpowerdemandandeconomicactivity–andinsomecasesalsobydecliningdomesticandpipelinegassupply.LNGimportsinCentralandSouthAmericadroppedsignificantly(down38%),thankstotherecoveryofhydroelectricreservoirlevelsafterthehistoricdroughtof2021.LNGimportsintoBrazildroppedby72%comparedwith2021.Onthesupplyside,QatarandAustraliaweretheleadingexportersin2022,followedverycloselybytheUnitedStates.ExportsfromQatargrewby3%,whiledeliveriesfromAustraliaremainedbroadlystableatelevatedlevels,despitesomeupstreamproductionconstraints.NorthAmerica’sLNGexportsincreasedby11%in2022thankstonewliquefactioncapacityadditions(includingthestart-upofCalcasieuPassLNGandthesixthtrainatSabinePassLNG)anddespitetheprolongedoutageattheFreeportLNGterminalinTexassinceJune.LNGexportsfromRussiagrewby10%in2022andabout43%ofRussiaLNGoutputlandedintheEuropeanUnion(vs35%in2021),asharpcontrasttothedecliningtrendinRussia–EUpipelineflows.Norway’sHammerfestLNGresumedproductioninJune2022afterextensiverepairsfollowingafireinSeptember2020.In2022Norway’sLNGexportswerebackto2020levels.Africawastheonlyexportingregionwhereproductiondecreasedin2022(down6%).ThebiggestexportdeclinesoccurredinNigeria(down15%),Algeria(down13%)andAngola(down9%).LNGexportsfromEgyptcontinuedtoincrease(up10%),albeitatamuchslowerpacethanlastyearwhenthepreviouslyidledDamiettaLNGterminalwasbroughtbackintoservice.TrinidadandTobagorecoveredfromlastyear,itsLNGexportsincreasingby21%in2022thanksinparttothestart-upofnewupstreamprojects,includingColibriandCassiaC.GasMarketReportQ12023PAGE45Gasmarketupdateandshort-termforecastIEA.CCBY4.0.InQ42022therateofgrowthinglobalLNGtradeacceleratedto5.6%y-o-y,aslightincreasefromarateof5.3%inthefirstthreequartersof2022.Europe’sshareofglobalLNGdemandincreasedto36%inQ42022,from24%inQ42021.Meanwhile,theAsiaPacificregion’sshareofLNGdemanddroppedto62%inQ42022,from72%inQ42021.EuropeanLNGimportsincreasedby52%inQ4y-o-y,drivenbythesharpreductioninRussianpipelineflowsandhigherstorageinjectionsstretchingwellintothefourthquarter.Onthesupplyside,highervolumesofLNGtradewereenabledbyproductionincreasesintheUnitedStates,QatarandNorwayinparticular.In2023thevolumeofglobalLNGtradeissettoincreaseby4.3%.TheexpansionofLNGdemandisfuelledbyacontinuingriseinEuropeanimportstoanall-timehighof180bcm(thanksinparttonewimportinfrastructure)andbyamodestrecoveryinAsiafollowingtheregion’sdemanddeclinein2022.LNGexportgrowthcontinuesataround4.3%thankstotheanticipatedreturnofthe20bcmFreeportterminaltofullproductioninQ12023,despiteamarkedslowdowninnewliquefactioncapacityadditionsin2023.GasMarketReportQ12023PAGE46Gasmarketupdateandshort-termforecastIEA.CCBY4.0.EuropedroveLNGimportgrowthandNorthAmericaledLNGexportgrowthin2022,apatternexpectedtocontinuein2023LNGimportsandexportsbyregion,2015-2023IEA.CCBY4.0.Source:IEAanalysisbasedonICIS(2022),ICISLNGEdge.-800-600-400-2000200400600800201520162017201820192020202120222023bcmAfricaAsiaPacificCentralandSouthAmericaEurasiaEuropeMiddleEastNorthAmericaIMPORTSEXPORTSActualForecastGasMarketReportQ12023PAGE47Gasmarketupdateandshort-termforecastIEA.CCBY4.0.Thebigunknown:LNGdemandinChinain2023China’sappetiteforimportedLNGranksamongthegreatestuncertaintiesfor2023,notjustfortheglobalLNGmarket,butalsoforgassupplyavailabilityinEuropeinthefaceofseverelyreducedpipelinegasflowstothecontinentfromRussia.In2022netLNGimportsintoChinadroppedbyanunprecedented21%(22bcm)comparedwitha17%(16bcm)increaseinthepreviousyear.Thisreductionplayedacrucialroleinenablinga63%(65bcm)increaseinLNGinflowsintoEuropetocompensateforthelostRussianvolumes.However,the2022collapseofChineseLNGdemandwasprecipitatedbyauniquesetoffactors–namelyhighspotLNGprices,slowingeconomicgrowth,andlockdownsunderChina’sstrictzero-Covidpolicy–thatareunlikelytoberepeatedinpreciselythesamecombinationin2023.OuranalysisindicatesthatasetofonlymoderatelybearishassumptionsonChina’stotalgasconsumption,domesticproductionandpipelinegasimportscoulddepressthecountry’sLNGdemandbyanother12%(10bcm)in2023,whereasaconfluenceofmoderatelybullishconditionscouldboostChina’sLNGintakeby35%(30bcm)towellabovethepreviouspeakin2021.Thetotaluncertaintyrangeisabout40bcm,withChina’s2023netimportsreaching75bcmatthelowendand115bcmatthehighend.ThisrangeisgreaterthantheuncertaintyassociatedwiththepotentiallossofallremainingpipelinegasflowsintoEuropefromRussia,whichhaveaveragedabout28bcmonanannualisedbasissincedeliveriesviatheNordStream1pipelinewerecutoffindefinitelyattheendofAugust2022.OurupdatedforecastanticipatesChina’sLNGdemandtoreach94bcmin2023.Thiswouldrepresenta10%(8bcm)increaseon2022,butfallsclosertothelowendoftheuncertaintyrange.Adisruptive“exitwave”ofinfectionsfollowingChina’srecentbreakwithitspreviouszero-Covidpolicy(signsofwhichwerealreadyevidentinJanuary2023)presentssubstantialfurtherdownsiderisktothisforecast.Conversely,China’sgrowingportfolioofLNGcontractsmeansthatthecountry’sLNGdemandin2023couldbemoreresilientandlessexposedtospotmarketpricingandvolatilitythanitwaspriorto2022.Withabout13bcmofnewLNGcontractsstartingdeliveryin2023,China’scontractedLNGvolumeisoncoursetoreachnearly110bcmthisyear,substantiallyhigherthanprojectedLNGdemandinallbutthemostoptimisticscenarios(andslightlyhigherthanChina’stotalLNGimportsattheir2021peakof108bcm).Thismeansthatin2023ChinacouldrampupitsLNGimportsbackto2021levelswithouttheneedtoincreasespotLNGpurchases.AtjustunderUSD15/MBtu,China’scontractedLNGsupplieswerealmost30%cheaperthanspotLNGimportsduring2022,accordingtopricedatafromS&PGlobalCommodityInsights.GasMarketReportQ12023PAGE48Gasmarketupdateandshort-termforecastIEA.CCBY4.0.China’sdemandforLNGin2023presents40bcmofdemanduncertaintyfortheglobalLNGmarketLNGdemand,China,2019-2023IEA.CCBY4.0.Notes:Assumptionsfor2023:Lowcase:totalconsumptiongrowthat3.2%(lowestobservedpercentagegrowthin2000-2021);domesticproductiongrowthat15bcm(averagevolumegrowthin2019-2021);pipelinegasimportgrowthat11%(7bcm)withRussiarampingupto22bcm,CentralAsiaflatat2022levelandMyanmardeliveringat4.5bcm(closetothe2019peakrate).Basecase:totalconsumptiongrowthat6.5%perourupdatedQ12023forecast;domesticproductiongrowthat10bcm(averagevolumegrowthin2015-2020);pipelinegasimportgrowthat8%(6bcm)withRussiarampingupto22bcm,CentralAsiaatclosetothe2019level(45bcm)andMyanmardeliveringatclosetothe2020-2021averagerate(4bcm).Highcase:totalconsumptiongrowthat9.4%(averagepercentagegrowthin2020-2021);domesticproductiongrowthatlessthan5bcm(basedonalineartrajectorybetween2022and2025toreachtheNationalEnergyAdministration’sMarch2022productiontargetof230bcmby2025);pipelinegasimportsremainflatat2022levels(66bcm),Russiarampsupto22bcm,CentralAsiadecreasesto40bcmwithTurkmenistandeliveringat2021levels(33bcm),Kazakhstanremainingflat(7bcm)andUzbekistandroppingtozeroduetoitsinabilitytofulfilanyexportcommitments;Myanmardeliversatclosetothe2020-2021averagerate(4bcm).Source:IEAanalysisbasedonICIS(2023),ICISLNGEdge.LowcaseBasecaseHighcase02040608010012014020192020202120222023bcmGasMarketReportQ12023PAGE49Gasmarketupdateandshort-termforecastIEA.CCBY4.0.EasingmarketfundamentalsputdownwardpressureonspotpricesinQ42022Russia’ssteepsupplycutstotheEuropeanUniondroveEuropeanhubprices,andindirectlyAsianspotLNG,toall-timehighsin2022.IntheUnitedStates,HenryHubpricesrosetotheirhighestlevelsince2008amidsoaringgasdemandforpowergeneration.Easingsupply–demandfundamentalsprovideddownwardpressureonspotpricesacrossallkeymarketsinQ4.InEurope,TTFspotpricesaveragedarecordhighofUSD38/MBtuin2022–almosteighttimestheirfive-yearaverageduring2016-2020.GaspricesrosetotheirhighestlevelinQ3,asthesteepdeclineinRussianpipedgascoincidedwithhighergasburninthepowersectorandstrongstorageinjections.Month-aheadpricesontheTTFspikedtoanall-timehighofEUR340/MWh(USD99/MBtu)attheendofAugust.However,spotpricesontheTTFmorethanhalvedinQ4comparedwiththeirQ3levelstoanaverageofUSD29/MBtu,despiteRussia’scontinuedgassupplycuts.Unseasonablymildtemperatures,above-averagestoragelevelsandrecordhighLNGinflowweighedonEuropeanhubprices.Month-aheadTTFpriceshadanaveragepremiumofalmostUSD8/MBtuabovespotprices,reflectingthegreatersensitivityofthespotmarkettoshort-termmarketforces,suchasmildspells.AsianspotLNGpricesaveragedUSD34/MBtuin2022,theirhighestlevelonrecordandmorethanfivetimestheirfive-yearaverageduring2016-2020.TheincreasinglyfiercecompetitionwithEuropeforLNGcargoes,togetherwithlowerLNGsupplyfromAustraliaandtheUnitedStates,providedstrongupwardpressureonAsianLNGspotpricesduringtheyear.However,theyfellby36%inQ4comparedtothepreviousquarteramidlowerEuropeanhubprices.AsianspotpricescontinuedtodisplayadiscountofUSD7/MBtucomparedtoTTFmonth-aheadpricesinQ4,whichsustainedhighinflowofspotLNGintotheEuropeanmarket.IntheUnitedStates,HenryHubpricesaveragedUSD6/MBtuin2022,theirhighestlevelsince2008.Highergasdemandforpowergeneration(supportedbyasharpincreaseincoalprices)coincidedwithstrongy-o-ygrowthinLNGexportsandarelativelyweaksupplyresponsefromUSproducers.Easingsupply–demandfundamentalsweighedonspotHenryHubpricesinQ4,whichfellby30%comparedwithQ3toanaverageofUSD5.5/MBtu.GaspricesmoderatedsignificantlyinJanuary2023acrossallkeygasmarkets,althoughtheyremainedwellabovehistoricaveragesinAsiaandEurope.ForwardcurvesasoftheendofFebruary2023indicatethatTTFissettoaverageUSD17/MBtu,withAsianspotLNGaveragingjustbelowUSD17/MBtuandHenryHubaveragingUSD2.8/MBtuin2023.ThepricespreadbetweenTTFandAsianspotLNGisexpectedtotightensignificantlyin2023.GasMarketReportQ12023PAGE50Gasmarketupdateandshort-termforecastIEA.CCBY4.0.ThepricespreadbetweenTTFandAsianspotLNGisexpectedtotightenin2023Mainspotandforwardnaturalgasprices,2020-2023IEA.CCBY4.0.Sources:IEAanalysisbasedonCME(2022),HenryHubNaturalGasFuturesQuotes,DutchTTFNaturalGasMonthFuturesSettlements;CMEGroup(2022),LNGJapan/KoreaMarker(Platts)FuturesSettlements;EIA(2022),HenryHubNaturalGasSpotPrice;ICIS(2021),ICISLNGEdge;Powernext(2022),SpotMarketData.0204060Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q42020202120222023USD/MBtuTTFHenryHubAsianspotLNGGasMarketReportQ12023PAGE51Gasmarketupdateandshort-termforecastIEA.CCBY4.0.StoragewithdrawalsdisplayedavariedpatternacrosskeygasregionsinQ42022Naturalgasstorageplaysacriticalroleinensuringthesecurityofgassupplyduringtheheatingseason.IntheEuropeanUnionwithdrawalsfellsignificantlybelowtheirfive-yearaverageinQ4amidunseasonablymildweather.Incontrast,adverseweatherconditionsandstronggasdemandintheUnitedStatesincreasedrelianceonstorage.IntheEuropeanUnionthestronginflowofLNGcombinedwithlowernaturalgasconsumptionenabledrecordstorageinjectionsin2022.DespitethesteepdeclineinRussianpipedgas,storageinjectionsstood25%(14bcm)abovetheirfive-yearaverageandtotalledover70bcmduringtheApriltomid-Novemberperiod.UnseasonablymildweatherinOctoberandthefirsthalfofNovembereffectivelydelayedthestartoftheEuropeanheatingseasonbyonemonth,allowinggasinjectionstotalling4bcmbetweenmid-Octoberandmid-November.Thisisaperiodwhenstoragesitestypicallyturntowithdrawals.Inventorylevelshadreached95%oftheirworkingstoragecapacitybymid-November,standing9%(or8bcm)abovetheirfive-yearaverage.LowgasdemandandrecordLNGinflowweighedongasstoragewithdrawals,whichstood70%belowtheirfive-yearaverageinQ42022andtotalledarecordlowof5bcm.WhilethecallongasstoragedeclinedonaverageinQ4,thecoldspellinearlyDecemberhighlightedtheimportanceofstorageforgassupplysecurity,withwithdrawalsmeetingover40%ofgasdemandonpeakdays.EUstoragesitesclosed2022withinventorylevelsstanding20%abovetheirfive-yearaverage.WithdrawalsremainedbelowaverageinJanuary2023,keepingstoragesites72%fullby1February,wellabovetheintermediateEUtargetof45%.EUstoragesiteswere60%fullasendofFebruary2022.InUkrainestoragewithdrawalsstoodat1.5bcminQ4,leavinginventorylevelsbelow18%oftheirworkingstoragecapacitybymid-February2023.Rebuildinginventoriestoadequatelevelsin2023willbekeytoensuringgassupplysecurityinUkraineduringthenextheatingseasonandwouldrequirearamp-upofimportsfromtheEuropeanUnion.IntheUnitedStatesstoragesiteswere80%fullatthebeginningofNovember,wellalignedwiththeirfive-yearaverage.Storagewithdrawalsstood15%(3bcm)abovetheirfive-yearaverageinQ4,ascoldertemperaturesandhighergasburninthepowersectorincreasedthecallongasstorage.Netstoragewithdrawalsmetover10%oftotalUSdomesticgasconsumptionduringNovemberandDecember.Storagesiteswere68%fullattheendof2022and51%bymid-February2023,standing15%(or8bcm)abovetheirfive-yearaverage.InJapanandKoreaLNGclosingstocksstood45%abovetheirfive-yearaverageinNovember2022.TheLNGstocksofJapan’slargestpowergenerationcompaniesstoodat2.6Mt(3.6bcm)inmid-February,30%abovetheirfive-yearaverage.GasMarketReportQ12023PAGE52Gasmarketupdateandshort-termforecastIEA.CCBY4.0.EUstoragesitesclosed2022withinventorylevelswellabovetheirfive-yearaverageIEA.CCBY4.0.Sources:IEAanalysisbasedonEIA(2022),WeeklyWorkingGasinUndergroundStorage;GIE(2022),AGSI+Database;IEA(2022),MonthlyGasDataService.020406080100120JanMarMayJulSepNovbcmFive-yearrangeFive-yearaverage2022020406080100120JanMarMayJulSepNovbcm0246810121416JanMarMayJulSepNovbcmUSundergroundstorageinventoryEUundergroundstorageinventoryJapanandKoreaLNGstockinventoryGasMarketReportQ12023PAGE53Low-emissiongasesIEA.CCBY4.0.Low-emissiongasesGasMarketReportQ12023PAGE54Low-emissiongasesIEA.CCBY4.0.Thegassupplyshockof2022putthespotlightonlow-emissiongasesTheglobalgasandenergycrisistriggeredbyRussia’sinvasionofUkraineonceagainremindedtheworldoftheimportanceofenergysupplysecurity,andindoingsohighlightedtheneedtoacceleratecleanenergytransitionswhilereducingvulnerabilitiesarisingfromfossilfuelimportdependency.Low-emissiongases3areattheintersectionofenergysupplysecurityanddecarbonisationefforts:besidescontributingtolower-emissionpathways,domesticallyproducedlow-emissiongasesenhancemarketresilienceandcansignificantlyreducerelianceonfossilfuelimports.IntheEuropeanUniontheEuropeanCommissionpublishedtheREPowerEUPlaninMay2022,settingoutavisiontofurtheracceleratethegreentransitionandcutthebloc’sdependenceonRussianfossilfuelimports.REPowerEUsetsambitioustrajectoriesforlow-emissiongases,including:Biomethaneproductionrampingupto35bcm/yrby2030–amorethantenfoldincreasefromtoday’slevels.Low-emissionhydrogensupplyincreasingto20Mtby2030,ofwhich10Mtisbeimportedfromdiversesources.Dependingonthe3Low-emissiongasesincludebiomethane,low-emissionhydrogen,syntheticmethaneandnaturalgassubjecttocarboncapture,utilisationandstorage(CCUS)-basedtechnologies.end-usesector,therapidscale-upoflow-emissionhydrogencouldreplace34-68bcm/yrofnaturalgasby2030.IntheUnitedStatestheInflationReductionActwassignedintolawinAugust2022,givingasignificantboosttocleanenergytechnologiesthroughtheprovisionofUSD370billionoffundingforenergysecurityandclimatechangeinvestments.Theactissettosignificantlyboostthedeploymentoflow-emissiongasesthroughanumberofmeasures,including:Taxcreditsofupto30%forbiogasfacilitiesbuiltbythebeginningof2025.Productiontaxcreditsforcleanhydrogenplantsin2023,whichcanreceivecreditsofUSD0.026perkWhanduptoUSD3perkgofhydrogenforthefirsttenyearsofoperation.InJapantheGreenTransformation(GX)programmeissettoprovideamajorfundingboostfortechnologiesthatproducelow-emissionhydrogen,syntheticmethaneandammonia.TheprogrammededicatesJPY7trillion(approximatelyUSD52billion)insubsidiesoverthenext10yearstoestablishahydrogenandammoniasupplynetwork.GasMarketReportQ12023PAGE55Low-emissiongasesIEA.CCBY4.0.EuropeancountriessetmoreambitioushydrogentargetsforthemediumtermSeveralEuropeancountriesunveiledtheirhydrogenstrategiesandroadmapsin2022.Othersrevisedtheirhydrogenstrategies,settingmoreambitiousdeploymenttargetsforthemediumterm.AustriapublisheditsNationalHydrogenStrategyinJune2022.Thestrategytargetstheinstallationof1GWofelectrolysercapacityfortheproductionofrenewablehydrogenby2030.Fordemandcreation,thestrategyfocusesonhard-to-abatesectors,includingenergy-intensiveindustries.InBelgiumtheFederalHydrogenVisionandStrategywasapprovedbytheCouncilofMinistersinOctober2021.AnupdatedversionwaspublishedinOctober2022.Thestrategyfocusesparticularlyontheimportanceofrenewablehydrogenanditspotentialtodecarboniseindustryandtransport.Accordingtotheupdatedversion,totaldomesticdemandforbothhydrogenmoleculesandhydrogenderivativesisseentoincreaseto125-200TWh/yrby2050.DenmarkadopteditsPower-to-XStrategyinMarch2022toacceleratetheconversionofelectricityintogreenhydrogenandothere-fuelsovertenyears.Thecountryaimstobuild4-6GWofelectrolysiscapacityby2030.Thestrategyisintendedtosupporttheuseofgreenhydrogenparticularlyinhard-to-abatesectorslikeshippingandaviation,aswellasheavyroadtransportandindustry.GermanypublisheditsNationalHydrogenStrategyinJune2020,withatargetfor5GWofelectrolysercapacityby2030.TheFederalGovernmentiscurrentlyworkingonrevisingthehydrogenstrategyinordertoensurethatthetargetsfromthecoalitionagreement(e.g.increasingtheelectrolysercapacityto10GWby2030)aremet.Publicationisplannedfor2023.TheUnitedKingdompublisheditsHydrogenStrategyin2021,settinganambitionfor5GWoflow-carbonhydrogenproductioncapacityby2030.TheBritishEnergySecurityStrategy,publishedinApril2022,doubledtheproductioncapacityambitiontoupto10GWby2030,withatleasthalfofthiscomingfromelectrolytichydrogen.ScotlandpublisheditsHydrogenActionPlaninDecember2022.Theplanhasatargetof5GWofrenewableandlow-carbonhydrogenby2030and25GWby2045.TheSwissHydrogenRoadmapiscurrentlyinpreparationwithafirstoutlineduetobepublishedin2023.AhydrogenpaperwaspublishedinSeptember2022.Itpresentsninestatementsonthegoals,roleandareasofapplicationofhydrogeninSwitzerland.GasMarketReportQ12023PAGE56Low-emissiongasesIEA.CCBY4.0.Hydrogenstrategies,roadmapsandpaperspublishedinEuropesince2022IEA.CCBY4.0.Source:IEAanalysisbasedonvariouspolicydocuments.GasMarketReportQ12023PAGE57Low-emissiongasesIEA.CCBY4.0.Biomethaneproductiongrewbyarecordamountin20222022markedanotherrecordyearforbiomethaneproductiongrowth.Globalbiomethanesupplyincreasedbyanestimated16%(or1bcm)in2022tocloseto7bcm.ThiswasprimarilydrivenbytheEuropeanUnionandtheUnitedStates,togetheraccountingforapproximately90%ofincrementalbiomethanesupply.TheUnitedStatesremainsbyfarthelargestbiomethane-producingcountryintheworld,apositionithasheldsince2019.Thecountry’sbiomethaneoutputgrewbyanimpressive20%(closeto0.4bcm)toreach2bcmin2022,accountingforalmost30%ofglobalbiomethaneoutput.Itcurrentlyhasover250operationalbiomethanefacilities,witharound220additionalplantsunderconstructionorplanned.Municipalsolidwasteremainsthesinglelargestsourceoffeedstock,underpinningapproximately70%oftotalUSbiomethaneproduction.Agriculturalwasteaccountsforalmost20%ofbiomethanefeedstocksupply,whilefoodwasteandwastewateraccountfortheremaining10%.Supplygrowthin2022waslargelydrivenbybiomethanefacilitiesrelyingonagriculturalwasteasafeedstock.Theseplantsaloneaccountedforover55%ofincrementalbiomethanesupplyin2022,followedbyfacilitiesusingmunicipalsolidwaste.Itisestimatedthataround90%ofbiomethaneproductionfacilitieshavegridinjectioncapability,withtheremaining10%dedicatedtoon-siteuse.Asforenduse,approximately90%ofbiomethaneservesasatransportfuel,withtheremaining10%primarilyusedforpowergeneration.TheRenewableNaturalGasIncentiveActof2022wasintroducedinCongressinDecember2022.Thebillwouldcreateaten-yearUSD1pergallontaxcreditforsellersofrenewablenaturalgasusedfortransport.IntheEuropeanUnionbiomethaneproductionincreasedbyanestimated15%(0.5bcm)tocloseto4bcmin2022.ThisgrowthwasprimarilydrivenbyDenmarkandFrance,togetheraccountingforalmosttwo-thirdsofincrementalbiomethanesupplyinEurope.InFrancebiomethaneoutputgrewbyanestimated65%comparedwith2021toreach0.65bcm.ThisputsFranceasthesecondlargestbiomethaneproducerinEurope,behindGermanyandsurpassingDenmark.ThenumberofbiomethanefacilitiesinFrancesurgedfrom365attheendof2021to442plantsasofmid-2022.Agriculturalwasteaccountsforaround80%ofthefeedstocksupplyusedforbiomethaneproduction.InDenmarkbiomethaneoutputgrewby15%comparedwith2021toreachover0.6bcm.Theshareofbiomethaneintotaldomesticgasconsumptionrosefrom20%in2021toover30%in2022–thehighestshareofanyEuropeancountry.EuropeannaturalgasspotpriceshadanaveragepremiumofUSD11-24/MBtuabovethetypicalcostrangeofbiomethaneproductionin2022,andhencecontributingtoalowernaturalgasimportbill.GasMarketReportQ12023PAGE58Low-emissiongasesIEA.CCBY4.0.Globalbiomethaneproductionreachedcloseto7bcmin2022Estimatedbiomethaneproductionbyregion,2010-2022IEA.CCBY4.0.Sources:IEAanalysisbasedonCBS(2022)OpenData;Cedigaz(2021),GlobalBiomethaneDatabase;Energinet(2022),EnergiDataService;GRDF(2022),Productionannuelledebiométhaneparsited'injection;RNGCoalition(2022).024682010201120122013201420152016201720182019202020212022bcmEuropeNorthAmericaOtherregionsGasMarketReportQ12023PAGE59Low-emissiongasesIEA.CCBY4.0.EuropeanhubpricesaveragedwellabovetheproductioncostrangeofbiomethaneDailyTTFmonth-aheadpricesvsestimatedcostrangeofbiomethaneproduction,January2022-December2022IEA.CCBY4.0.Sources:IEAanalysisbasedfromTTFmonth-aheadpricessourcedfromICE(2023),DutchTTFNaturalGasFutures.020406080100Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22USD/MBtuEstimatedcostrangeofbiomethaneproductionTTFGasMarketReportQ12023PAGE60Low-emissiongasesIEA.CCBY4.0.Low-emissiongasesaremakinginroadsintothecorporatestrategiesofoilandgasmajorsLow-emissiongasesaregainingtractionamongoilandgasmajors,highlightedbyseverallandmarkacquisitionsandinvestmentsduring2022.Severalfactorsareunderpinningthisorientationofcorporatestrategiestowardslow-emissiongases,inparticulartheopportunityto:ReducetheirScope3emissionsamidtighteningregulatorystandards.Diversifytheirassetsandfuelsupplyportfoliowithastrategicviewtobecomingpartofanincreasinglydecarbonisedenergysystem.Buildupskillsandcapabilitiesinrelationtotheproductionandmarketingoflow-emissiongases.Benefitfrominteroperabilitywithexistinginfrastructureandsynergieswiththeirexistingretailandmarketingactivities.Thissectionprovidesanon-exhaustiveoverviewofthemajorprojectdevelopmentsandcompanyacquisitionsundertakenbyoilandgasmajorsin2022.BiomethaneComparedtootherlow-emissiongases,biomethaneproductionisconsideredamorematuretechnologywithsignificantlylowercosts.Hence,acquiringbiomethane-relatedassetscandriveemissionreductionsintheshortterm.Significantdealsin2022wereasfollows:InOctober2022BPannouncedtheacquisitionofArchaeaEnergy,aleadingbiomethaneproducerintheUnitedStates,forUSD4.1billion.Thedealwascompletedon28December.ArchaeaEnergyoperates50biomethaneandlandfillgas-to-energyfacilitiesacrosstheUnitedStates,producingaround13MBtuofbiomethaneperyear.BP’sambition,basedonasignificantdevelopmentpipeline,istoproducecloseto145MBtuofbiomethaneby2030.InNovember2022ShellannouncedtheacquisitionofNatureEnergy,theDenmark-basedEuropeanleaderinbiomethaneproductionfromorganicwaste,fornearlyUSD2billion.ThedealwascompletedattheendofFebruary2023.NatureEnergyhas14operatingplantsthatcurrentlyproduceabout6.5MBtuofbiomethaneperyear.Withadevelopmentpipelineofabout30projectsinEuropeandNorthAmerica,theobjectiveistoreach16MBtuby2030.ThisacquisitionwillscaleupShell’sexistingbiogasbusiness,whichconsistsofoneoperationalsiteandfourunderconstruction,allintheUnitedStates,plustradingandsupplyunits,aspartofShell’sstrategytobuildanintegratedbiomethanevaluechainatglobalscale.InJanuary2023ChevroncompletedtheacquisitionofBeyond6anditsnetworkof55compressednaturalgas(CNG)stationsacrosstheUnitedStates.Aspartofthetransaction,MercuriaandChevronhaveenteredalong-termsupplyrelationshiptodeliverbiomethanetoChevron.GasMarketReportQ12023PAGE61Low-emissiongasesIEA.CCBY4.0.Specificpeer-to-peercontracts,suchasbiomethanepurchaseagreements,arestillnascentbutcoulddrivedemandasregulatorysupportdecreases.Theselong-termcontracts,concludedbetweenabiomethaneproducerandanofftaker,includeallthetermsoftheagreement,suchastheamountofbiomethanetobesupplied,thenegotiatedprice,whobearswhatrisk,therequiredaccounting,andthepenaltiesifthecontractisnothonoured.Itpartiallyremovestheriskofmarketfluctuations,whichencouragesinvestmentindebt-financedprojects.Low-emissionhydrogenOilandgasmajorsaregraduallyincreasingtheirexposuretohydrogenprojectsthroughtheacquisitionofandinvestmentinproductionassets.Keyacquisitionsandprojectinvestmentsin2022includethefollowing:BPagreedinJune2022toacquirea40.5%shareandbecomethelargestshareholderintheAsianRenewableEnergyHub(AREH)inWesternAustralia.Theprojectistobesupportedby26GWofrenewablescapacity,withatargettoproduceupto1.6Mt/yrofhydrogenandaround9Mt/yrofgreenammonia.TotalEnergiesagreedinJune2022toacquirea25%interestinAdaniNewIndustriesLimited(ANIL).ANILhasatargettoproduce1Mt/yroflow-emissionhydrogenby2030,underpinnedbyaround30GWofnewrenewablepowergenerationcapacity.ShelltookafinalinvestmentdecisioninJuly2022tobuildHollandHydrogenI.Theprojectistobeunderpinnedbya200MWcapacityelectrolysertoproduceupto60000kilogramsofrenewablehydrogenperday(equivalentto0.02Mt/yr),makingitEurope’slargestrenewablehydrogenplantonceoperationalin2025.ShellOmanacquireda35%stakeinGreenEnergyOman(GEO)inJanuary2023tojointheconsortiumdevelopingOman’slargestlow-emissionhydrogenproject.Theprojectisexpectedtobedevelopedinmultiplephasestoproduceapproximately1.8Mt/yroflow-emissionhydrogenatfullcapacity.SyntheticmethaneandLNGSyntheticmethane(ore-methane)isproducedbycombininglow-emissionhydrogenandacarbonsource.Whileitisperfectlyinterchangeablewithnaturalgas,itsproductioncostsremainelevated(ataboveUSD50/MBtu)andwouldrequirethedevelopmentofaseparatecarbonvaluechainandemissionaccountingsystem.Similarlytonaturalgas,syntheticmethanecanbeliquefiedintoliquidsyntheticgas(LSG)andshippedviaLNGcarriers.Japan’s6thStrategicEnergyPlanhassetatargetforsyntheticmethanetocomprise1%ofthecitygassupplyinexistingnetworksby2030,increasingto90%by2050.JapanesecompaniesareconsideringseveralprojectstodevelopsyntheticmethanewiththeaimofimportingitintoJapan:MarubeniandOsakaGasannouncedinJuly2022aprojecttostudytheproductionofsyntheticmethaneinPeruanditsdeliverytoJapan.GasMarketReportQ12023PAGE62Low-emissiongasesIEA.CCBY4.0.TokyoGas,OsakaGasandTohoGasenteredanagreementwithMitsubishiattheendofNovember2022toconductafeasibilitystudyoftheproductionofsyntheticmethaneattheCameronLNGterminalintheUnitedStates.Thecompanies’intentionistoexport130000t/yrofsyntheticmethaneby2030.OsakaGas,TallgrassEnergyandGreenPlainsagreedinDecember2022toconductajointfeasibilitystudyonsyntheticmethaneproduction.Thefirmsaimtoproduceupto200000t/yrofsyntheticmethaneby2030andexportittoJapanfromtheFreeportLNGexportterminalintheUnitedStates.GasMarketReportQ12023PAGE63Low-emissiongasesIEA.CCBY4.0.AnnexGasMarketReportQ1-2023PAGE64AnnexIEA.CCBY4.0.SummarytableWorldnaturalgasconsumptionandproductionbyregionandkeycountry(bcm)ConsumptionProduction2019202020212022202320192020202120222023Africa164161169163167252241262254266AsiaPacific829834891876903630626651659666ofwhichChina307325367364388174189205218228CentralandSouthAmerica156142153149148167150148151153Eurasia608584634610602921866961873825ofwhichRussia482460501475467738692762672620Europe590576609522505249230222229226MiddleEast543547562575598668669693712734NorthAmerica1104107910911147111711741154118912401258ofwhichUnitedStates88686887492189096895498410211041World3993392441094042404140613936412541194128GasMarketReportQ1-2023PAGE65AnnexIEA.CCBY4.0.RegionalandcountrygroupingsAfrica–Algeria,Angola,Benin,Botswana,Cameroon,Congo,DemocraticRepublicofCongo,Côted’Ivoire,Egypt,Eritrea,Ethiopia,Gabon,Ghana,Kenya,Libya,Morocco,Mozambique,Namibia,Nigeria,Senegal,SouthAfrica,Sudan,UnitedRepublicofTanzania,Togo,Tunisia,Zambia,Zimbabweandothercountriesandterritories.1AsiaPacific–Australia,Bangladesh,BruneiDarussalam,Cambodia,ChineseTaipei,India,Indonesia,Japan,Korea,theDemocraticPeople’sRepublicofKorea,Malaysia,Mongolia,Myanmar,Nepal,NewZealand,Pakistan,thePeople’sRepublicofChina,2thePhilippines,Singapore,SriLanka,Thailand,VietNamandothercountriesandterritories.3CentralandSouthAmerica–Argentina,Bolivia,Brazil,Chile,Colombia,CostaRica,Cuba,theDominicanRepublic,Ecuador,ElSalvador,Guatemala,Haiti,Honduras,Jamaica,NetherlandsAntilles,Nicaragua,Panama,Paraguay,Peru,TrinidadandTobago,Uruguay,Venezuelaandothercountriesandterritories.4Eurasia–Armenia,Azerbaijan,Georgia,Kazakhstan,Kyrgyzstan,RussianFederation,Tajikistan,TurkmenistanandUzbekistan.Europe–Albania,Austria,Belarus,Belgium,BosniaandHerzegovina,Bulgaria,Croatia,Cyprus,5,6CzechRepublic,Denmark,Estonia,Finland,theFormerYugoslavRepublicofNorthMacedonia,France,Germany,Gibraltar,Greece,Hungary,Iceland,Ireland,Italy,Kosovo,7Latvia,Lithuania,Luxembourg,Malta,theRepublicofMoldova,Montenegro,Netherlands,Norway,Poland,Portugal,Romania,Serbia,SlovakRepublic,Slovenia,Spain,Sweden,Switzerland,RepublicofTürkiye,UkraineandUnitedKingdom.EuropeanUnion–Austria,Belgium,Bulgaria,Croatia,Cyprus,5,6CzechRepublic,Denmark,Estonia,Finland,France,Germany,Greece,Hungary,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,Netherlands,Poland,Portugal,Romania,theSlovakRepublic,Slovenia,SpainandSweden.MiddleEast–Bahrain,theIslamicRepublicofIran,Iraq,Israel,8Jordan,Kuwait,Lebanon,Oman,Qatar,SaudiArabia,theSyrianArabRepublic,theUnitedArabEmiratesandYemen.NorthAfrica–Algeria,Egypt,Libya,MoroccoandTunisia.NorthAmerica–Canada,MexicoandtheUnitedStates.1Individualdataarenotavailableandareestimatedinaggregatefor:BurkinaFaso,Burundi,CapeVerde,CentralAfricanRepublic,Chad,Comoros,Djibouti,EquatorialGuinea,Gambia,Guinea,Guinea-Bissau,Lesotho,Liberia,Madagascar,Malawi,Mali,Mauritania,Mauritius,Niger,Reunion,Rwanda,SaoTomeandPrincipe,Seychelles,SierraLeone,Somalia,SwazilandandUganda.2IncludingHongKong.3Individualdataarenotavailableandareestimatedinaggregatefor:Afghanistan,Bhutan,CookIslands,Fiji,FrenchPolynesia,Kiribati,theLaoPeople’sDemocraticRepublic,Macau(China),Maldives,NewCaledonia,Palau,PapuaNewGuinea,Samoa,SolomonIslands,Timor-Leste,TongaandVanuatu.4Individualdataarenotavailableandareestimatedinaggregatefor:AntiguaandBarbuda,Aruba,Bahamas,Barbados,Belize,Bermuda,BritishVirginIslands,CaymanIslands,Dominica,FalklandIslands(Malvinas),FrenchGuyana,Grenada,Guadeloupe,Guyana,Martinique,Montserrat,St.KittsandNevis,StLucia,St.VincentandtheGrenadines,SurinameandTurksandCaicosIslands.5NotebytheRepublicofTürkiye.Theinformationinthisdocumentwithreferenceto“Cyprus”relatestothesouthernpartoftheIsland.ThereisnosingleauthorityrepresentingbothTurkishandGreekCypriotpeopleontheIsland.TheRepublicofTürkiyerecognisestheTurkishRepublicofNorthernCyprus(TRNC).UntilalastingandequitablesolutionisfoundwithinthecontextoftheUnitedNations,TheRepublicofTürkiyeshallpreserveitspositionconcerningthe“Cyprusissue”.6.NotebyalltheEuropeanUnionMemberStatesoftheOECDandtheEuropeanUnionTheRepublicofCyprusisrecognisedbyallmembersoftheUnitedNationswiththeexceptionofTürkiye.TheinformationinthisdocumentrelatestotheareaundertheeffectivecontroloftheGovernmentoftheRepublicofCyprus.7Thedesignationiswithoutprejudicetopositionsonstatus,andisinlinewiththeUnitedNationsSecurityCouncilResolution1244/99andtheAdvisoryOpinionoftheInternationalCourtofJusticeonKosovo’sdeclarationofIndependence.8ThestatisticaldataforIsraelaresuppliedbyandundertheresponsibilityoftherelevantIsraeliauthorities.TheuseofsuchdatabytheOECDand/ortheIEAiswithoutprejudicetothestatusoftheGolanHeights,EastJerusalemandIsraelisettlementsintheWestBankunderthetermsofinternationallaw.GasMarketReportQ1-2023PAGE66AnnexIEA.CCBY4.0.AbbreviationsandacronymsACERAgencyfortheCooperationofEnergyRegulators(EuropeanUnion)ANPNationalPetroleumAgency(Brazil)AUDAustraliandollarBMCColombianMercantileExchange(Colombia)CMEChicagoMercantileExchange(UnitedStates)CNENationalEnergyCommission(Chile)CNGcompressednaturalgasCQPGXChongqingPetroleumExchange(thePeople’sRepublicofChina)DUCdrilledbutuncompletedwellsEIAEnergyInformationAdministration(UnitedStates)EMAEnergyMarketAuthority(Singapore)ENARGASNationalGasRegulatoryEntity(Argentina)ENTSOGEuropeanNetworkofTransmissionSystemOperatorsforGasEPIASEnergyMarketsOperationsInc.(theRepublicofTürkiye)EPPOEnergyPolicyandPlanningOffice(Thailand)EUEuropeanUnionEUREuroFIDfinalinvestmentdecisionGIEGasInfrastructureEuropeGTSOUGasTransmissionSystemOperatorofUkraine(Ukraine)GXGreenTransformationprogramme(Japan)HHHenryHubIEAInternationalEnergyAgencyICEInterContinentalExchangeICISIndependentChemicalInformationServicesJKMJapanKoreaMarkerJODIJointOilDataInitiativeJOGMECJapanOrganizationforMetalsandEnergySecurity(Japan)JPYJapaneseyenKEEIKoreaEnergyEconomicsInstitute(Korea)LNGliquefiednaturalgasMCMMarketCorrectionMechanism(EuropeanUnion)METIMinistryofEconomy,TradeandIndustry(Japan)MMEMinistryofMinesandEnergy(Brazil)NBPNationalBalancingPoint(UnitedKingdom)NDRCNationalDevelopmentandReformCommission(thePeople’sRepublicofChina)OECDOrganisationforEconomicCo-operationandDevelopmentONSNationalElectricSystemOperator(Brazil)OSINERGEnergyRegulatoryCommission(Peru)OTCOverthecounterPPACPetroleumPlanningandAnalysisCell(India)SBLStrategicBufferLNG(Japan)TAPTransAdriaticPipelineTHETradingHubEurope(Germany)TTFTitleTransferFacility(theNetherlands)UKUnitedKingdomUSDUnitedStatesdollary-o-yyear-on-yearGasMarketReportQ1-2023PAGE67AnnexIEA.CCBY4.0.Unitsofmeasurebcfbillioncubicfeetbcf/dbillioncubicfeetperdaybcmbillioncubicmetresbcm/ybillioncubicmetresperyearGJgigajouleGWgigawattkWhkilowatthourMBtumillionBritishthermalunitsMtmilliontonneMWhmegawatthourTWhterawatthourGasMarketReportQ1-2023PAGE68AnnexIEA.CCBY4.0.Acknowledgements,contributorsandcreditsThispublicationhasbeenpreparedbytheGas,CoalandPowerMarketsDivision(GCP)oftheInternationalEnergyAgency(IEA).Theanalysiswasledandco-ordinatedbyJean-BaptisteDubreuil,SeniorNaturalGasAnalyst.LouisChambeau,Jean-BaptisteDubreuil,CaroleEtienne,TetsuroHattori,AkosLósz,GergelyMolnárandJinseokRho.KeisukeSadamori,DirectoroftheIEAEnergyMarketsandSecurity(EMS)Directorateprovidedexpertguidanceandadvice.TimelyandcomprehensivedatafromtheEnergyDataCentrewerefundamentaltothereport.TheIEACommunicationandDigitalOffice(CDO)providedproductionandlaunchsupport.ParticularthankstoJadMouawadandhisteam:PoeliBojorquez,AstridDumond,OliverJoy,IsabelleNonain-Semelin,CharnerRamseyandThereseWalsh.JustinFrench-Brookseditedthereport.ThereportwasmadepossiblebyassistancefromSKE&SandTokyoGas.Theindividualsandorganisationsthatcontributedtothisreportarenotresponsibleforanyopinionorjudgementitcontains.AnyerrororomissionisthesoleresponsibilityoftheIEA.Forquestionsandcomments,pleasecontactGCP(gcp@iea.org).AnnexInternationalEnergyAgency(IEA)ThisworkreflectstheviewsoftheIEASecretariatbutdoesnotnecessarilyreflectthoseoftheIEA’sindividualmembercountriesorofanyparticularfunderorcollaborator.Theworkdoesnotconstituteprofessionaladviceonanyspecificissueorsituation.TheIEAmakesnorepresentationorwarranty,expressorimplied,inrespectofthework’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thework.SubjecttotheIEA’sNoticeforCC-licencedContent,thisworkislicencedunderaCreativeCommonsAttribution4.0InternationalLicence.Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Unlessotherwiseindicated,allmaterialpresentedinfiguresandtablesisderivedfromIEAdataandanalysis.IEAPublicationsInternationalEnergyAgencyWebsite:www.iea.orgContactinformation:www.iea.org/about/contactTypesetinFrancebytheIEA–February2023Coverdesign:IEAPhotocredits:©GettyImages

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