The International Gas Union (IGU) has recently released its 2024 Global Wholesale Gas Price Survey report, providing valuable insights into the current state of the global gas market. The survey reveals significant trends and developments that shape the industry.
One notable finding is the increase in spot liquefied natural gas (LNG) imports, which rose to 38% in 2023, indicating a growing trend in the global gas market. The rise of spot LNG imports can be attributed to the rebound in demand from China and the increased importation of spot LNG into Europe. Gas-on-Gas (GOG) pricing also experienced growth, reaching just under 50% of LNG imports. This suggests that the global gas market is maturing and becoming more flexible.
In terms of pricing mechanisms, the survey shows that Oil Price Escalation (OPE) accounted for 36% of globally imported GOG priced gas via LNG and pipeline, while the remaining 7% was priced through bilateral direct agreements between large buyers and sellers (BIM). These pricing mechanisms contribute to the diverse range of price formations across regions.
Europe continues to have the highest gas prices globally, with an average price of $15.83 per MMBTU in 2023. However, the global average price decreased to $5.70 per MMBTU from $9.48 in 2022. Despite the decline, this was still the second-highest average price recorded since 2005. Regional differences in gas prices persist, with Asia Pacific averaging $11.56 and Asia at $9.16. Notably, North America had prices below the average for Latin America, Africa, the Former Soviet Union, and the Middle East.
In recent years, Asia has witnessed stronger presence and pricing competitiveness in the gas market, especially with the influx of LNG. GOG pricing has played a more significant role in Asian markets, which has shifted gradually from non-market regulated pricing to market-based pricing. Asia’s growing consumption and evolving market dynamics make it a vital player in the future of the global gas market.
The IGU Wholesale Gas Price Survey report has become a crucial resource for understanding the evolution of gas markets, changes in price mechanisms, and wholesale gas prices globally. With data covering 98% of total world natural gas consumption, the report offers valuable insights into the industry.
As the world continues to face energy crises and geopolitical risks, the maturing and growing flexibility of the global gas market become crucial for energy security and the reliability of global energy systems. The IGU plays a pivotal role in representing the global gas industry, organizing leading international gas events, and supporting the industry’s growth and development.
In addition to the information provided in the article, there are several other key facts, trends, and challenges associated with the evolving global gas market:
1. Increasing Demand for Natural Gas: The demand for natural gas is expected to continue growing in the coming years, driven by factors such as population growth, economic development, and the transition towards cleaner energy sources. Growing demand from emerging economies, especially in Asia, is likely to play a significant role in shaping the global gas market.
2. Shale Gas Revolution: The advancement in shale gas extraction techniques, particularly in the United States, has led to a significant increase in gas production. This has contributed to a shift in global gas supply dynamics, with the U.S. becoming a major exporter of liquefied natural gas (LNG).
3. Renewable Energy Competition: The increasing adoption of renewable energy sources, such as solar and wind power, poses a challenge to the growth of the gas market. As countries strive to reduce carbon emissions and meet climate targets, there is a growing focus on renewables, which could potentially impact the demand for natural gas.
4. Geopolitical Considerations: The global gas market is influenced by geopolitical factors, including trade disputes, political tensions, and sanctions. These factors can disrupt gas supplies and impact prices, creating volatility in the market.
5. Infrastructure Development: The development of infrastructure, including pipelines and liquefaction plants, is crucial for the growth of the global gas market. Infrastructure constraints, such as limited pipeline networks and inadequate LNG regasification and storage facilities, can hinder the market’s expansion.
6. Environmental Concerns: Despite being a cleaner fossil fuel compared to coal and oil, natural gas still contributes to greenhouse gas emissions. The environmental impact of gas extraction, particularly related to methane leakage, is a topic of concern and can influence the public perception and regulatory framework for the industry.
7. LNG as a Transport Fuel: There is a growing interest in using LNG as a fuel for transportation, particularly in the maritime sector. LNG offers potential environmental benefits compared to traditional marine fuels, leading to increased adoption of LNG bunkering infrastructure and vessels.
Forecasting the future of the global gas market is challenging due to the interplay of various factors. However, the trends suggest that the demand for natural gas will continue to grow, driven by emerging economies and increasing environmental concerns. Key challenges include competition from renewable energy sources, geopolitical risks, and infrastructure limitations.
For more information on the evolving global gas market, you can refer to the following links:
1. International Gas Union (IGU) – The official website of the IGU, which provides information on the global gas industry, events, and publications.
2. U.S. Energy Information Administration (EIA) – The EIA provides data, analysis, and forecasts on energy-related topics, including natural gas, for both the U.S. and international markets.
3. BP Statistical Review of World Energy – This annual publication from BP provides comprehensive data and analysis on global energy markets, including natural gas.
4. U.S. Department of Energy – LNG Reports – The U.S. Department of Energy provides various reports and analyses on liquefied natural gas, including global market trends and forecasts.
These resources can provide further insights into the trends, forecasts, and challenges associated with the evolving global gas market.