Global gas demand is forecast to grow by 2.5 percent, or just over 100 bcm, in 2024. This growth, according to the Gas Market Report, Q3 2024 released by the International Energy Agency (IEA), is primarily driven by fast-growing Asian markets.Â
However, the paper notes that global gas demand growth is expected to fall below 2 percent year-over-year in the second half of 2024. This easing reflects the gradual recovery in demand, which was already underway in the second half of 2023.
Impact of limited LNG supply on import markets
The IEA expects the limited increase in global LNG supply to restrain growth in import markets. Industry is emerging as the most important driving force behind global demand, as gas use in the power sector is forecast to increase only marginally. This is because growth in fast-growing Asian markets and gas-rich countries in Africa, the Middle East, and North America is expected to be partially offset by declines in Europe.
Strong demand growth in H1 2024
Preliminary data suggests that global natural gas demand increased by 3 percent in the first half of 2024, with 70 percent of this demand growth concentrated in the first quarter. However, LNG supply declined year-on-year in the second quarter, creating upward pressure on gas prices across key import markets, which in turn weighed on demand growth.
Asia leads the charge
Asia accounted for around 60 percent of the increase in global gas demand in the first half of 2024, with demand in both China and India increasing by just over 10 percent year-over-year. Higher gas use in industry contributed to almost 65 percent of global demand growth in the first half of 2024, primarily supported by the economic expansion of fast-growing Asian markets.
Demand growth in other regions
Gas demand in the residential and commercial sectors grew by 1 percent year-over-year amid unseasonably warm temperatures in the first quarter. Combined gas demand in the gas-rich markets of Africa and the Middle East is forecast to increase by 3 percent, while Eurasian gas demand is projected to grow by 3 percent amid higher demand in industry and the residential and commercial sectors.
Outlook for LNG supply growth
The study notes that year-on-year growth in LNG supply is expected to accelerate during the second half of 2024, with new liquefaction capacity coming online. The United States is set to provide the majority of new export capacity this year as existing plants expand and new plants start operating.
