Following the supply shock of 2022/23, natural gas markets returned to more pronounced growth in 2024. This forecast expects global gas demand to reach new all-time highs in 2024 and 2025. However, the global gas balance remains fragile as limited growth in LNG production is keeping supply tight, while geopolitical tensions continued to cause price volatility. Markets remain sensitive to unexpected supply or demand side movements. LNG shipping constraints emerged across the Panama Canal and the Red Sea in 2024. While this did not lead to a decline in LNG supply, it highlights the potential vulnerabilities of LNG trade in an increasingly interconnected global gas market. Responsible producers and consumers will need to work together to reinforce the architecture for secure global gas supplies amid mounting geopolitical tensions. Flexibility mechanisms along gas and LNG value chains could be enhanced by improving the liquidity of the global LNG market, integrating the Ukrainian gas storage system into the global gas market and considering potential frameworks for voluntary gas reserve mechanisms.

Preliminary data suggest that natural gas consumption increased by 2.8% year-on-year (y-o-y) in the first three quarters of 2024 (Q1-Q3 2024) – well above the 2% average growth rate between 2010 and 2020. The fast-growing markets of Asia accounted for the majority of this growth. First estimates indicate that growth in natural gas demand slowed to below 2% in Q3 2024 in the markets covered in this report.1 In part, the easing reflects the gradual recovery in demand, which was already underway in the second half of 2023. Higher gas prices also contributed to slower demand growth in Q3 2024.

For the full year of 2024, global gas demand is forecast to grow by more than 2.5% (or just over 100 bcm) and reach a new all-time high of 4 200 bcm. The Asia Pacific region is expected to account for almost 45% of incremental global gas demand. Industry and energy own use is emerging as the primary driver behind stronger gas use and is projected to contribute more than half of demand growth. This is partly supported by the continued economic expansion in fast-growing Asian markets. The recovery in Europe’s industrial gas demand is also contributing even though it remains well below its pre-crisis levels. Global gas demand is forecast to increase by another 2.3% (or nearly 100 bcm) in 2025. Similarly to 2024, this growth is largely supported by Asia, which alone is expected to account for over half of incremental gas demand.

Global LNG supply growth remained weak in Q1-Q3 2024, increasing by a mere 2% (or 7 bcm) y-o-y. This is well-below its 8% average annual growth rate between 2016 and 2020. Project delays together with feedgas supply issues at certain legacy producers (including in Angola, Egypt, Trinidad and Tobago) weighed on LNG production growth. The expected start-ups of the Plaquemines LNG export terminal in the United States and Tortue FLNG off the coast of West Africa are expected to improve LNG supply availability in Q4 2024. For the full year of 2024, global LNG supply is expected to grow by 2% (or 10 bcm) – its slowest growth rate since 2020.

LNG supply growth is set to accelerate to near 6% (or 30 bcm) in 2025 as several large LNG projects come online. North America is expected to account for about 85% of global incremental LNG supply in 2025, with nearly three-quarters (16 bcm) of these North American volumes coming from the United States. Africa and Asia are also expected to contribute to LNG supply growth in 2025. Russia’s Arctic LNG 2 project is not considered as a source of firm LNG supply in the current forecast, considering the broader sanctions environment.

The future of Russian gas transit via Ukraine is a key uncertainty ahead of the 2024/25 winter, as Russia’s gas transit contract with Ukraine expires at the end of 2024. This forecast assumes no Russian piped gas deliveries via Ukraine to Europe from January 2025. Our assessment indicates that the halt of Ukrainian transit would not pose an immediate supply security risk to Austria, Hungary and Slovakia considering their ample storage capacity, midstream interconnectivity and indirect access to the global LNG market. The vulnerability of Moldova is significantly greater and would require a close cooperation between Moldova and regional and international partners to ensure energy supply security over the winter season. An end to Ukrainian transit would reduce Russian piped gas supplies to Europe by around 15 bcm compared to 2024. This in turn could require higher LNG imports for Europe in 2025 and consequently lead to a tighter global gas balance. 

Since Russia's full-scale invasion of Ukraine, over 150 bcm per year of LNG liquefaction capacity has been approved. The United States alone accounted for 75% of the liquefaction capacity approved between 2022 and 2023. The strong momentum behind LNG project development continued in Q1-3 2024, with just over 45 bcm per year of LNG liquefaction capacity receiving approval, including Qatar’s North Field West project.

In contrast, no US LNG project has reached final investment decision (FID) since January 2024 following the introduction of a temporary pause on pending decisions for exports of LNG to countries that do not have free trade agreements with the United States. The Middle East was the driving force behind LNG project approvals globally in 2024, led by Qatar, the United Arab Emirates and Oman.

Together with Qatar’s expansion projects, LNG liquefaction plants that have reached financial investment decision or are under construction would add over 270 bcm per year of export capacity by the end of 2030. This strong increase in LNG production capacity could loosen market fundamentals and ease gas supply security concerns in the second half of the decade.

LNG contracting activity since 2023 has displayed a trend towards long-term, destination-fixed contracts. Agreements with a duration of at least 10 years have accounted for 85% of the volumes contracted since the start of 2023. Destination-fixed agreements have regained traction and accounted for more than 70% of volumes contracted since 2023. Large contracts (over 4 bcm per year) accounted for 57% of contracted volumes in 2023, the largest share since 2017. Their share declined to 39% in 2024 but remained well above its five-year average. The gas supply shock of 2022/23 and consequent volatility may have reminded both buyers and sellers of the importance of long-term contracts to secure a stable supply and reduce short-term price variability.

Despite the return to more traditional features in LNG contracting since 2023, the global LNG market is expected to gain in terms of depth and liquidity over the medium term. The share of destination-free contracts is expected to increase to 51% by 2027, amid the gradual expiry of destination-fixed legacy contracts and the entrance into force of new destination-flexible agreements. In addition to traditional suppliers, the role of portfolio players is set to further increase. Based on existing contracts, the share of portfolio players’ procurement contracts in total LNG contracts in force is set to rise from 41% in 2023 to nearly 45% by 2027. Pricing terms are becoming more diverse. Based on existing contracts, the share of oil-indexed contracts is expected to shrink from 56% in 2023 to 52% by 2027 amid the growing role of gas-to-gas indexation and hybrid pricing formulae. 

Low-emissions gases can play an important role in the decarbonisation of long-haul, heavy-duty transport, where electrification so far has made slower progress compared with light-duty vehicles. The transport sector is expected to be a key driver behind incremental demand over the medium term. This year’s Global Gas Security Review provides a special focus on the use of low-emissions gases in the transport sector.