IEA: GlobalGasSecurityReview2023

Global Gas Security
Review 2023
Including the Gas Market Report, Q3-2023
INTERNATIONAL ENERGY AGENCY
The IEA examines the full spectrum of energy IEA member countries: Spain
issues including oil, gas and coal supply and
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energy, demand side management and much Belgium Republic of Türkiye
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name of any territory, city or area.
Italy China
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Mexico Morocco
Netherlands Senegal
New Zealand Singapore
Norway South Africa
Poland Thailand
Source: IEA.
Portugal Ukraine
International Energy Agency
Website: www.iea.org Slovak Republic
Global Gas Security Review 2023 Abstract
Abstract
Russia’s invasion of Ukraine in 2022 triggered the first truly global The Global Gas Security Review has provided a thorough
gas crisis, with natural gas and LNG markets contending with assessment of the evolution of gas supply security and LNG
supply disruptions and unprecedented price volatility. While the contracting trends each year since its first publication in 2016. This
immediate effects of last year's supply shock have eased in recent year’s edition includes the latest insights of the IEA’s quarterly Gas
months, the structural changes that emerged in 2022 will persist for Market Report, as well as a special spotlight on natural gas storage
years – and should be taken into account both by policy makers and and evolving regulatory frameworks, taking into account the
market players. increased need for supply flexibility.
In this context, the architecture of global gas supply security and the Beyond the growing complexity of gas supply security both in the
underlying flexibility of the market need to be carefully reassessed short and long term, the decarbonisation of gas and the broader
through an ever-closer dialogue between responsible producers energy system will require the deployment and scaling up of low-
and consumers. Ensuring secure supplies of LNG, in particular, will emission gases. Part of the IEA’s Low-Emission Gases Work
require policy makers, in close coordination with private actors, to Programme, this year’s Review includes a special section on this
facilitate the development of innovative commercial offerings, novel topic, with a focus on the storage of low-emissions gases and the
procurement mechanisms and new co-operative frameworks. future role of liquefied low-emissions gases in the international
maritime sector.
Since its establishment in October 2022, the International Energy
Agency’s (IEA) Task Force on Gas and Clean Fuels Market
Monitoring and Supply and Security has provided key market
updates and a platform for the effective exchange of data and
information among members. The Task Force has worked closely
with the government of Japan ahead of the 12th LNG Producer-
Consumer Conference on 18 July 2023, co-organised by the IEA
and Japan’s Ministry of Economy, Trade and Industry (METI).
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Global Gas Security Review 2023 Table of contents
Table of contents
Executive Summary - Towards a New Global Gas Market.......................7 European gas demand dropped by over 10% in the first half of 2023 . 27
A new global gas market is taking shape in the aftermath of the 2022 Lower gas burn in OECD Europe’s power sector was the main driver
supply shock ........................................................................................... 8 behind reduced gas demand in Q2 2023 ............................................. 28
Natural gas markets moved towards a gradual rebalancing in H1 2023 9 Asian gas demand is expected to recover by 3% in 2023, supported by
Demand reductions played a key role in the softening of market lower prices .......................................................................................... 29
fundamentals ........................................................................................10 China and emerging Asia returned to demand growth in the first half of
Softer market conditions in H1 2023 are no reason for complacency 2023 ...................................................................................................... 31
ahead of winter .....................................................................................11 US natural gas production continues to expand in 2023, principally
driven by higher gas output from shale plays ....................................... 32
Risks and uncertainties remain ahead of the 2023/24 northern
hemisphere winter.................................................................................12 US natural gas production rose to above the 100 bcf/d mark in the first
Full storage sites are no guarantee against winter volatility and the risk half of 2023 ........................................................................................... 33
of renewed market tensions ..................................................................13 A new baseload: LNG accounted for close to 40% of Europe’s gas
The 2022 gas supply shock transformed natural gas markets in a consumption in H1 2023 ....................................................................... 34
structural manner ..................................................................................14 LNG continued to substitute Russian piped gas in Europe’s supply mix
in H1 2023 ............................................................................................ 35
LNG became a new baseload supply for the European market ...........15
Global LNG trade grew by 3% in first half of 2023, primarily supported
China’s active contracting strategy is set to reinforce its position in LNG
by the United States ............................................................................. 36
trading and future optimisation of global LNG flows .............................18
The United States is expected to become the world’s largest LNG
Gas market update and short-term forecast ...........................................19
supplier in 2023 .................................................................................... 39
Global gas demand is expected to remain broadly flat in 2023 before
Global LNG market growth is expected to moderate to 4% in 2024 .... 40
returning to moderate growth in 2024 ...................................................20
The Asia Pacific region is expected to account for over 80% of demand Asian spot LNG and European hub prices fell to a two-year low in Q2
growth in 2023-2024 .............................................................................21 2023 ...................................................................................................... 41
Asian spot LNG prices are expected to trade above TTF during the
North American natural gas demand is expected to decline in 2023 and
second half of 2023 .............................................................................. 42
remain flat in 2024 ................................................................................22
Gas storage levels remained well above their historic average in Q2
US gas consumption fell by over 0.5% in H1 2023 amid an
2023 ...................................................................................................... 43
unseasonably mild winter and subdued economic activity ...................23
Healthy hydro availability weighs on natural gas demand in Central and EU and US storage sites closed Q2 2023 with 77% and 64% fill levels,
South America ......................................................................................24 respectively ........................................................................................... 44
LNG contracting and flexibility update.................................................... 45
Lower gas consumption in Argentina and Brazil depressed gas demand
in Central and South America in Q1 2023 ............................................25 Update on LNG contracting trends ....................................................... 46
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Flexible LNG played a key role in maintaining gas supply security in Spotlight on natural gas storage ............................................................. 64
Europe in 2022......................................................................................47
The 2022 gas supply shock put natural gas storage in the spotlight ... 65
Close to 90 bcm/yr of LNG liquefaction capacity sanctioned since Key natural gas storage policies and regulations initiated since
Russia’s invasion of Ukraine .................................................................48 February 2022 ...................................................................................... 66
The United States alone accounted for 90% of the LNG FIDs
Global natural gas and LNG storage capacity is set to expand by 10%
sanctioned in 2022-H1 2023 .................................................................49
in the next five years............................................................................. 67
North America remained the largest source of new LNG export
China alone is expected to account for half of UGS capacity additions
contracts in 2022...................................................................................50
by 2028 ................................................................................................. 68
Portfolio players and Asian buyers continue to lead LNG contracting The European Union and its member states introduced mandatory fill
activity on the import side .....................................................................52 targets in 2022 ...................................................................................... 69
Long-term agreements continue to dominate
The EU’s new storage regulation sets a UGS fill target level of 90% by
the contracting landscape .....................................................................53
1 November .......................................................................................... 70
Destination-flexible contracts accounted for half of the volumes
Japan is set to introduce the Strategic Buffer LNG ahead of the
contracted in 2022 ................................................................................54
2023/24 winter season ......................................................................... 71
Portfolio players: Key enablers of market flexibility and liquidity ..........55 The Strategic Buffer LNG provides a new LNG security framework with
Portfolio players’ net open position is set to widen further over the close co-operation from the private sector ........................................... 72
medium term .........................................................................................56
Australia implemented the East Coast Gas System Framework in May
LNG portfolio players’ contractual position and contracted ratio, 2018- 2023 ...................................................................................................... 73
2026 ......................................................................................................56 Storage is a key contributor to supply flexibility during the southern
Contracted volumes are set to increase marginally over the medium hemisphere winter ................................................................................ 74
term .......................................................................................................57 Annex: Natural gas storage capacity and regulatory frameworks in
North America is set to become the world’s largest source of active selected markets* ................................................................................. 75
LNG export contracts ............................................................................58
System integration of low-emission gases ............................................. 80
Destination-flexible contracts and uncontracted capacity expand over
Low-emission gases play a key role in the pathways to net zero
the medium term ...................................................................................59
emissions by 2050 ................................................................................ 81
Contract expiry creates new marketing opportunities in the medium
Low-emission gases naturally lead to a more complex gas system .... 82
term .......................................................................................................60
Underground storage plays a critical role in unleashing biomethane’s
Around 150 bcm of LNG contracts are set to expire by 2026 and over
full potential .......................................................................................... 83
250 bcm by 2030 ..................................................................................61
Biomethane production plants display limited short-term variability and
On the export side, North America is driving growth in the number of
seasonality ............................................................................................ 84
gas-to-gas indexed contracts ................................................................62
The first open seasons for hydrogen storage were launched in Europe
Oil-linked pricing remains dominant in import contracts .......................63
in 2023 .................................................................................................. 85
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European hydrogen storage development will require stakeholders to

make concentrated efforts ....................................................................86
Liquefied low-emission gases are expected to be central to
decarbonising the maritime sector ........................................................87
Annex ..........................................................................................................92
Summary table ......................................................................................93
Regional and country groupings ...........................................................94
Abbreviations and acronyms ................................................................95
Units of measure ...................................................................................96
Acknowledgements, contributors and credits .......................................97
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Global Gas Security Review 2023 Executive summary – Towards a New Global Gas Market
Executive summary – Towards a New Global Gas Market
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A new global gas market is taking shape in the aftermath of the 2022 supply shock
The global energy crisis triggered by Russia’s invasion of Ukraine the medium term, a fine balance should be struck between long-
transformed natural gas markets in a structural manner with term contracts from non-Russian suppliers and exposure to an
profound implications both for policy makers and market players. increasingly liquid spot market. Our review of LNG contracting
LNG became a new baseload supply for Europe, while China’s trends indicates that European buyers have increased their LNG
balancing role in the global gas market is set to increase. In this contracting activity since Russia’s invasion of Ukraine, though they
context, the architecture of global gas supply security and the still account for just 20% of total LNG volumes contracted since the
underlying flexibility mechanisms need to be reassessed through an start of 2022 – while China’s share topped 25%.
ever-closer dialogue between responsible producers and
Considering that in an increasingly globalised gas market, storage
consumers.
regulations can have extra-regional implications, the International
Global gas supply security remains at the forefront of energy Energy Agency carried out a survey on natural gas storage and its
policymaking, with growing complexity both in the short- and long evolving regulatory frameworks across the members of the
term. While market fundamentals have significantly eased since the International Energy Agency's Task Force on Gas and Clean Fuels
start of 2023, and the European Union is well on track to fill up its Market Monitoring and Supply and Security. It showed that in the
storage sites to 95% of working capacity, full storage sites are no wake of the global gas crisis triggered by Russia, more stringent
guarantee against winter volatility. Our simulations show that a storage regulations have been adopted across key markets.
cold winter, together with a full halt of Russian piped gas supplies to
The integration of low-emission gases into the gas and broader
the European Union starting from 1 October 2023, could easily
energy system will be crucial to decarbonise gas supply streams.
renew price volatility and market tensions.
This year’s Global Gas Security Review provides a special focus on
The growing flexibility and liquidity of the global LNG market the storage of low-emission gases and the future role of liquefied
was crucial in the response to the gas supply shock of 2022. low-emission gases in the international maritime sector.
The non-observance of Russian piped gas contracts increased the
European Union’s reliance on spot procurements, which rose from
just 20% of total gas supply in 2021 to over 50% in 2023. Through
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Natural gas markets moved towards a gradual rebalancing in H1 2023

Russia’s steep cuts in gas deliveries to the Europe Union – a non-Russian pipeline suppliers faced heavy maintenance and
drop of almost 80 bcm, equating to 15% of global LNG trade – put unplanned outages, further tightening supply.
unprecedented pressure on European and global gas markets in
In this context, natural gas demand reductions played a key role
2022. This gas supply shock caused by Russia led to a
in the softening of market fundamentals. In OECD Europe,
reconfiguration of global LNG flows, drove natural gas prices to all-
natural gas demand fell by an estimated 10%, or over 30 bcm. This
time highs, both in Asia and Europe, and necessitated a
was primarily driven by lower residential and commercial demand in
readjustment in gas demand. Natural gas consumption fell by an
Q1, a sharp drop in gas use in the power sector during Q2 and
estimated 1.5% in 2022 – similar to the drop experienced in 2020
depressed gas consumption by industrial consumers. In key Asian
following the first wave of Covid-19 lockdowns.
markets, natural gas demand remained close to last year’s levels in
Since the start of 2023, natural gas markets moved towards a the first five months of 2023. While China returned to growth, these
gradual rebalancing due to timely policy action, efficient market gains were almost entirely offset by demand drops in Japan and
forces and favourable weather conditions over the 2022/23 heating Korea, reflecting a mild Q1 and improving nuclear availability.
season. Spot gas prices in Asia and Europe fell by over 50% year- Relatively muted demand in Asia has been a key contributor to the
on-year in H1 2023, albeit remaining 140% and 180% above their loosening of market fundamentals since the start of 2023.
H1 average levels between 2016-20, respectively. In the United
Global gas demand is expected to remain broadly flat in 2023
States, strong growth in domestic gas production, together with an
and return to moderate growth of 2% in 2024, supported by the
unseasonably mild Q1 2023, put downward pressure on benchmark
expansion of economic activity and assuming a return to average
Henry Hub prices, which fell by 60% year-on-year in H1 2023.
winter weather conditions in the Northern Hemisphere. The rapidly
The steep decline in natural gas prices in Asia and Europe growing markets in the Asia Pacific region are expected to account
occurred despite a tight supply environment. Russia’s piped gas for around 80% of incremental gas demand to the end of 2024. This
deliveries to the European Union fell by over 75% (or 36 bcm) in H1 short-term forecast is subject to an unusually wide range of
2023, while global LNG supply rose by an estimated 3% (or 9 bcm) uncertainties stemming from the broader geopolitical and
– insufficient to offset the decline in Russian piped supplies. Several macroeconomic environment.
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Demand reductions played a key role in the softening of market fundamentals

Year-on-year change in natural gas supply and demand in key Asian and European import markets, H1 2023 vs H1 2022
Natural gas supply Natural gas demand*
20
Y-o-y change in bcm
Y-o-y change in bcm

10
- 10
- 20
- 30
- 40
- 50
Supply Demand
Global LNG supply Domestic production in Europe and China India Japan & Korea
China - non-Russian piped imports China - Russian piped imports
China OECD Europe
Europe - non Russian piped imports Europe - Russian piped imports
Total y-o-y change Total y-o-y change
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*Natural gas demand includes change in net storage injections in Q2.
Sources: IEA analysis based on ENTSOG (2023), Transparency Platform; Eurostat (2023), Energy Statistics; Gas Transmission System Operator of Ukraine (2023), Transparency
Platform; General Administration of Customs of the People’s Republic of China (2023), Major Import Commodities in Quantity and Value; ICIS (2023), ICIS LNG Edge; JODI (2023),
Gas World Database; NBS (2023), Output of Natural Gas; PPAC (2023), Gas Consumption.
IEA. CC BY 4.0.
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Softer market conditions in H1 2023 are no reason for complacency ahead of winter
High natural gas inventory levels in key Asian and European LNG imports could fluctuate, with an uncertainty range of over 10
markets provide cautious optimism ahead of the 2023/24 heating bcm through the 2023/24 winter.
season in the Northern Hemisphere. However, full storage sites
Considering these risk factors, gas storage trajectories could
are no guarantee against winter volatility and the risk of
vary widely over the upcoming heating season. Our simulations
renewed market tensions.
show that a cold winter, together with a full stop of Russian piped
The European Union inherited relatively high storage levels gas supplies to the European Union starting from 1 October, could
after the 2022/23 heating season, with inventories standing 60% renew market tensions. If we assume a mild winter and LNG flows
above their five-year average. If injections continue at the average remaining close to last year’s levels, storage sites would end the
rate observed since mid-April, EU storage sites will reach 90% of heating season with inventory levels above 50% of capacity even
their working capacity by early August and could be filled close without Russian piped gas. In contrast, a cold winter would put
to 100% by mid-September. If Russian piped gas supplies were to substantial pressure on the market. Higher LNG flows (a 15% y-o-y
cease completely in summer 2023, the European Union would still increase) would keep storage sites 34% full by the end of March.
be able to fill up storage sites to 90-95% of working capacity on Yet if LNG flows remain at 2022/23 winter levels, storage sites
average by the start of the 2023/24 heating season. would be just 25% full. Lower LNG availability (a 10% y-o-y decline)
would further depress inventory levels to below 20% of capacity.
Nevertheless, key uncertainties remain ahead of Europe’s
2023/24 winter season. A cold winter could increase natural gas Storage sites are typically less reactive when filled below 30% of
demand in the EU’s residential and commercial sectors by 30 bcm their capacity, as withdrawal ability is reduced due to the drop in
compared to the 2022/23 heating season. Given geopolitical reservoir pressure. This could increase the risk of price volatility and
uncertainties, a further decline in Russian piped gas deliveries supply disruptions in the case of a late cold spell coupled with low
to the European Union cannot be excluded. If Russian piped gas wind power output. Continued structural gas demand reductions –
supplies were to fully stop from 1 October 2023, it would result in a including via enhanced energy efficiency, the more rapid
total shortfall of 10 bcm. Global LNG supply is expected to deployment of renewables and quicker installation of heat pumps –
increase by around 15 bcm y-o-y, though project delays and/or will be required to ensure a secure gas balance for the 2023/24
unplanned outages could reduce incremental LNG supply. China’s winter.
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Risks and uncertainties remain ahead of the 2023/24 Northern Hemisphere winter
Uncertainty ranges of key exogenous risks to the European and global gas balance for the 2023/24 heating season
Coldest winter
since 2009/10
120
100
Mildest winter
80 since 2009/10
Strong economic recovery
uncertainty ranges (bcm)
and cold winter prompts

higher LNG imports
60
40 Slower economic growth, Higher LNG supply

continued covid-lockdowns on improved feedgas
and mild weather keeps Russian piped flows to availability/methane savings
China's gas demand the EU continue at their
20 depressed current level
Lower LNG supply

on black swan
0 events
Russian piped flows
are completely cut
-20
-40
China's LNG imports Russian piped gas to the European Global LNG supply EU demand in the residential and
Union commercial sectors
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Note: Red indicates a tightening of the global/European gas balance. Blue indicates loosening of the gas balance.
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Full storage sites are no guarantee against winter volatility and the risk of renewed market
tensions
Potential EU gas storage trajectories without Russian piped gas under different scenarios during the 2023/24 winter season
100
bcm
90
80
70
60
50
40
30
20
10
0
Mild winter and Cold winter Cold winter Cold winter
static LNG supply and high LNG supply and static LNG supply and low LNG supply
October November December January February March Threshold for heightened

risk of supply disruptions
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The 2022 gas supply shock transformed natural gas markets in a structural manner
Russia's invasion of Ukraine profoundly transformed European and suggest that the European premium is expected to stay in the
global gas markets. While the immediate effects of last year's coming years, with TTF’s premium over Asian spot LNG prices
supply shock have eased in recent months, the structural changes averaging USD 0.3/MBtu through 2023-25.
which emerged in 2022 will persist for years – and should be
The European Union’s exposure to the spot market is set to
carefully assessed both by policy makers and market players.
increase if no long-term contracts are signed
LNG: a new baseload supply for the European market
Through the past two decades, long-term contracts, together
The steep decline in Russian piped gas deliveries to the European with domestic production, met around 80-90% of EU gas
Union – a drop of close to 120 bcm through 2022-23 – reconfigured demand on an annual basis. The non-observance of Russian piped
global LNG flows towards Europe. gas contracts steeply increased the European Union’s reliance on
spot procurements, rising from just 20% in 2021 to over 50% in
Consequently, the role of LNG in the European market
2023. The share of spot volumes is expected to increase to
drastically shifted. While in the past, LNG cargoes supplied the
more than 70% by 2030 – if expiring contracts are not renewed
marginal molecule, LNG is now acting as baseload, in a similar
and no new contracts are signed.
fashion as Norwegian or North African piped gas. The share of LNG
in the European Union’s gas demand rose from an average of 12% This will naturally increase Europe's exposure to the greater
over the 2010s to close to 35% in 2022 – a share similar to volatility of spot markets over the medium term. Hence, a fine
Russia’s piped gas before the invasion of Ukraine. balance should be struck between non-Russian long-term
contracts and procurements from an increasingly liquid spot market.
Europe has repositioned itself as the new premium LNG
A higher share of long-term contracts could potentially provide
market. TTF was trading at USD 6/MBtu above Asian spot LNG
greater price and supply stability. Natural gas producers and
prices in 2022. The price signal provided by TTF and other liquid
consumers should work closely together to reduce the emission
European hubs was crucial to attract the necessary volumes of
intensity of gas and LNG supply, in order to hedge against
flexible LNG to Europe. Forward curves at the end of June 2023
tightening emission regulations.
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LNG became a new baseload supply for the European market

The share of LNG and Russian piped gas in the European Union’s natural gas demand (2001-23)
50%
share in total EU gas demand (%)
40%
30%
20%
10%
0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Share of Russian piped gas Share of LNG
IEA. CC BY 4.0.
Platform; ICIS (2023), ICIS LNG Edge; IEA (2023), Natural Gas Information.
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Gas supply flexibility options need to be reassessed amid the China’s role as a balancing market is set to increase, with
phase-out of Russian piped gas imports into the European Union potential ripple effects for energy supply security and clean
energy transitions
Russian piped gas contracts included significant intra-annual
and inter-annual flexibility, with the nomination rights ultimately Prior to the 2022 gas supply shock, Europe played a key role in
lying with the buyers. This flexibility – underpinned by the country’s balancing the global gas market. This role was underpinned by
huge swing fields – played a key role in meeting short-term demand several unique features of the European market, including: 1)
variability and seasonal swings. This contributed to the balancing of flexible piped gas supply from Russia; 2) coal-to-gas switching
European and global gas markets. Overall, the inter-annual potential in the power sector; 3) spare LNG regasification capacity;
flexibility provided by Russian piped gas averaged close to 10 bcm 4) vast underground storage capacity; 5) open, non-discriminatory
on an annual basis through the 2010s. Intra-annual swings third-party access to natural gas infrastructure and 6) liquid, well-
averaged close to 200 mcm/d between 2016-21, amounting to over traded gas hubs.
10% of EU gas demand on a cold day.
Russia’s steep gas supply cuts in 2022 largely eroded Europe’s
This structurally lower gas supply flexibility means that other role as a balancing market. The unprecedented 20% drop in
flexibility options, such as storage and LNG peak-shaving and China’s LNG imports – reflecting lower spot procurements and
demand response, will have to play a greater role in coming exercising destination flexibility rights in long-term LNG contracts –
years. Based on projects currently in development, global natural was a key factor in enabling higher LNG shipments to the European
gas and LNG storage capacity in import markets is expected to market.
expand by 10% (or 45 bcm) during 2023-28. In addition, a closer
In contrast to Europe, China’s role as a balancing market is
dialogue between producers and consumers should facilitate the
expected to increase over the medium term, especially when
development of innovative commercial offerings, new
considering the country’s active role in securing LNG contracts.
procurement mechanisms and co-operation frameworks
China alone accounted for 30% of all LNG sales and purchase
favouring a more flexible supply of LNG. A prime example is the
agreements (SPAs) signed in the past five years. As a result,
coordination mechanism agreed between Japan and Thailand,
China’s share of active LNG contracts is expected to rise from 12%
building on seasonal differences in natural gas demand in the two
in 2021 to close to 25% by 2030. This is set to boost the role of
countries.
Chinese companies in LNG trading and the optimisation of global
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LNG flows. Nevertheless, China’s potential role as a balancing • The majority of China's LNG importers are state-owned
market will have ripple effects, both in terms of energy supply companies. Market-driven decision-making might be
security and energy transitions: overwritten by supply security concerns or geopolitical
considerations.
• China has limited underground storage capacity. At the
end of 2022, China’s working gas storage capacity was The medium- to long-term outlook for natural gas demand is
estimated at 18 bcm, accounting for just 5% of the country’s being revised downwards
annual consumption – well below the level in mature
markets. This contrasts with the European Union’s 100 bcm The global gas crisis triggered by Russia deeply damaged the
of working storage capacity (accounting for over 25% of medium- to long-term growth prospects for natural gas
demand. The sharp increase in natural gas prices reduced its
annual gas demand), although China relies to a larger extent
on its domestic production and portfolio of LNG contracts. competitiveness vis-à-vis other sources of energy supply, while its
image as a “reliable” fuel has been called into question by steep
• China does not have the same access to flexible piped supply cuts of Russian piped gas.
gas supplies that Europe had in the past. Central Asian
flows displayed often-negative seasonal swings due to cold Global gas demand growth for the period between 2020 and
spells during the winter seasons, while Russian deliveries via 2024 was reduced by 40% compared to projections prior to
the Power of Siberia pipeline system have limited flexibility in Russia’s invasion of Ukraine. The IEA’s Gas 2021 report projected
absolute terms. an increase of 350 bcm through 2020-24, which is revised down to
200 bcm in our latest forecast. Europe alone accounts for more than
• A key contributor to China’s gas demand flexibility is the half of this downward revision. This reflects more stringent energy
country’s significant gas-to-coal switching potential. In efficiency standards, the accelerated deployment of renewables and
2022, coal-fired generation rose by an estimated 1.9%, quicker electrification of heat, as well as a reduced role of natural
largely at the expense of gas-fired power plants, which gas in industry.
reduced their output by close to 10% y-o-y. This translated
into higher emissions (estimated at 15 Mt CO2-equivalent), The IEA’s World Energy Outlook 2023 edition and the Gas report
further putting tensions on clean energy transitions. Q4 2023 will provide an in-depth analysis of the medium- and long-
term prospects of natural gas and gaseous fuels.
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China’s active contracting strategy is set to reinforce its position in LNG trading and future
optimisation of global LNG flows
The share of China in active LNG contracts (2010-30)
900 25%
bcm
800
700 20%
600
15%
500
400
10%
300
200 5%
100
0 0%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Asia Pacific Portfolio Europe Other regions China share
IEA. CC BY 4.0.
Sources: IEA analysis based on ICIS (2023), ICIS LNG Edge.
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PAGE | 18
Global Gas Security Review 2023 Gas market update and short-term forecast
Gas market update and short-term forecast
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PAGE | 19
Global gas demand is expected to remain broadly flat in 2023 before returning to moderate
growth in 2024
Global gas consumption contracted by an estimated 1.5% y-o-y Global gas supply is set to remain tight in 2023, as incremental
(or 65 bcm) in 2022 – comparable to demand drops seen in 2009 LNG supply (20-25 bcm) will not be sufficient to offset the expected
in the aftermath of the financial crisis and during the global Covid-19 drop in Russia’s piped gas deliveries to Europe (a decline of over
pandemic in 2020. The bulk of the demand reduction was 40 bcm). While incremental gas supply is limited in 2023, it would
concentrated in key Asian and European import markets. All-time be enough to cover global gas demand assuming demand
high prices in these markets supported gas-to-coal switching in the remains broadly flat, as expected. Most demand growth is
power sector and depressed gas use in energy-intensive industries projected to be driven by the Asia Pacific region, the Middle East
(either via fuel-switching or production curtailments). and Africa; however, this growth is almost entirely offset by falling
demand in North America and Europe. After its first decline in four
Preliminary data indicate that this downward trend continued
decades, China’s natural gas demand is expected to expand by just
in H1 2023 across key gas markets. OECD Europe recorded the
over 6% in 2023. The country’s LNG imports are forecast to
steepest decline in natural gas consumption, with a drop of over
increase by close to 15%, albeit remaining below the record levels
10% (or more than 30 bcm) y-o-y in H1 2023. This was primarily
reached in 2021.
driven by depressed gas use in industry, lower residential and
commercial demand in Q1, and a sharp drop in gas burn in the Global gas demand is expected to return to moderate growth of 2%
power sector during Q2. In North America natural gas consumption in 2024, supported by the expansion of economic activity and
fell by an estimated 0.6% y-o-y (close to 5 bcm) amid unseasonably assuming a return to average winter weather conditions in the
mild weather conditions in Q1 and subdued economic activity. In Northern Hemisphere. Again, the bulk of demand growth is
Asia Pacific natural gas demand remained close to last year’s projected to be concentrated in Asia Pacific, accounting for around
levels in the first four months of 2023. While China and certain 80% of incremental gas demand to the end of 2024.
markets in emerging Asia returned to growth, these gains were
This short-term forecast is subject to an unusually wide range of
almost entirely offset by the demand drops in Japan and Korea,
uncertainties, stemming from the broader geopolitical and
reflecting a mild Q1 and improving nuclear availability.
macroeconomic environment.
IEA. CC BY 4.0.
PAGE | 20
The Asia Pacific region is expected to account for around 80% of demand growth in 2023-2024
Y-o-y change in global natural gas demand, 2020-2023
200 5%
Y-o-y change in bcm
Y-o-y change in %
160 4%
120 3%
80 2%
40 1%
0 0%
- 40 -1%
- 80 -2%
- 120 -3%
- 160 -4%
- 200 -5%
2020 2021 2022 2023 2024
Europe Asia Pacific North America Eurasia Middle East Africa Central and South America Y-o-y growth
IEA. CC BY 4.0.
IEA. CC BY 4.0.
PAGE | 21
North American natural gas demand is expected to decline in 2023 and remain flat in 2024
Natural gas consumption in North America fell by an estimated with a decline in natural gas prices increasing the competitiveness
0.6% (close to 5 bcm) y-o-y in the first half of 2023. Unseasonably of gas-fired power plants. Consequently, the share of gas-fired
mild weather conditions in Q1 together with subdued business power generation rose to above 39% in the first half of 2023, up
activity are weighing on natural gas demand. from 35% during the same period in 2022.
In the United States natural gas consumption dropped by just over Natural gas consumption in Canada dropped by an estimated 1% y-
0.5% y-o-y in the first half of 2023 according to preliminary data. o-y in the first half of 2023. This decrease can be attributed to the
This was largely driven by lower natural gas use in the residential reduction in demand from the residential and commercial sectors.
and commercial sectors as unseasonably mild weather conditions Gas demand continued to increase among wholesale customers,
put downward pressure on space heating requirements. Heating particularly in large industry and power generation, due to the
degree days during the January-April period were down by 8% y-o- ongoing transition from coal to gas in the power mix. Mexico’s
y, which decreased gas demand in the residential and commercial apparent natural gas consumption remained close to last year’s
sectors by more than 9% compared with the same period in 2022. levels in the first five months of 2023.
In January and February 2023, the United States saw its lowest
This forecast expects North American gas demand to remain
levels of natural gas consumption since 2018. In addition, the
broadly flat in 2023. In the United States slower economic growth is
industrial sector also recorded a 2% decrease in consumption in
set to depress gas demand in industry, while the unseasonably mild
H1 2023 amid subdued economic activity. The US Manufacturing
Q1 reduced gas use in the residential and commercial sectors,
Purchasing Managers’ Index (PMI), published by the Institute for
weighing on the outlook for the full year. The economic slowdown
Supply Management, averaged 47 over the first half of 2023,
together with the rapid expansion of renewables is set to moderate
indicating a contraction in manufacturing activity.
the growth in gas-fired generation during the second half of 2023.
In contrast, gas-to-power demand increased by 8% y-o-y in H1 North American gas consumption is expected to decline by 0.5% in
2023, amid lower hydropower output (down 6% y-o-y) and coal-to- 2024. Residential and commercial gas demand is projected to
gas switching in the power sector. Coal-fired generation declined by recover under the assumption of average weather conditions, while
25% y-o-y, largely in favour of gas-based power output. This can be the continued expansion of renewables is expected to reduce gas
attributed to the continuing retirement of coal power plants, coupled burn in the power sector.
IEA. CC BY 4.0.
PAGE | 22
US gas consumption fell by over 0.5% in H1 2023 amid an unseasonably mild winter and
subdued economic activity
Monthly natural gas consumption, Gas consumption by sector,

United States, 2022-2023 United States, H1 2023 vs H1 2022
120 2% 10%
Y-o-y change
bcf/d
8%
110 6%
0%
4%
100 2%
-2%
0%
90 -2%
-4% -4%
80
-6%
-6% -8%
70
-10%
Power generation
Other
Residential and
Industry
Total consumption
commercial
60 -8%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2022 2023 Y-o-y change (%)
IEA. CC BY 4.0.
Note: bcf/d = billion cubic feet per day.
Sources: IEA analysis based on EIA (2023), Natural Gas Consumption; Natural Gas Weekly Update.
IEA. CC BY 4.0.
PAGE | 23
Healthy hydro availability weighs on natural gas demand in Central and South America
Natural gas consumption in Central and South America declined by lower gas demand, Brazil reduced its piped gas imports from Bolivia
3% in 2022. This was primarily driven by lower gas demand in by 15% (or 0.5 bcm) y-o-y, while its LNG inflows dropped by 75%
Brazil, where gas-fired generation contracted by more than 60% (or 1.6 bcm) y-o-y in the first half of 2023.
compared with 2021, following a recovery in hydropower
Several other countries in the region experienced similar declines.
generation. The region’s gas demand continued to decline in Q1
In Trinidad and Tobago natural gas production remained broadly
2023, falling by over 5% (or close to 2 bcm) y-o-y amid healthy
flat in Q1 2023 compared with the same period in 2022. The
hydro availability.
country’s LNG exports rose by more than 8% y-o-y, suggesting that
In Argentina, the region’s largest gas market, gas demand declined domestic gas consumption declined by over 5% y-o-y in Q1 2023.
by 1% (or 0.15 bcm) y-o-y in the first four months of 2023 according In Venezuela observed gas consumption decreased by 13% (or
to preliminary data. Higher hydro generation exerted downward 0.8 bcm) y-o-y in the first four months of 2023. In Colombia gas
pressure on gas use in the power sector, which declined by close to demand declined by 5% (or 0.2 bcm) y-o-y in the first five months of
4% y-o-y. Gas demand in the residential and commercial sectors 2023, primarily driven by lower gas burn in the power sector (down
dropped by 12% y-o-y, while gas use in industry increased by close 27% y-o-y). The region’s smaller markets displayed varied demand
to 8% y-o-y. patterns over Q1 2023, not sufficient to offset the declines recorded
in the five largest gas markets.
In Brazil gas consumption continued its steady decline, falling by an
estimated 15% (or close to 2 bcm) y-o-y in the first five months of Taking into account the declines in Q1 and assuming average
2023, primarily driven by lower gas burn in the power sector. Gas- weather conditions for the remainder of the year, this forecast
fired power generation decreased by 37% (or 5 TWh) y-o-y in H1 expects natural gas demand in Central and South America to
2023, while hydro generation remained close to last year’s levels decline by almost 4% in 2023. Gas demand in 2024 is forecast to
during the same period. In Q2 2023 hydropower output declined by increase by close to 2% in 2024 amid economic growth and
3.5% y-o-y, which supported an increase in gas-fired power output, assuming average hydro generation levels.
albeit not sufficient to offset the losses in Q1. As a consequence of
IEA. CC BY 4.0.
PAGE | 24
Lower gas consumption in Argentina and Brazil depressed gas demand in Central and South
America in Q1 2023
Monthly natural gas consumption, Central and South America, 2022-Q1 2023
12
bcm
10
0
J F M A M J J A S O N D J F M
2022 2023
Argentina Brazil Venezuela Trinidad and Tobago Colombia Chile Peru Bolivia Other
IEA. CC BY 4.0.
Sources: IEA analysis based on ANP (2023), Boletim Mensal da Produção de Petróleo e Gás Natural; BMC (2023), Informes Mensuales; Central Bank of Trinidad and Tobago (2023),
Statistics; CNE (2023), Generación bruta SEN; ENARGAS (2023), Datos Abiertos; ICIS (2023), ICIS LNG Edge; IEA (2023), Monthly Gas Data Service; JODI (2023), Gas Database;
MME (2023), Boletim Mensal de Acompanhamento da Industria de Gás Natural; OSINERG (2023), Reporte diario de la operación de los sistemas de transporte de gas natural.
IEA. CC BY 4.0.
PAGE | 25
Healthy hydro availability depressed gas-fired generation in Brazil in H1 2023, leading to a

steep decline in LNG imports
Y-o-y change in quarterly hydropower and gas-fired electricity generation and LNG imports, Brazil, 2021-2023
30 5
Y-o-y change in LNG imports (bcm)

Y-o-y change in power generation (TWh)
4
20
3
2
10
1
0 0
-1
- 10
-2
-3
- 20
-4
Hydropower Gas-fired generation LNG imports
- 30 -5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2021 2022 2023
IEA. CC BY 4.0.
Sources: IEA analysis based on EPE (2023), Monthly Review of the Electricity Market; ICIS (2023), ICIS LNG Edge; ONS (2023), Power Generation.
IEA. CC BY 4.0.
PAGE | 26
European gas demand dropped by over 10% in the first half of 2023
Natural gas consumption in OECD Europe fell by more than 10% coal- and gas-fired power plants, which saw their combined output
(or over 30 bcm) y-o-y during H1 2023. The pace of demand declining by over 20% (or close to 55 TWh). Coal-based generation
reduction moderated from the 13% (or 22 bcm) drop experienced in declined more steeply, reflecting the deteriorating competitiveness
Q1 to a 10% (or 9 bcm) y-o-y decline during Q2. Lower gas burn in of coal-fired plants amid the sharp drop in gas prices and high cost
the power sector accounted for 70% of the overall reduction in gas of emission allowances. Estimated gas demand in industry stayed
demand in Q2, amid depressed electricity demand and stronger close to last year’s levels in Q2 2023. While the steep fall in gas
renewable power output. prices since mid-December 2022 supports gradually improving
activity in gas-intensive industries, industrial sector gas demand
Distribution network-related demand fell by an estimated 8% (or
remains 20% below its Q2 2021 levels.
2.5 bcm) y-o-y in Q2 2023. This decline occurred despite a colder
spring, with heating degree days in April and May standing 10% For 2023 as a whole, OECD Europe’s gas demand is forecast to
above their 2022 levels. Hence, non-weather-related factors explain decline by 7%. This is largely driven by lower gas burn in the power
the bulk of this demand reduction. These include gas-saving sector, down by 15% amid rapidly expanding renewables and lower
measures enacted in public buildings, fuel-switching in rural electricity consumption. Gas use in industry is expected to stay
households, the continued deployment of heat pumps, efficiency close to last year’s levels, as lower gas prices enable demand
gains and behavioural changes. Rising affordability issues are also recovery in the second half of the year, offsetting the losses in H1.
likely to have contributed to lower gas use in households. Considering the declines in the year to date, demand in the
residential and commercial sector is expected to fall by 4% in 2023.
Gas-to-power demand dropped by an estimated 20% (or 7 bcm) y-
In 2024, OECD’s Europe gas demand is forecast to increase by a
o-y in Q2 2023. This steep decline was driven by a combination of
moderate 1.5%, as the expected decline in gas for power
factors. Subdued activity in energy-intensive industries together with
generation is not offset by higher gas use in other sectors. A return
continued improvements in energy efficiency and behavioural
to average temperature conditions would increase residential and
changes depressed electricity consumption, which fell by around
commercial demand, while gas use in industry is expected to
7% (or 50 TWh) y-o-y in Q2. In addition, stronger renewable power
continue its gradual recovery, albeit remaining well below its pre-
output and improving nuclear availability further reduced the call on
crisis levels.
IEA. CC BY 4.0.
PAGE | 27
Lower gas burn in OECD Europe’s power sector was the main driver behind reduced gas
demand in Q2 2023
Estimated quarterly change in gas demand, OECD Europe, 2021-2023
35 25%
Y-o-y change in bcm
Y-o-y change in %
28 20%
21 15%
14 10%
7 5%
0 0%
-7 -5%
- 14 -10%
- 21 -15%
- 28 -20%
- 35 -25%
2021 2021 2021 2021 2022 2022 2022 2022 2023 2023
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Residential and commercial Power Industry Y-o-y change
IEA. CC BY 4.0.
Sources: IEA analysis based on Enagas (2023), Natural Gas Demand; ENTSOG (2023), Transparency Platform; EPIAS (2023), Transparency Platform; Trading Hub Europe (2023),
Aggregated consumption.
IEA. CC BY 4.0.
PAGE | 28
Asian gas demand is expected to recover by 3% in 2023, supported by lower prices

Following a 2% decline in 2022, natural gas demand in the Asia country faced disruptions due to widespread Covid-induced
Pacific region remained broadly stable in the first half of 2023. lockdowns. China’s gas demand growth is partially supported by
While China and certain emerging Asian markets recorded an higher domestic production, which rose by 6% (or 6 bcm) y-o-y in
increase in their gas consumption, this was almost entirely offset by the first five months of 2023. The gradual recovery in gas demand
falling demand in Japan and Korea. Asian gas demand for 2023 is increased the call on LNG imports, rising by over 10% (or 4.5 bcm)
projected to increase by 3% based on the assumption of weather y-o-y in the first half of 2023, albeit remaining below the record
normalisation and modest gas consumption growth in India and levels set in 2021. China’s gas consumption in 2023 is projected
emerging Asia. In 2024 we expect gas demand to continue to grow to increase by over 6%, led by the industrial and power sectors.
by over 4%. Stronger electricity demand together with reduced hydro output and
lower gas prices are expected to benefit gas demand for power
Following the country’s first recorded drop in demand in
generation for the remainder of the year. Assuming average
four decades in 2022, China’s apparent natural gas consumption
weather conditions, gas demand in the residential and commercial
returned to growth in Q1 2023, up by an estimated 6% (or 11 bcm)
sectors is projected to recover close to 2021 levels. In 2024 we
y-o-y in the first five months of 2023. This was supported by the
expect China’s gas demand to increase by 7%, supported by
easing of the country’s strict Covid policy, lower hydropower output
economic growth and higher gas burn for power.
and prospects of stronger economic growth compared with last
year. Gas burn in the power sector rose by an estimated 10% y-o- Japan’s gas consumption decreased by 12% (or 4 bcm) in the first
y in the first five months of 2023, as lower hydro output (down by four months of 2023. Gas-fired power generation in the first three
23% y-o-y) increased the call on gas-fired power plants. In addition, months declined by 16% (or 15 TWh) y-o-y according to data from
China experienced historic heat waves in the spring of 2023, METI. This was primarily driven by lower electricity consumption
recording the highest temperatures in 100 years, leading to (down by 6% y-o-y in electricity supply volume in the first five
production shortfalls at hydroelectric power plants. Preliminary data months according to OCCTO data) and improving nuclear
suggest that natural gas use in industry and in the city gas availability. Japan’s nuclear power output rose by 47% (or 12 TWh)
segment returned to growth, largely supported by the recovery of y-o-y in the first half of 2023. In addition, city gas sales for
economic activity compared with the first half of 2022 when the commercial and industrial use in the first four months decreased by
IEA. CC BY 4.0.
PAGE | 29
Gas market update and short-term forecast
Global Gas Security Review 2023
3% and 12% respectively according to data from METI. For 2023 driven by the recovery of the fertiliser sector, up by 0.7 bcm (up
Japan’s gas demand is forecast to decrease by about 5% compared 13% y-o-y). This growth follows the start-up of two new urea
with the previous year. This is mainly driven by the power sector, production facilities at Sindri and Barauni in eastern India, as well
due to the increased operation of nuclear power plants. However, as the softening of global LNG prices since the beginning of the
gas consumption may fluctuate depending on prevailing year. India’s natural gas demand is expected to increase by 5% for
temperatures and the operational status of nuclear power. Gas 2023, primarily driven by higher gas use in industry and for power.
demand in 2024 is expected to decrease by 1% compared with
Emerging Asia’s gas consumption increased by an estimated 3%
2023, as improving nuclear availability together with the continued
y-o-y in the first quarter 2023, with demand growth supported by
expansion of renewable power generation are set to weigh on gas
lower LNG spot prices. Thailand, the region’s largest gas
burn in the power sector.
consumer, recorded 3% y-o-y growth during Q1 2023, following a
Korea’s gas consumption in the first four months of 2023 was 6% 10% drop in gas use in 2022 as a whole. This recovery was mostly
lower than in the same period in 2022. According to data from concentrated in the power sector and the domestic energy industry.
Korea Energy Economics Institute (KEEI), the country saw a In Indonesia gas demand expanded by 4% y-o-y in the first four
significant decrease in city gas demand, considered to have largely months of 2023, led by industry and the power sector. In Malaysia
been due to a warm winter driving down space heating natural gas production rose by 1% y-o-y in the first four months of
requirements. Gas demand for power generation declined by 4% y- 2023, while LNG exports rose by 5% y-o-y, suggesting an estimated
o-y in the first three months of 2023 amid improving nuclear 1% y-o-y growth in domestic gas consumption. Bangladesh and
availability. For the full year of 2023, Korea’s gas demand is Pakistan increased their LNG imports by 0.5% and 10% y-o-y in
expected to decrease by approximately 4% amid higher nuclear the first four months of 2023, respectively. This indicates a gradual
power generation and the expansion of renewables. In 2024 we recovery in the two countries’ gas demand, driven by lower gas
expect gas consumption to decrease by 1%. prices and higher gas use in industry and especially in the power
sector. Bangladesh and Pakistan are highly dependent on imported
India’s gas consumption decreased by 2% y-o-y in the first five
LNG and both countries experienced severe power outages in the
months of 2023, following the 5% y-o-y decline observed in 2022.
spring of 2023, due to erratic weather conditions and difficulties in
The fertiliser sector maintained its dominant share at 32%, followed
paying for fuel imports. In 2023 and 2024 gas demand in emerging
by city gas (21%), power generation (15%), refining (7%) and the
Asia is projected to increase by a modest 2% and 3% respectively,
petrochemical sector (5%). Growth in India’s gas demand was
fuelled by growing economic activity and power demand.
IEA. CC BY 4.0.
PAGE | 30
China and emerging Asia returned to demand growth in the first half of 2023
Estimated quarterly change in gas demand, selected Asian markets, 2021-2023
20 15%
Y-o-y change in bcm
Y-o-y change in %
15
10%
10
5%
5
0 0%
-5
-5%
- 10
-10%
- 15
China Japan Korea India Others* Total Y-o-y change
- 20 -15%
2021 2021 2021 2021 2022 2022 2022 2022 2023 2023
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
IEA. CC BY 4.0.
* Others comprise Indonesia, Malaysia, the Philippines, Singapore and Thailand.
Sources: IEA analysis based on CQPGX (2023), Nanbin Observation; EPPO (2023), Energy Statistics; ICIS (2023), ICIS LNG Edge; JODI (2023), Gas World Database; Korea Energy
Economics Institute (2023), Monthly Energy Statistics; Ministry of Economy, Trade and Industry of Japan (2023), METI Statistics; PPAC (2023), Gas Consumption.
IEA. CC BY 4.0.
PAGE | 31
US natural gas production continues to expand in 2023, principally driven by higher gas output
from shale plays
Dry natural gas production in the United States increased by an Haynesville Extension pipeline was completed, adding 4 bcm/yr of
estimated 5.5% (or close to 30 bcm) y-o-y in the first half of 2023, exit capacity from the Haynesville play to the US Gulf coast.
with the average daily output above 100 bcf (or 2.8 bcm/d) during
In contrast, dry gas production in the Appalachian Basin – the
the period. This strong growth was principally met by additional gas
largest source of US gas supply with a share of over 30% in 2022 –
supply from shale plays. Dry gas production in the Permian Basin
contracted by an estimated 0.5% (or 1 bcm) y-o-y in H1 2023. This
increased by an estimated 15% (or close to 10 bcm) y-o-y in H1
was primarily driven by the Utica shale, where gas production
2023, accounting for over 35% of incremental gas output in the
dropped by close to 8% y-o-y in Q1 2023, while output increased
United States. This production boost was supported by steady
marginally in the Marcellus play. Lower domestic demand together
drilling activity, with an average of 471 new wells drilled per month
with relatively high inventory levels reduced the call on Appalachian
in Q1 2023, representing a 17% increase compared with 2022.
gas producers. In addition, midstream constraints are making it
Similarly, well completions experienced an increase of more than
difficult to increase supplies to demand centres, as long-haul
15% y-o-y over the same period.
interstate pipelines were already running close to nameplate
The Haynesville shale gas play in north-eastern Texas and north- capacity in 2022. The Mountain Valley Pipeline is expected to be
western Louisiana was the second largest source of incremental commissioned by the end of 2023/early 2024 and would add
gas supply in H1 2023. Dry gas output rose by close to 20% (or 20 bcm/yr of transmission capacity from north-western West
10 bcm) compared with the same period in 2022. Daily output Virginia to southern Virginia.
reached an all-time high of 0.45 bcm/d in April 2023. Drilling activity
We forecast natural gas production in the United States to continue
reports show how elevated Henry Hub prices in 2022 provided a
to increase, albeit at a slower pace compared with previous years
supportive economic environment for new well development in the
amid lower domestic demand and limited LNG export capacity
region, with a 48% increase y-o-y in 2022 resulting in a monthly
additions. We expect dry gas production to grow by 2% in 2023 and
average of 71 wells. 2022 also saw an increase of 22% in the well
by less than 1% in 2024.
completion rate. In May 2023 the expansion of the Acadian
IEA. CC BY 4.0.
PAGE | 32
US natural gas production rose to above the 100 bcf/d mark in the first half of 2023
Gas production by type, United States, 2018-2023
Total US gas (bcf/d)

100 100
Appalachian Basin
bcm
80 95 Other dry shale
Permian Basin
60 90
Other associated shale
100 120.0
90 100.0
80 Other production
70 80.0
40 60 85
50 60.0
40 40.0 Total US gas
30
20 20.0
10
0 0.0
20 J MS J MS J MS J M 80 Pipeline imports (net)
2018 2019 20202021
Total US gas (bcf/d)
0 75
J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J
2018 2019 2020 2021 2022 2023
IEA. CC BY 4.0.
Sources: IEA analysis based on EIA (2023), Natural Gas Data; Natural Gas Weekly Update.
IEA. CC BY 4.0.
PAGE | 33
A new baseload: LNG accounted for close to 40% of Europe’s gas consumption in H1 2023
Europe’s total gas supply dropped by 13% y-o-y (or 38 bcm) in H1 phase-out of the Groningen field. Pipeline gas deliveries from North
2023, largely driven by lower Russian piped gas deliveries. In this Africa declined by 5% y-o-y (or 0.8 bcm), with flows to Iberia falling
context, LNG continued to gain market share and accounted for by 18% (or 0.8 bcm) and remaining broadly flat to Italy. Gas
almost 40% of Europe’s gas consumption in H1 2023 – a share supplies from Azerbaijan via the Trans Adriatic Pipeline rose by 4%
similar to Russia’s before its invasion of Ukraine. Meanwhile, the y-o-y (or 0.2 bcm) in H1 2023.
share of OECD Europe’s gas demand met by Russian piped gas
Europe’s LNG imports rose by over 8% y-o-y (or 6.5 bcm) in H1
stood at below 10% during the first half of the year.
2023. LNG flows from the United States increased by 7% y-o-y (or
Russian piped gas exports to OECD Europe fell by an estimated close to 3 bcm) to account for over 40% of incremental LNG supply
65% y-o-y (or 38 bcm) in H1 2023. The profile of flows to the into Europe. This further reinforced the United States’ position as
European Union stayed relatively stable at an average of 60 mcm/d, Europe’s leading LNG supplier, providing 47% of the region’s total
representing a decline of over 75% (or 36 bcm) compared with H1 LNG imports and meeting over 15% of its gas demand.
2022. Exports to Türkiye fell by an estimated 20% y-o-y. Russia’s
The profile of Russian piped gas supplies remains a major
LNG exports to Europe rose by 5% y-o-y (or 0.5 bcm). According to
uncertainty over the forecast period. Assuming that flows to the
shipping data, Belgium, France and Spain accounted for almost
European Union continue at their H1 levels, deliveries of Russian
80% of Europe’s total LNG imports from Russia in H1 2023.
piped gas to OECD Europe would drop by more than 50% (or
Norway’s piped gas supplies to the rest of Europe declined by 42 bcm) in 2023 compared with 2022. LNG imports are expected to
7.5% y-o-y (or over 4 bcm) in H1 2023 amid a higher level of remain broadly flat in 2023 compared with last year. Following the
planned maintenance and unplanned outages. Norwegian pipeline increase in H1 2023, OECD Europe’s LNG inflows are projected to
deliveries to the European Union fell by 2.5%, while exports to the decline for the rest of the year, reflecting lower injection needs and
United Kingdom fell by around over 23% (or 3.2 bcm). Non- a continuing decline in European gas consumption. However, a
Norwegian domestic production fell by an estimated 10% y-o-y colder than average Q4 could lead to higher LNG import needs.
(or close to 4 bcm) in the first five months of 2023. This was largely This forecast assumes that Russian piped gas deliveries stabilise at
driven by lower gas output in the Netherlands amid the continued their 2023 levels in 2024, while LNG imports increase by 3%.
IEA. CC BY 4.0.
PAGE | 34
LNG continued to substitute Russian piped gas in Europe’s supply mix in H1 2023
Y-o-y change in European natural gas imports and deliveries from Norway, H1 2023 vs H1 2022
40
Y-o-y change in bcm
30
20
10
Others
United States
0
- 10
- 20
- 30
- 40
Russia - pipeline flows Norway - pipeline flows Others - pipeline flows LNG
IEA. CC BY 4.0.
Platform; ICIS (2023), ICIS LNG Edge; JODI (2023), Gas World Database.
IEA. CC BY 4.0.
PAGE | 35
Global LNG trade grew by 3% in first half of 2023, primarily supported by the United States
In the first half of 2023, global LNG trade expanded by 3% y-o-y (or flows to France dropped by 14% (or 2.3 bcm) in the first half of 2023
9 bcm), supported by higher supply from the United States, Norway amid widespread strike action in April and May. Higher LNG
and Qatar. Over the same period, LNG demand increased by 3% y- supplies to Europe were facilitated by the commercial start-up of
o-y (or 9 bcm), mainly due to Europe (up by 8% y-o-y or 6.6 bcm) several new floating storage and regasification units (FSRUs) in
and the Asia Pacific region (up by 2% y-o-y or 3 bcm). Europe. Germany commissioned its first three FSRUs in less than a
year, representing a total regasification capacity of 20 bcm/yr. In the
From a supply perspective, this growth was driven by
Netherlands, Gasunie commissioned the Eemshaven FSRU in
North America and the Asia Pacific region, which respectively saw a
October 2022, with a regasification capacity 8 bcm/yr. In Finland,
7% (or 3.8 bcm) and 3% (or 2.7 bcm) y-o-y increase in their LNG
Gasgrid’s Inkoo FSRU was commissioned in January 2023 with a
output. The United States, Norway and Qatar were the main
regasification capacity of 5 bcm/yr.
contributors to this expansion. In the United States higher y-o-y
output was primarily driven by the continued ramp-up of Calcasieu LNG imports into the Asia Pacific region increased by a modest
Pass and the return of the Freeport LNG export terminal to full 2% y-o-y (or 3 bcm) in the first half of 2023. This was primarily
service after a fire-induced outage in June 2022. The resumption of driven by China. After more than 13 months of year-on-year
production at the Hammerfest LNG terminal in Norway contributed declines, China’s net LNG imports started to recover in March 2023
2.1 bcm to global supply growth. In Australia higher output from the and grew by 10.6% y-o-y (or 4.4 bcm) in the first half of 2023. New
Prelude floating LNG (FLNG) and the Wheatstone terminal regasification terminals are due to come online by the end of the
supported 2.6% (or 1.38 bcm) y-o-y growth in the country’s LNG year, adding a further 20 bcm/yr to the existing capacity of
exports in the first half of 2023. Additional y-o-y growth in LNG 140 bcm/yr. Thailand’s LNG imports grew by a strong 30% y-o-y (or
supply was driven by Qatar, the continued ramp-up of 1.8 bcm), largely supported by the country’s declining domestic
Mozambique’s Coral South FLNG, Indonesia and Algeria. production. India’s LNG imports remained broadly stable (down by a
slight 0.3 bcm) compared with the first half of 2022. In April the
From a demand perspective, Europe continued to lead LNG
country commissioned the Dhamra LNG import terminal (7 bcm/yr),
demand growth in the first half of 2023. The region’s net LNG
which adds more than 10% to India's existing regasification
imports rose by 8% y-o-y (or 6.6 bcm), largely driven by higher LNG
capacity. This is India's seventh LNG import facility and the first on
inflows to the Netherlands, Germany and Italy. In contrast, LNG
IEA. CC BY 4.0.
PAGE | 36
the east coast. We expect LNG demand in India to remain flat in In addition to existing LNG importers, Hong Kong, Viet Nam and
2023, as offshore gas production by Reliance Industries Ltd, India's the Philippines all become first-time LNG buyers this year. The
largest company by market value, reduces the need to import LNG. world’s largest FSRU arrived in Hong Kong in April 2023 to serve
the city’s first LNG import terminal. The terminal has a regasification
Asian spot LNG prices moderated significantly from the beginning of
capacity of 5.5 bcm/yr and is scheduled to start operations in mid-
2023 to trade at an average of USD 10/MBtu in Q2 2023, below the
2023. In Viet Nam, Thi Vai LNG terminal (1.36 bcm/yr) received its
price range of oil-indexed LNG contracts. This encouraged South
commissioning cargo in early July from Bontang. Regasified LNG
Asian buyers to come back to spot markets via tenders, especially
will primarily supply two gas-fired power plants with a combined
as demand for electricity in the region has risen in the wake of heat
capacity of 1.5 GW currently being built in the neighbouring
waves in spring 2023. For instance, Bangladesh saw the rate of its
province of Dong Nai. The Philippines started importing LNG in
LNG buy tenders awarded rise from less than 30% in 2022 to 85%
April 2023 with the commissioning of its first LNG import facility,
so far in 2023. However, the country delayed payments for both
located in Batangas Bay (7 bcm/yr). The country’s LNG import
long-term and spot LNG cargoes, following a depreciating currency
needs are set to increase amid falling domestic production.
and broader financial difficulties. Delayed payments could impact
However, neither Viet Nam nor the Philippines had secured a long-
future interest in its spot tenders or raise the premiums for supplying
term LNG supply contract as of June 2023.
into the country due to higher financial risk. For the time being,
Bangladesh's state-owned company Petrobangla has secured LNG LNG imports in Central and South America recovered in Q2, up
imports by signing an SPA with QatarEnergy Trading (1.1 bcm/yr for 24% (or 1 bcm) y-o-y, following a 27% (or 1 bcm) y-o-y decline in
15 years from 2026). Q1. Overall, in the first half of 2023, LNG imports rose slightly by
2% (or 0.2 bcm) y-o-y, mainly driven by higher imports into
In contrast, Japan LNG imports declined by 12% (or 6 bcm) in the Argentina (up 88% or 0.8 bcm) for power production. In contrast,
first half of 2023, amid improving nuclear availability, lower hydroelectric production improved significantly this year in Brazil,
electricity demand and high LNG stocks. Japan’s LNG imports in which saw its LNG imports fall by 80% (or 1.7 bcm) year-on-year in
May fell to the lowest in more than 20 years at 5.5 bcm (down by the first half of 2023, with no deliveries until the end of April.
28% y-o-y), as efforts to save energy and boost nuclear power
For the full year of 2023 we forecast global LNG trade to increase
reduced gas demand.
by 4% (or 22 bcm). The United States alone is expected to
contribute half of the incremental LNG supply and become the
IEA. CC BY 4.0.
PAGE | 37
world’s largest LNG exporter. This growth will be supported end of 2023, although uncertainties remain around its ramp-up
primarily by the ramping up of the Calcasieu Pass LNG terminal and schedule and initial utilisation rates. LNG demand in 2024 is
the restart of Freeport LNG. Additional supply is expected from expected to be driven by Asia and Europe, with the two regions
improved feed gas availability in Algeria and Trinidad and Tobago, competing for limited supply. Asian LNG imports are projected to
and the ramp-up of Coral South FLNG in Mozambique. Demand increase by 6% in 2024, primarily supported by China’s
growth is set to be largely driven by Asia. China’s LNG imports are procurement through its growing portfolio of long-term import
expected to increase by 15% over 2022 levels, while remaining contracts. LNG inflows into Europe are forecast to increase by 3%,
below their record levels of 2021, and heavily dependent on growth driven by a moderate recovery in the region’s gas demand.
in domestic production and pipeline imports from Central Asia and
from Russia with the planned ramp-up of the “Power of Siberia 1”
pipeline. After strong growth in Q1 2023, OECD Europe’s LNG
imports are expected to decline in the second half of 2023 amid
lower injection needs and a continued decline in European gas
consumption.
In 2024 global LNG trade growth is expected to moderate to 4% (or

24 bcm) – well below the 8% average growth rate experienced
between 2017 and 2021. Below-average LNG liquefaction capacity
additions are expected to prolong tight supply conditions into 2024.
Incremental LNG supply is anticipated to be driven primarily by the
gradual start-up of new LNG liquefaction plants in North America
(Plaquemines LNG Phase 1, Golden Pass LNG Train 1, Fast LNG
Altamira), the ramp-up of Tangguh Train 3 in Indonesia and the
start-up of Grand Tortue Ameyim off Senegal and Mauritania.
Russia’s Arctic LNG 2 Train 1 is expected to start operations at the
IEA. CC BY 4.0.
PAGE | 38
The United States is expected to become the world’s largest LNG supplier in 2023
Monthly LNG exports from Australia, Qatar and the United States, 2012-2023
IEA. CC BY 4.0.
Source: IEA analysis based on ICIS (2023), ICIS LNG Edge.
IEA. CC BY 4.0.
PAGE | 39
Global LNG market growth is expected to moderate to 4% in 2024

LNG imports and exports by region, 2015-2024
800
Actual Forecast
bcm
IMPORTS
600
North America
400
Middle East
200 Europe
0 Eurasia
-200 Central and South America
Asia Pacific
-400
Africa
-600
EXPORTS
-800
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
IEA. CC BY 4.0.
IEA. CC BY 4.0.
PAGE | 40
Asian spot LNG and European hub prices fell to a two-year low in Q2 2023
Subdued demand, together with high storage levels and improving premium over European hub prices for the first time since Q1 2022,
supply fundamentals, continued to put downward pressure on averaging USD 0.7/MBtu above TTF month-ahead prices in June. If
natural gas prices across key gas markets in Q2 2023. Asian spot Asian spot LNG prices maintain their premium, LNG inflows into
LNG and European hub prices traded below the estimated average Europe could decline in the second half of 2023.
price of oil-indexed LNG contracts during Q2 and had dropped to a
In the United States, Henry Hub prices declined by 15% on the
two-year low by the end of May 2023.
quarter to an average of USD 2.2/MBtu in Q2 2023 – their lowest
In Europe, TTF spot prices declined by 34% on the quarter to an Q2 level since 2020. Strong growth in domestic production
average of USD 11/MBtu, standing 63% below last year’s levels. combined with lower gas demand and above-average storage
Strong LNG inflow, together with high inventory levels and levels put downward pressure on gas prices.
continued demand reduction, put strong downward pressure on
According to forward curves as of the end of June 2023, TTF is
European hub prices. By the end of May, TTF month-ahead prices
set to average at just above USD 13.5/MBtu in 2023, with Asian
had dropped to below USD 8/MBtu – their lowest level in two years.
spot LNG averaging at USD 14/MBtu and Henry Hub averaging
TTF’s premium over NBP narrowed to USD 0.7/MBtu in Q2 2023
USD 2.7/MBtu. Asian spot LNG prices are expected to have an
from USD 10/MBtu in the same period last year. North-western
average premium over TTF of USD 1.3/MBtu during the second half
Europe’s increasing LNG regasification capacity and lower storage
of 2023. Natural gas prices could strengthen again in 2024 amid
injection needs eased congestion along the EU-UK interconnectors,
tighter supply-demand fundamentals. Forward curves indicate that
which in turn tightened the TTF-NBP price spread.
TTF prices are expected to increase by 25% to average over
Asian spot LNG followed a similar trajectory to European hub USD 17/MBtu in 2024, while Asian spot LNG rises by 20% to stay
prices. Spot LNG prices in Asia declined by 35% from Q1 to an just below USD 17/MBtu. TTF regains its premium over Asian spot
average of USD 11/MBtu in Q2 2023 – down by 60% compared LNG prices to an average of USD 0.5/MBtu, allowing for a stronger
with the same period last year. Less competition from Europe, pull of LNG towards the European market. In the United States,
subdued demand and improving LNG availability weighed on prices. Henry Hub prices are expected to rise by 30% to USD 3.5/MBtu on
By the end of May, Asian spot LNG prices had recovered their tighter supply-demand fundamentals.
IEA. CC BY 4.0.
PAGE | 41
Asian spot LNG prices are expected to trade above TTF during the second half of 2023
Main spot and forward natural gas prices, 2020-2024*
60
USD/MBtu
40
20
0
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2022 2023 2024
TTF Henry Hub Asian spot LNG
IEA. CC BY 4.0.
* Future prices are based on forward curves as of the end of June 2023 and do not represent a price forecast.
Sources: IEA analysis based on CME (2023), Henry Hub Natural Gas Futures Quotes, Dutch TTF Natural Gas Month Futures Settlements; LNG Japan/Korea Marker (Platts) Futures
Settlements; EIA (2023), Henry Hub Natural Gas Spot Price; ICIS (2023), ICIS LNG Edge; Powernext (2023), Spot Market Data.
IEA. CC BY 4.0.
PAGE | 42
Gas storage levels remained well above their historic average in Q2 2023
Storage sites opened the 2023 injection season 1 with inventory levels by early August and could be filled close to 100% of their
levels standing well above their historic averages, as lower gas working capacity by mid-September. In Ukraine gas inventory
demand depressed withdrawal rates over the 2022/23 winter. levels at the end of March 2023 were estimated at 9 bcm, rising to
Storage injections displayed a varied pattern in Q2 2023: while 10.5 bcm by the end of Q2. Ukraine has a target to build up gas
the United States experienced above-average storage build-up, storage levels of 14 bcm by the start of the 2023/24 heating season.
injections in the European Union slowed compared with previous
In the United States storage sites opened the 2023 injection
years, albeit remaining sufficient to keep the bloc well on track to
season 43% full, standing almost 20% (or 8 bcm) above their five-
reach its 90% fill target by 1 November 2023.
year average. Strong growth in domestic gas production allowed for
In the European Union, as a consequence of below-average net a more robust storage build-up in the first half of the gas summer.
withdrawals, storage sites closed the 2022/23 heating season 55% Net injections in Q2 were 7% (or 1.9 bcm) above their five-year
full and with inventory levels standing 67% (or 22 bcm) above their average and totalled 29 bcm. Consequently, US storages sites were
five-year average. Lower primary gas supply (domestic production 67% full by the end of June, standing 15% (or 10 bcm) above their
and imports) led to a slower storage build-up over the first half of five-year average. If injections return to their five-year average,
the gas summer. Net injections fell 20% (or 5.5 bcm) below their storage will be over 90% full by the beginning of November, which
five-year average to a total of 22 bcm in Q2 2023. While slower typically marks the start of the heating season in the United States.
injection rates moderated the European Union’s storage surplus,
In Japan and Korea, closing LNG stocks stood 85% (or 6.5 bcm)
inventory levels still stood 27% (or 16.5 bcm) above their five-year
above their five-year average in April 2023. The LNG stocks of
average at the end of the Q2. Consequently, EU inventory levels
Japan’s largest power generation companies stood at 2.1 Mt
reached 77% of their working storage capacity at the end of June.
(3.1 bcm) at end of June 2023, 15% above their five-year average.
Assuming that storage injections continue at the average rate
observed since mid-April, EU storage sites would reach 90% fill
1
The injection season (or gas summer) in the markets of the Northern Hemisphere refers to the
period between 1 April and 30 September.
IEA. CC BY 4.0.
PAGE | 43
EU and US storage sites closed Q2 2023 with 77% and 64% fill levels, respectively
US underground storage inventory EU underground storage inventory Japan and Korea LNG stock inventory
120 120 15
bcm
bcm
bcm
100 100
12
80 80
9
60 60
6
40 40
20 3
20
0 0 0
Jan
Jun
Feb
Jul
Oct
Aug
Sep
Jan
Jun
Nov
Dec
Apr
Feb
Jul
Mar
May
Oct
Nov
Dec
Apr
Aug
Sep
Mar
May
Jan
Jun
Feb
Jul
Oct
Aug
Sep
Nov
Dec
Apr
Mar
May
Five-year range Five-year average 2022/23
IEA. CC BY 4.0.
Sources: IEA analysis based on EIA (2023), Weekly Working Gas In Underground Storage; GIE (2023), AGSI+ Database; IEA (2023), Monthly Gas Data Service.
IEA. CC BY 4.0.
PAGE | 44
Global Gas Security Review 2023 LNG contracting and flexibility update
LNG contracting and flexibility update
IEA. CC BY 4.0.
PAGE | 45
Update on LNG contracting trends

This section provides an overview of the most recent LNG from 26% in 2016 to over 41% in 2022. Portfolio players are key
contracting trends, analysing LNG supply availability and the enablers of short-term supply flexibility, facilitated by their net open
evolution of destination flexibility in LNG contracts. The analysis is positions and commercial ability to resell long-term LNG supply to
based on the contractual positions of exporters and importers and customers on a short-term or spot basis.
their actual traded volumes, using the IEA internal LNG contract
The growing flexibility and liquidity of the global LNG market was
database. Unless otherwise stated, only firm supply contracts are
crucial in the response to the gas supply shock of 2022 – Russia’s
taken into account. These include LNG SPAs, equity entitlements
steep cuts to its piped gas supplies to the European Union totalled
and tolling agreements linked to an LNG supply project that is either
almost 80 bcm, equating to close to 15% of global LNG trade and
operational, under construction or has reached a final investment
leading to a profound reconfiguration of global LNG flows. While
decision (FID).
European LNG imports increased by 60% (or close to 65 bcm) in
Since the first issue of the Global Gas Security Review in 2016, the 2022, Asian LNG imports declined by 7%, primarily driven by lower
LNG market has gained in depth and liquidity. Total traded volumes inflows to China, which saw an unprecedented drop of 20% in its
expanded by 50% between 2016 and 2022, while both buyers and LNG procurements. The United States alone accounted for two-
sellers are displaying a greater diversity in their commercial thirds of the incremental LNG deliveries to Europe. The destination
preferences and flexibility requirements. The share of destination- flexibility in the contractual structures underpinning US LNG supply
free contracts rose from 30% in 2016 to over 46% in 2022, largely was instrumental in enabling these higher LNG flows.
driven by the expansion of US LNG. Pricing terms are becoming
Without this strong LNG inflow, the European market would have
more diverse, with the share of oil-indexed LNG export contracts
been left in a significantly more vulnerable position ahead of the
declining from over 71% in 2016 to 59% in 2022, replaced by hub
2022/23 heating season, with an increased risk of gas supply
indexation and hybrid pricing formulae.
disruption. In contrast, price-sensitive buyers with high exposure to
In addition to traditional suppliers, the role of portfolio players in the spot market faced a deterioration in the security of their gas and
LNG trade has increased significantly in recent years: their electricity supply in 2022, with rotating power cuts introduced in
procurement contracts’ share of total LNG contracts in force rose Bangladesh and Pakistan amid the inadequacy of gas supplies.
IEA. CC BY 4.0.
PAGE | 46
Flexible LNG played a key role in maintaining gas supply security in Europe in 2022
Y-o-y change in global LNG exports and imports by key region, 2021-2022
Change in LNG imports

65
60 Other
Europe
55 China
50
Y-o-y change in bcm
Change in LNG supply

45 Lower demand in
40 South America
35 Lower demand Supply growth from
in Asia other regions
30 EU
Demand in other
25
regions
20 LNG export growth
15 from the United States
10
5
0
Europe Asia Pacific South and Other regions Other regions United States
Central America - demand - supply
IEA. CC BY 4.0.
IEA. CC BY 4.0.
PAGE | 47
Close to 90 bcm/yr of LNG liquefaction capacity sanctioned since Russia’s invasion of Ukraine
After a record year for FIDs in 2019, with almost 100 bcm/yr of new Phase 2 project (9 bcm/yr) reached FID in March 2023, with first
liquefaction capacity sanctioned, 2020 saw only one project LNG expected by 2025. Port Arthur LNG Phase 1 (18 bcm/yr)
reaching FID (Energía Costa Azul in Mexico), with a capacity of announced FID in March 2023. The project consists of two trains
4 bcm/yr. The steep decline in LNG liquefaction investment in 2020 with a target for commercial operations of 2027 and 2028. The Rio
reflected the uncertainties created by the Covid-19 pandemic and Grande LNG phase 1 project (24 bcm) reached FID in July 2023.
falling oil and gas prices. 2021 marked a return to LNG investment: The project consists of three trains, with first LNG expected in 2027.
two projects with a total capacity of 52 bcm/yr reached FID. Qatar In addition to these large-scale projects, the Congo FLNG project
sanctioned its 45 bcm/yr expansion project in February – the largest was launched in April 2023. The first FLNG plant (0.8 bcm/yr) is set
FID in the history of LNG. In Australia, Woodside Petroleum took to begin production in 2023. The project could be expanded to
FID on the Pluto LNG Train 2 project (7 bcm/yr) in November 2021. 4 bcm/yr by 2025 with the installation of a second FLNG. Offshore
at Altamira in Mexico, an initial FLNG production unit is set to be
Since Russia's invasion of Ukraine in February 2022, close to
deployed by July or August 2023 with a capacity of 1.9 bcm/yr.
90 bcm/yr of LNG liquefaction capacity has been approved, with the
According to the project developer, additional FLNG units are to be
United States alone accounting for 95% of the new FIDs. In May
installed during 2024, scaling total liquefaction capacity up to
2022 the first phase of the Plaquemines LNG project (18 bcm/yr)
5.5 bcm/yr. In Gabon, the Cap Lopez FLNG project (1 bcm/yr)
received FID. The project developers plan a phased start-up, which
reached FID in February with first LNG expected by 2026. Qatar
could signify first LNG by the end of 2024 and the start of
awarded an engineering, procurement, and construction contract for
commercial operations by mid-2025. The Corpus Christi Phase 3
its North Field South (NFS) expansion project (22 bcm/yr) in May
expansion project (14 bcm/yr) was sanctioned in June 2022 and it is
2023, although no FID has been announced yet.
expected to come online by the end of 2025. In addition, one
floating LNG (FLNG) project in Malaysia (ZLNG Sabah) reached Together with Qatar’s NFS, projects that reached FID or began
FID in December 2022, with a capacity of 2.7 bcm/yr. construction would add close to 250 bcm/yr of liquefaction capacity
to the end of 2030. This strong increase in LNG production capacity
In the first half of 2023 over 50 bcm/yr of LNG liquefaction capacity
could loosen market fundamentals and ease gas supply security
was sanctioned and/or started construction. The Plaquemines
concerns in the second half of the decade.
IEA. CC BY 4.0.
PAGE | 48
The United States alone accounted for 90% of the LNG FIDs sanctioned in 2022-H1 2023
FIDs for new LNG liquefaction capacity, 2014-2023
100
Nameplate capacity (bcm/yr)
80
60
40
20
0
2014 2015 2016 2017 2018 2019 2020 2021 2022 Jan-July
2023
United States Indonesia Mozambique Russia
Canada Mauritania and Senegal Nigeria Mexico
Qatar Australia Congo Gabon
Malaysia
IEA. CC BY 4.0.
Sources: IEA analysis based on various public statements.
IEA. CC BY 4.0.
PAGE | 49
North America remained the largest source of new LNG export contracts in 2022
In 2022, 60 bcm/yr of newly signed contracts were concluded with stages of development in the United States and need long-term
post-FID projects, including portfolio players’ contracts. This offtake agreements to reach FID.
represents a 23% decline in contracting activity compared with
On the import side, portfolio players led contracting activity to
2021. However, when pre-FID contracts are considered, the total
account for around 40% (or 24 bcm/yr) of the volumes signed in
contracted volume in 2022 rises to just over 100 bcm/yr, an
2022. In terms of regions, Asia continues to dominate the
increase of 20% compared with the total volumes contracted in
contracting landscape with a 37% share (or 22 bcm/yr) of new
2021. More than 70% of the total contracted volume in 2022
volumes contracted in 2022. China alone accounted for 21% of the
originated from North America and the Middle East.
contracts signed in 2022. European buyers increased their LNG
On the export side, North America continued to dominate the LNG contracting activity in 2022 in the aftermath of Russia’s invasion of
contracting landscape, accounting for around half (or 30 bcm/yr) of Ukraine. The volume of LNG contracted by Europe rose from
the volumes contracted in 2022. The second largest source of 4 bcm/yr in 2021 to close to 15 bcm/yr in 2022, its highest level in
newly signed contracts was the Middle East, with a share of 20% the last five years. Hence, Europe’s share of post-FID LNG
(or 11 bcm/yr). Portfolio players accounted for 15% (or 9 bcm/yr) of contracts rose from 5% in 2021 to 24% in 2022. When pre-FID
the LNG supply contracts signed in 2022, well below the 32% contracts are considered, Europe’s share remains rather limited,
average during 2016-2020. The Asia Pacific region’s export share accounting for 20% of the total volumes contracted in 2022.
increased from 3% in 2021 to 12% in 2022, primarily supported by
In contrast, portfolio players’ share of the total contracted volumes
new LNG export contracts signed with producers in Australia and
(pre-FID contracts included) rose from 17% in 2021 to over 40% in
Brunei.
2022, highlighting their key role in bridging the gap between certain
When pre-FID contracts are considered, North America’s buyers’ reluctance to sign long-term contracts and the sellers'
dominance is even more pronounced, with the region accounting for imperative to secure long-term contracts before sanctioning new
70% (or 70 bcm/yr) of all the volumes contracted in 2022. This is projects. Notably, over 70% of the import contracts signed by
reflective of the strong pipeline of LNG projects that are at various portfolio players are associated with North American LNG projects.
IEA. CC BY 4.0.
PAGE | 50
In the first half of 2023, 16 bcm/yr of firm contracts were concluded, contracts concluded in the first half of 2023. When pre-FID
representing a decline of 10% compared with the same period in contracts are included, their share rises to 36% of the total volumes
2022. When pre-FID contracts are included, the total volume of contracted in the year to date. The majority of the portfolio offtake
contracts rises to 45 bcm/yr – almost 10% higher than the total contracts were signed with North American projects. Asian buyers
volumes contracted in the first half of 2022. The slowdown in accounted for 46% of the total volumes contracted in the first half of
contracting activity is partly reflective of the limited uncontracted 2023, with the bulk of them destined for China. In contrast,
capacity available (both at existing LNG liquefaction plants and European buyers accounted for just 18%. The relatively small share
projects that are under construction or have reached FID), as well of European buyers might reflect the uncertainties surrounding the
as the uncertainties related to the long-term future of natural gas. future of natural gas in Europe.
On the export side, contracting activity was dominated by the

Middle East, accounting for 70% (or 11 bcm/yr) of the contracted
volumes. This has been largely driven by the renewal of offtake
agreements with Oman. North America accounted for 23% (or
4 bcm/yr) of the new, firm export contracts. However, when pre-FID
agreements are considered, North America’s share rises to 63% of
the total volumes contracted in the year to date.
On the import side Asian buyers continue to play a dominant role,

accounting for 60% (or 10 bcm/yr) of the firm volumes contracted in
the first half of 2023, with China alone concluding 8 bcm/yr of
offtake agreements. Europe accounted for 17% (or 3 bcm/yr) of the
contracts signed in the year to date, with most of the offtake
agreements signed with projects in North America and the Middle
East. Portfolio players’ share stood at 24% (or 4 bcm/yr) of the firm
IEA. CC BY 4.0.
PAGE | 51
Portfolio players and Asian buyers continue to lead LNG contracting activity on the import side
Volume of contracts concluded in each year split by exporting and importing source, 2018-2023
IEA. CC BY 4.0.
Notes: Contracted volumes used for the analysis are associated with confirmed export projects that have taken FID. 2023 represents volumes signed by the end of June 2023.
“Portfolio” volumes are contracted by a market player who may source product from one or multiple regions to fulfil contractual obligations.
IEA. CC BY 4.0.
PAGE | 52
Long-term agreements continue to dominate the contracting landscape

LNG contracting activity in 2022 indicates a trend towards longer Medium-sized contracts (2-4 bcm/yr) accounted for 30% and small
contract durations, a stronger interest in large contracts and an contracts (< 2 bcm/yr) for 40% of the total volumes contracted in
increase in the number of destination-flexible contracts. 2022. In H1 2023 small contracts were the majority, potentially
indicating that buyers are withholding from signing up for large
Long-term agreements (with a duration of over 10 years) have
volumes amid future market uncertainties.
dominated the contracting landscape since 2018. In 2021 they
accounted for 84% of contracted volumes and for 88% in 2022, their The share of destination-fixed volumes in newly signed contracts
highest share in the last three years. This high share was driven by averaged 78% during 2020 and 2021, representing a sharp
Asian buyers, which accounted for 42% of contracted long-term increase from just 22% during 2018 and 2019, when new FIDs in
volumes; China alone was responsible for 23%. Agreements with a the United States supported more flexible contractual structures. In
medium-term duration (between five and ten years) accounted for 2022 the share of destination-free contracts rose compared with
12% of the volumes contracted last year, with portfolio players 2020 and 2021, accounting for around half of the newly contracted
acting as offtakers. In the first half of 2023, the share of long-term volumes. Around 75% of destination-flexible contracts were
contracts stood at 78%, with portfolio players acting as offtakers for associated with North American projects. The bulk of destination-
some of them. The strong price volatility seen in 2022 and growing flexible volumes were contracted by portfolio players (75%) and
supply uncertainty could have reminded both buyers and sellers of European buyers (25%). In contrast, the majority of destination-
the importance of long-term contracts to secure a stable price fixed volumes were contracted by Asian buyers. China accounted
outlook and reduce short-term price variability. for 40% of the destination-fixed contracts concluded in 2022. In H1
2023 the share of destination-fixed contracts rose to 76%, primarily
In volume terms, large contracts (over 4 bcm/yr) accounted for 30%
supported by the contractual preferences of Asian buyers. Despite
of contracted volumes in 2022 – their highest share since the IEA
the recent increase in destination-fixed contracts, the share of
Global Gas Security Review started tracking LNG contracting trends
destination-free volumes in total contracted volumes is set to
in 2015. This relatively high share of large contracts is underpinned
increase over the medium term due to the continued expiry of
by three SPAs, two where portfolio players acted as offtakers and a
legacy contracts with destination clauses.
major contract signed between QatarEnergy and China’s Sinopec.
IEA. CC BY 4.0.
PAGE | 53
Destination-flexible contracts accounted for half of the volumes contracted in 2022

Volume of contracts concluded in each year, split by contractual element, 2018-2023
IEA. CC BY 4.0.
Note: 2023 represents volumes signed by the end of June 2023. Destination flexibility is only for indicative purposes, assumed in the absence of a clear source of information.
IEA. CC BY 4.0.
PAGE | 54
Portfolio players: Key enablers of market flexibility and liquidity

Portfolio players have an important role in meeting buyers’ growing the first half of 2023. This might be reflective of their preference
need for flexibility in volume and destination. They procure a mix of under current market conditions to sell their LNG volumes on the
LNG supplies from various origins and resell to customers spot market rather to sign term contracts.
according to their requirements via term and spot contracts.
The portfolio players’ contracted ratio – sales offtake as a
The role of portfolio players has grown significantly in recent years: percentage of purchase obligations, a metric of relative exposure to
by volume, the share of their procurement contracts among all LNG certain types of market risk – declined to 52% in 2022 from 71% in
contracts in force rose from 26% in 2016 to over 40% in 2021 and 2017. This means that the share of their purchase obligations not
stayed at similar levels in 2022. This increase was underpinned by covered by term sale contracts – or their net open position –
particularly strong contracting activity between 2016 and 2020, increased from 29% to 48% between 2017 and 2022. Based on
when portfolio players accounted for 34% of the total purchase existing contracts, their net open position is set to increase to an
contracts signed. Their share declined to 9% in 2021, before average of close to 50% between 2023 and 2026. The growing net
rebounding to 38% of the total offtake agreements concluded in position of portfolio players allows them to play a more active role in
2022. The average length of new purchase contracts concluded by the short-term market by increasing their spot sales and benefit
portfolio players increased from 5 years in 2017 to over 15 years in from the arbitrage opportunities arising from regional price
2022. The share of large contracts (more than 4 bcm/yr) rose from differentials.
30% in 2018 to account for over 50% concluded by portfolio players
Portfolio players played a crucial role in supplying flexible LNG to
in 2022.
the European Union amid the steep fall in Russian piped supplies
The volume of sale contracts signed by portfolio players fell to from the beginning of the 2021/22 heating season. Preliminary
18 bcm/yr 2021 and below 10 bcm/yr in 2022 – a sharp decline from shipping data indicate that portfolio players accounted for around
the 22 bcm/yr average between 2016 and 2020. Consequently, the half of incremental LNG supply into the European Union in 2022.
proportion of sale contracts signed by portfolio players has fallen The supply flexibility they provide is expected to remain a key
from 50% of total volumes contracted in 2017 to just 14% in 2022. contributor to gas supply security amid the energy crisis triggered
Portfolio players remained largely absent from new sale contracts in by Russia’s invasion of Ukraine.
IEA. CC BY 4.0.
PAGE | 55
Portfolio players’ net open position is set to widen further over the medium term
LNG portfolio players’ contractual position and contracted ratio, 2018-2026
IEA. CC BY 4.0.
Note: This graph represents the volumes signed by the end of June 2023.
IEA. CC BY 4.0.
PAGE | 56
Contracted volumes are set to increase marginally over the medium term
Based on firm contracts, the volume of total active contracts by around 70% between 2022 and 2026, solidifying the country’s
(including portfolio contracts) is expected to increase by about 10% position as the largest holder of firm import contracts. In contrast,
between 2022 and 2026. This represents a marked slowdown contracted volumes going to traditional Asian buyers, including
compared with the 2017-2021 period, when contracted volumes Japan and Korea, are decreasing gradually. Europe’s LNG import
surged by close to 40%. This slower increase in active contracts is contracts are set to decline by over 20% by 2026 compared with
reflective of lower LNG liquefaction capacity additions over the their 2022 levels, leaving the region at a greater exposure to spot
2022-2025 period and Qatar’s strategy of developing new market dynamics.
liquefaction capacity without securing long-term contracts in
Despite the recent increase in new destination-fixed contracts, the
advance.
share of destination-flexible volumes in primary 2 LNG export
On the export side, North America accounts for the bulk of contracts is set to rise from 34% in 2016 to 58% by 2026 as older
additional active contracts, with its volumes increasing by 60% destination-fixed contracts expire. The growing share of destination-
between 2022 and 2026. In contrast, active LNG contracts sourced free contracts, together with uncontracted capacity, is expected to
from Africa, the Middle East and Central and South America are set further increase the flexibility and liquidity of the global LNG market
to decline by 17%, 7% and 92% respectively upon expiry. over the medium term. Nevertheless, in the current market context,
Consequently, the share of the North America in total active where there is increasingly strong competition for LNG between
contracts is set to increase from 18% in 2022 to 26% by 2026, Europe and Asia, it is possible that destination-fixed contracts will
making it the largest source of active contracts ahead of the continue to gain traction. If sustained, this trend could weigh on the
Middle East and the Asia Pacific region. evolving liquidity and flexibility of the global LNG market.
On the import side, the Asia Pacific region’s share remains broadly
stable to 2026, accounting for more than half of import contracts.
Notably, China’s LNG import contract volumes are set to increase
2
Sourced directly from export project owners, as opposed to secondary volumes sold by portfolio
players.
IEA. CC BY 4.0.
PAGE | 57
North America is set to become the world’s largest source of active LNG export contracts
Total active LNG contracts, 2018-2026
IEA. CC BY 4.0.
IEA. CC BY 4.0.
PAGE | 58
Destination-flexible contracts and uncontracted capacity expand over the medium term
LNG supply capacity by destination flexibility (excluding portfolio contracts), 2018-2026
IEA. CC BY 4.0.
IEA. CC BY 4.0.
PAGE | 59
Contract expiry creates new marketing opportunities in the medium term

Approximately 150 bcm of active LNG contracts are set to expire 48 bcm) and Europe with a share of 24% (or 37 bcm). Nevertheless,
between 2023 and 2026, followed by an additional 120 bcm new contracts (primarily with China) together with contract renewals
between 2026 and 2030. will keep the Asia Pacific region’s total active contracts slightly
above their 2022 levels to the end of 2026. In contrast, Europe’s
On the seller side, the Middle East and the Africa are expected to
total active contracts are set to shrink by 22% between 2022 and
experience the greatest contract turnover in the medium term. Of
2026.
the total volume of export contracts expiring by 2026, they account
for 28% (over 40 bcm) and 25% (close to 40 bcm) respectively. The The expiry of legacy contracts creates an opportunity for market
Asia Pacific region has around 27 bcm of contracts expiring during participants to align contract terms more closely with buyers’ and
the same period. Contract renewals and newly signed contracts are sellers’ requirements in the years ahead, including on pricing
only partially offsetting the expiry of legacy contracts. Consequently, mechanisms and contracting period.
the Middle East is expected to see its firm contracted volumes
While LNG contracting has historically been dominated by oil
decline by 7% (or 12 bcm) between 2023 and 2026, while Africa
indexation, the adoption of more flexible contractual approaches,
sees a drop of 17% (or 14 bcm) over the same period. The Asia
such as gas-to-gas indexation, hybrid formulae and hub pricing, has
Pacific region’s total active contracts are set to decline by 3% (or
continued to gain ground in recent years. Based on available
4 bcm) by 2026. Contracts with multiple sources fall by 20 bcm
information, it is estimated that the share of oil-indexed LNG export
between 2023 and 2026, but new contracts from portfolio players
contracts fell from over 71% in 2016 to 59% in 2022. This has been
are exceeding the expired contract volumes to result in a net
largely supported by the expansion of LNG export capacity in the
increase of 4 bcm over the 2022 level.
United States, with most of the supply contracts indexed to Henry
On the buyer side, the Asia Pacific region, which is the largest Hub. Based on the firm LNG export contracts in place, the share of
holder of contracted purchase volumes, is expected to account for gas-to-gas indexation is set to increase from 41% in 2022 to close
almost 40% (close to 60 bcm) of expired contracts by 2026, to 45% by 2026.
followed by multiple destination contracts with a share of 33% (or
IEA. CC BY 4.0.
PAGE | 60
Around 150 bcm of LNG contracts are set to expire by 2026 and over 250 bcm by 2030
Expiring export volumes under active LNG contracts, Expiring import volumes under active LNG contracts,
2023-2030 2023-2030
IEA. CC BY 4.0.
IEA. All rights reserved.

PAGE | 61
On the export side, North America is driving growth in the number of gas-to-gas indexed
contracts
LNG export contract volumes with oil-indexed and gas-to-gas pricing, by region and country, 2018-2026
IEA. CC BY 4.0.
Note: Contracts not linked to a specific origin or destination have been excluded from the analysis.

PAGE | 62
Oil-linked pricing remains dominant in import contracts

LNG import contract volumes with oil-indexed and gas-to-gas pricing, by region and country, 2018-2026
IEA. CC BY 4.0.
Note: Contracts not linked to a specific origin or destination have been excluded from the analysis.

PAGE | 63
Global Gas Security Review 2023 Spotlight on natural gas storage
Spotlight on natural gas storage

PAGE | 64
The 2022 gas supply shock put natural gas storage in the spotlight
The global energy crisis triggered by Russia’s invasion of Ukraine The European Union adopted a new Gas Storage Regulation at
put the spotlight on natural gas storage and its regulation. Natural the end of June 2022 with a target storage fill level of 80% of
gas storage plays a key role in meeting seasonal demand swings capacity before the winter of 2022/23, and 90% ahead of all
and ensuring gas supply adequacy in markets with cold and following winter periods. Singapore introduced a standby LNG
temperate climates. For instance, storage withdrawals met over facility at the end of 2021 and in June 2022 the Energy Market
40% of EU gas demand during the coldest winter days in early Authority extended it until 31 March 2023 to address the risk of gas
December 2022 and late January 2023. In addition, the short-term supply disruptions. In Australia the East Coast Gas System
deliverability provided by fast-cycling storage sites (such as salt Framework was implemented in May 2023 in response to the
and rock caverns) is crucial to meet the fluctuating needs of the significant challenges experienced across east coast gas markets.
power sector through the year, especially in markets where coal- In Japan, METI is due to launch the Strategic Buffer LNG ahead of
fired generation is being phased out and reliance on gas-fired the 2023/24 winter.
power plants (and hence on natural gas) is increasing.
In an increasingly globalised gas market, storage regulations can
While storage sites are not the only providers of gas supply have extra-regional implications. This calls for closer international
flexibility, practical experience shows that they are typically the dialogue and improved transparency on storage regulations. The
most reactive in instances of supply and demand shocks. International Energy Agency carried out a survey on natural gas
Bringing additional volumes of LNG to the market usually takes at storage and its evolving regulatory frameworks across the members
least several days; piped imports can be ramped up more quickly, of the Task Force on Gas and Clean Fuels Market Monitoring and
but there is usually a limit in volumetric terms. In contrast, storage Supply and Security. The task force provides a platform for data
sites are typically located close to demand centres and hence are and information exchange among its members to further enhance
readily available to meet additional demand or to make up for lost transparency on natural gas markets. Over 20 countries and
supplies. Storage can therefore provide a significant security entities, representing 70% of global gas storage capacity
buffer to the gas and wider energy system. (underground and LNG storage combined), responded to the survey
on natural gas storage. A summary of the survey is provided in the
Since Russia’s invasion of Ukraine, more stringent storage
annex to this chapter.
regulations have been adopted across key natural gas markets.

PAGE | 65
Key natural gas storage policies and regulations initiated since February 2022
IEA. CC BY 4.0.

PAGE | 66
Global natural gas and LNG storage capacity is set to expand by 10% in the next five years
Global natural gas and LNG storage capacity in import markets capacity of UGS Strachocina is due to increase from 0.36 bcm to
is expected to expand by 10% (or 45 bcm) during the 2023-2028 0.46 bcm from the start of the 2023/24 winter season. In addition,
period, largely supported by projects in China, Europe and Eurasia. UGS Wierzchowice is set to be expanded from 1.3 bcm to 2.1 bcm
Underground gas storage (UGS) capacity is set to grow by over by 2025. In Bulgaria the working capacity of the Chiren storage site
35 bcm, with porous reservoirs (aquifers and depleted fields) is set to almost double from the current 0.55 bcm to 1 bcm by 2024.
accounting for more than 75% of total UGS capacity additions. LNG In Romania the Bilciuresti storage site will be enhanced, increasing
storage capacity associated with regasification terminals is its storage capacity from 1.31 bcm to 1.42 bcm and its daily
expected to increase by close to 10 bcm over the forecast period. withdrawal capacity from 14 mcm/d up to 20 mcm/d by 2027. In the
United Kingdom the Rough gas storage facility was reopened
China is expected to lead gas and LNG storage development in
ahead of the 2022/23 heating season with a capacity of 0.85 bcm,
the medium term. In March 2022 China released its 14th Five-Year
representing just 25% of its pre-closure capacity in 2017. The
Plan for a Modern Energy System, which sets a target to more than
working capacity of Rough is set to increase by 0.2-0.25 bcm ahead
double the country’s gas and LNG storage capacity to reach 55-
of the 2023/24 winter season. New FSRUs and the reopening of the
60 bcm by 2025. At the end of 2022 China’s working gas capacity
El Musel LNG terminal in Spain are set to add over 1 bcm of LNG
was estimated to be 18 bcm, accounting for just 5% of the country’s
storage capacity during 2023-2025.
annual consumption, well below the level in mature markets. Based
on projects under development, China could add 20 bcm of UGS In Eurasia underground storage developments are driven by
capacity in the coming years, accounting for more than half of Russia, with the country targeting an increase in its daily withdrawal
the increase globally. In addition, China has around 7 bcm of LNG capacity from 0.84 bcm in 2022/23 to 1 bcm. Storage additions are
storage capacity, with 5 bcm currently under construction. expected to be limited in other regions, with projects being
developed in Australia, Brazil and Iran. LNG storage capacity
Europe’s UGS capacity is set to increase over the forecast
additions outside China and Europe are expected to be driven by
period, largely driven by Türkiye. The Silviri storage site was
Korea, emerging markets in Asia, and Kuwait (in association with
expanded from 3.2 bcm to 4.6 bcm by the end of 2022 and the
the giant Al-Zour LNG import terminal).
Tuz Gölü (salt cavern) storage facility is set to increase its working
capacity from 1.2 bcm to 5.4 bcm by the end of 2023. In Poland the

PAGE | 67
China alone is expected to account for half of UGS capacity additions by 2028
Expected UGS capacity additions in key gas markets, Expected UGS capacity additions by type,
2022-2028 2022-2028
460
bcm
450
440
430
420
410 Salt caverns Porous reservoirs

2022 China Europe Eurasia Other 2028
regions
IEA. CC BY 4.0.
Sources: IEA analysis based on various company and news reports.

PAGE | 68
The European Union and its member states introduced mandatory fill targets in 2022
The European Union has just over 100 bcm of UGS capacity, can take effective measures to avoid security of gas supply
accounting for 25% of the bloc’s natural gas consumption in 2021. problems. The regulation allows member states to partially meet the
In addition, it has approximately 5 bcm of LNG storage capacity. storage targets by counting stocks of LNG or alternative fuels. In
Storage plays a key role in meeting EU member states’ seasonal member states with very large storage capacity compared to their
swing in gas demand and ensuring gas supply security during the domestic gas consumption, the filling obligation for UGS stocks is
winter season. limited to a volume corresponding to 35% of the average annual
gas consumption in that member state over the past five years.
In the aftermath of Russia’s invasion of Ukraine, the new EU Gas
Member states that do not have storage facilities on their
Storage Regulation was urgently developed and entered into force
territory should store 15% of their annual domestic gas
on 1 July 2022. The regulation provided that UGS on member
consumption in stocks located in other member states and thus
states’ territory must be filled to at least 80% capacity before the
ensure they have access to them. This mechanism strengthens the
winter of 2022/23 and to 90% before subsequent winter periods.
security of their gas supply while sharing the financial burden.
The regulation turned out to be key in achieving a 95% fill level by
1 November 2022. The regulation also provides for compulsory certification of all
UGS site operators by the authorities of the member states
Each year as of 2023 member states with UGS facilities submit to
concerned. The aim of this certification is to avoid the potential risk
the European Commission a so-called “filling trajectory” with
of external influence on critical storage infrastructure, which could
intermediate targets. The Commission then analyses the situation
jeopardise the security of the European Union’s energy supply and
and adopts an Implementing Regulation laying down the
other essential security interests. A fast-track certification procedure
intermediate storage filing targets that member states need to meet
is applied to storage sites with a capacity above 3.5 TWh that were
in order to reach the 90% storage target. The filling trajectories
filled at levels below the EU average in 2020 and 2021.
are subject to a margin of five percentage points and are monitored
by the national authorities, while member states are free to set a Storage capacity filling obligations will come to an end on
higher filling target. If there is substantial and sustained deviation 31 December 2025, but operator certification obligations will
from the filling trajectory or from the filling target, the Commission continue to apply beyond that date.

PAGE | 69
The EU’s new storage regulation sets a UGS fill target level of 90% by 1 November
Indicative filling trajectory targets in the European Union after 2022
100%
% of working storage capacity
80%
60%
40%
20%
0%
01-Feb 01-Mar 01-Apr 01-May 01-Jun 01-Jul 01-Aug 01-Sep 01-Oct 01-Nov
IEA. CC BY 4.0.
Source: IEA analysis based on European Commission (2022), Document 52022PC0135.

PAGE | 70
Japan is set to introduce the Strategic Buffer LNG ahead of the 2023/24 winter season
Japan has no large-scale UGS facilities due to the particular demand is high. In addition, regular monitoring of LNG inventory
topography of the country. The country has approximately 190 LNG levels held by power utilities is conducted in accordance with
storage tanks, with a combined nominal tank capacity of around guidelines prepared by the government.
9.6 million tonnes (or 13 bcm). It should be noted, however, that the
Japan has designated natural gas as a critical product that requires
entire capacity of LNG tanks cannot be used for storage due to
a stable supply under the Economic Security Promotion Act that
physical constraints and other factors. Hence, the storage capacity
was enacted in 2022. Under this new law, METI is to launch the
available to the market is somewhat lower than the declared
Strategic Buffer LNG (SBL) ahead of the 2023/24 winter season.
nameplate capacity. Power and gas utilities, which are the main
Under this system, METI will designate private operators with high
LNG users, hold their own commercial inventories equal to
LNG procurement capacity as companies authorised to handle SBL
approximately 10 days to 2 weeks of demand.
operations. In the event of a contingency that would hinder LNG
Considering that LNG can be stored only for a limited time (due to supply, the government will instruct the designated companies to
the ageing of LNG), 3 Japan follows a strategy of securing “reserves” sell their LNG cargoes to utilities in Japan facing the risk of supply
and “buffers” not only through physical storage, but also through disruption. The government will compensate the certified operator
a number of other mechanisms, relying on the flexibility options for any losses caused by the instructed trade.
available along the LNG value chain.
Furthermore, Japan has secured substantial LNG reserves by using
In response to the natural gas crisis unfolding in 2022, Japan public finance to acquire interests in overseas projects. Japan
reinforced its policies relating to gas supply security. In this considers that the use of public finance to acquire LNG concessions
context, a public–private liaison conference was held last year to and secure LNG under long-term contracts with flexible destinations
discuss LNG procurement, develop a framework for interoperator can be a beneficial mechanism for countries that, like Japan, are
flexibility, and require LNG users to systematically and steadily not rich in natural resources, have low energy self-sufficiency rates
secure inventories, especially during the winter months when and do not have oil majors.
3
Due to the boil-off of lighter molecules (methane and nitrogen), the composition of stored LNG
changes over time. The phenomenon is referred as the ageing (or weathering) of LNG.

PAGE | 71
The Strategic Buffer LNG provides a new LNG security framework with close co-operation from
the private sector
Simplified scheme of the functioning of Japan’s SBL
IEA. CC BY 4.0.
Note: JOGMEC = Japan Oil, Gas and Metals National Corporation.

PAGE | 72
Global Gas Security Review 2023
Spotlight on natural gas storage
Source: IEA analysis based on METI.

Australia implemented the East Coast Gas System Framework in May 2023
Australia has approximately 280 PJ (or 7.5 bcm) of natural gas more secure, resilient and flexible gas market on the east coast.
storage. Over 95% of the country’s storage capacity is in UGS sites, They include:
with over 70% of it located in the east coast market.
 The East Coast Gas System Framework, extending
The country’s storage capacity is expected to increase in the AEMO’s power to better manage gas supply adequacy and
coming years. The Iona UGS site operator, Lochard Energy, has reliability risks ahead of the 2023 southern hemisphere
informed the Australian Energy Market Operator (AEMO) of a winter.
planned upgrade to Iona’s storage capacity prior to the 2024  An agreement to examine options to implement a third-
southern winter. This upgrade (known as the Heytesbury party access regime for storage infrastructure.
Underground Storage Project) will increase the working capacity of
The East Coast Gas System Framework, implemented in May
the Iona storage site from 23.5 PJ (0.6 bcm) to 28 PJ (0.7 bcm)
2023, provides AEMO with the power to exercise direction or
and its withdrawal capacity from 520 TJ/d (13 mcm/d) to 570 TJ/d
trading functions to manage supply adequacy and reliability risks.
(14 mcm/d). In addition, the Golden Beach Gas Production and
The exercise of these powers may include, for example, directing a
Storage project (offshore site east of Melbourne) is currently being
storage service provider to inject or withdraw gas from a storage
considered. Subject to FID, the project is aiming to supply gas into
facility, or for AEMO to purchase services provided by a storage
the domestic market from H1 2025. The storage phase of the
provider. These powers are intended to be deployed as a last resort
project is planned to commence in 2026, with a capacity of 12.5 PJ
and AEMO’s ability to exercise these powers is constrained in a
(0.3 bcm) of gas and with an initial withdrawal capacity of 250 TJ/d
number of ways – for example, prior to issuing a direction, AEMO
(6 mcm/d).
must generally provide industry with time to mitigate risk.
Considering the significant challenges experienced across
In addition, under new rules implemented in December 2022,
Australia’s east coast gas markets during the 2022 southern
AEMO is required to contract any uncontracted capacity in the
hemisphere winter, Australian federal, state and territory energy
Dandenong LNG storage facility (0.015 bcm) ahead of winter
ministers agreed to take a range of actions aimed at supporting a
through the period 2023-2025.

PAGE | 73
Storage is a key contributor to supply flexibility during the southern hemisphere winter
Inventory levels at the Iona UGS facility, 2019-2023
0.6
bcm
0.4
0.2
0.0
IEA. CC BY 4.0.
Source: IEA analysis based on AEMO (2023), Gas Bulletin Board.

PAGE | 74
Annex: Natural gas storage capacity and regulatory frameworks in selected markets*
Total storage Strategic New
Country capacity storage capacity Regulatory framework
(bcm) (bcm) (bcm)
System operators are required to connect all UGS facilities within the country to the Austrian gas
network and offer gas storage capacity to the market, with non-compliance resulting in the loss of
the right to operate the facility. The legal basis for the Austrian strategic gas reserve (SGR) was
9 bcm 1.8 bcm implemented in April 2022. The entity in charge of the procurement of the SGR is the gas
Austria -
(UGS) (UGS) distribution area manager. The purchase (two tenders in 2022) was financed from the federal
budget. The SGR can only be released by ordinance of the energy minister to tackle an imminent or
existing disruption of energy supply or in case of an obligation to provide solidarity pursuant to
Art. 13 of Regulation (EU) 2017/1938.
0.11 bcm The East Coast Gas System Framework, implemented in May 2023, gives AEMO the authority to
7 bcm (UGS)
Australia (UGS by direct gas storage providers and purchase their services to ensure supply adequacy. For further
0.06 bcm (LNG)
2024) details please refer to the Australia section of this chapter.
Gas storage regulation is based on non-discriminatory third-party access, transparency and a
regulated tariff. In the course of 2022, regulated documents were amended to account for filling
0.7 bcm (UGS)
Belgium - - targets and trajectories, in line with the provisions of security of supply regulation (EU) 2017/1938.
0.3 bcm (LNG)
Belgian gas law modification to allow sales below the regulated tariff was agreed upon before the
start of the 2022 gas crisis.
Natural gas storage is regulated by provincial governments, which have largely chosen to
deregulate their gas markets to enable gas market participants to acquire, sell and store gas in
27 bcm (UGS) ways that best suit their commercial needs.
Canada - -
0.32 bcm (LNG) Canada’s federal government does not regulate natural gas storage. There are no government
support mechanisms to ensure natural gas storage fill levels in Canada. Canada’s integrated and
liquid gas markets have served to adequately fill gas storage before each winter heating season.
Booking of storage capacity is conducted through electronic auctions, with operators publishing
regular auctions on their electronic booking platforms. Since 2022 the Czech Republic has adopted
new regulations and rules, i.e. removal of transmission tariffs for entry/exit at interconnection points
to gas storage sites, and an obligation on gas traders to use booked gas storage capacity (use-it-or-
Czech 4 bcm 0.23 bcm
- lose-it rule) accompanied by the right of a gas trader to withdraw from storage contracts in force
Republic (UGS) (UGS)
within two months of the implementation of the rule. The country also introduced new reporting
obligations for unused storage capacity and compulsory gas withdrawal during extraordinary gas
emergencies, while the core of the gas storage regulation remains unchanged. In 2022 the
government subsidised gas stocks through premiums paid to gas traders for storing gas in their

PAGE | 75

(bcm) (bcm) (bcm)
facilities, and transmission tariff discounts at interconnection points to gas storage are still in effect
in 2023. No additional support mechanisms were introduced.
The Danish gas network operator Energinet is in charge of buying emergency gas and meeting filling
requirements. It buys emergency gas to ensure supplies to customers in case of a declaration of an
Denmark 0.9 bcm (UGS) emergency. Furthermore, Energinet buys filling requirements from actors who have bought capacity
- -
in Danish storage facilities. Under this mechanism, Energinet purchases a service from commercial
gas companies to hold a certain amount in storage. Energinet together with the authorities can decide
when to release this gas from storage (when encountering severe consumer supply issues).
The government imposes stockholding obligations on companies. Companies must store annually
by 1 April the amount of natural gas or LNG that corresponds to one-quarter of the amount of their
usage, retailing or reselling of natural gas or LNG during the previous calendar year. As part of the
implementation of the EU Gas Storage Regulation, the legislation on compulsory storage was
Finland 0.14 bcm (LNG) - -
temporarily amended. During the winters of 2022/23-2024/25, companies that 1) use natural gas
from a usage point connected to transmission network; or 2) retail natural gas to end users via the
transmission network, are obliged to store gas so that the requirements of the regulation are met at
a national level.
In 2018 the government implemented a regulation on essential UGS facilities to enable the build-up
of gas stocks before the beginning of winter. Essential storage sites are regulated by the French
energy regulatory agency (CRE). Essential storage capacity is sold to gas suppliers through an
auction system in which all gas suppliers are allowed to participate. The cost of essential gas
12 bcm (UGS) storage facilities are partially covered by transmission tariffs if auction revenues are insufficient. A
France - -
0.75 bcm (LNG) new mechanism was introduced in 2022 to secure the filling of essential storage sites, even in the
event of the collapse of a major gas supplier. The authorities define a minimal filling trajectory. In
the case that storage fill lags the defined minimal filling trajectory during the filling season, storage
operators are responsible for buying gas to constitute the missing stocks. The associated costs are
covered by the government budget. This new mechanism was not activated in 2022.
2.4 bcm
(UGS with Since 2022 the German Energy Act has set mandatory storage level requirements (90% by 1 Nov).
uncertain Strategic storage-based options and Trading Hub Europe ensure the market-based filling of storage
22.5 bcm (UGS) timeline) facilities. The government stimulates the market-based filling of storage facilities by tendering
Germany -
0.27 bcm (LNG) strategic storage-based options. Furthermore, storage capacity is taken from non-compliant storage
0.3 bcm users (that do not fill their capacity as required) and the injection of gas into this storage is ensure
(LNG by by the market area manager Trading Hub Europe.
2024)

PAGE | 76

(bcm) (bcm) (bcm)
The Act on Gas Supply sets an obligation on wholesale gas suppliers responsible for the supply of
residential consumers to store a certain amount of their customers’ consumption. For instances of
gas supply disruption, there is also a regulation requiring the establishment, maintenance and
6.5 bcm utilisation of strategic gas stocks, which are held by a Central Stockholding Entity (HUSA).
Hungary 1.9 bcm -
(UGS) UGS on Hungary’s territory must be filled to at least 80% of its capacity before the winter of 2022/23
and to 90% before the following winter periods, with specific intermediate targets for 2022. The
filling obligation for underground stocks is limited to a volume corresponding to 35% of the average
annual gas consumption over the last five years (about 3.1 bcm).
UGS operators’ revenues are regulated by the National Regulatory Authority for Energy (ARERA)
and the capacity allocation mechanism is decided by the Ministry of Environment and Energy
17.5 bcm 0.2 bcm Security, which issues a decree every year. Third-party access is allowed and each operator has to
4.2 bcm
Italy (UGS) (LNG) refer to the Storage Code (supervised by ARERA), which regulates all storage activities. In 2022 the
(UGS)
0.36 bcm (LNG) (by 2024) government introduced temporary measures to guarantee 90% inventory levels by the start of the
2022/23 heating season. This included “contracts for difference” and introduced the designation of a
“last resort storage filler” (GSE).
Japan has designated natural gas as a critical product that requires a stable supply under the
Japan < 13 bcm (LNG) - - Economic Security Promotion Act. Under this new law the Strategic Buffer LNG will be launched
ahead of the 2023/24 winter. For further details please refer to the Japan section of this chapter.
Businesses importing LNG for self-consumption are required to possess stocks corresponding to
30 days of planned natural gas consumption, while LNG wholesalers are required to possess a
2.5 bcm
Korea 7.8 bcm (LNG) - stockpile of LNG based on the average LNG consumption of the corresponding seasons in the
(LNG)
two previous years, equivalent to nine days of consumption. No changes have been introduced
since the 2022 gas crisis.
The regime for negotiated third-party access is implemented through the Dutch Gas Act. Measures
regarding safe operation of storage sites and permitting for gas storage sites are implemented
13 bcm (UGS) through the Dutch Mining Act. A support scheme compensates, if necessary, any negative
Netherlands - -
0.4 bcm (LNG) summer–winter spread. No subsidy had to be paid in 2022. The state-owned company Energie
Beheer Nederland (EBN) has the task of filling the gas storage site at Bergermeer with a certain
amount of gas in the instance that this is not done by market participants.
New Gas storage regulation is not separated from the regulation of other subsurface and production
0.2 bcm (UGS) - -
Zealand assets. Gas storage is based on commercial arrangements between gas industry participants.

PAGE | 77

(bcm) (bcm) (bcm)
0.1 bcm Mandatory stocks are maintained by the Government Agency for Strategic Reserves, by entities
(UGS by trading natural gas with foreign countries and entities importing natural gas into Poland for their own
2024) needs. During the declaration of a state of emergency, the gas system operator, in co-operation with
0.1 bcm the entities obliged to maintain mandatory stocks, are required to take measures to ensure the proper
3.3 bcm (UGS)
Poland (LNG by functioning of the gas system. The transmission system operator releases mandatory stocks in the
0.18 bcm (LNG)
2024) quantities necessary to balance the gas system. The volume of the mandatory stock is 1.34 bcm. In
0.8 bcm addition, the transmission system operator purchases balancing gas stocks, which are stored in UGS
(UGS by facilities. The reserves held for storage purposes are not to be used for system balancing purpose in
2025) non-emergency situations.
Decree-Law No. 62/2020 of 28 August 2020 established the organisation and operation of the
0.05 bcm
national gas system. It places the obligation on suppliers in the market regime and last-resort
(UGS by
suppliers to maintain security reserves to guarantee supply to their customers. Ministerial Order
2028)
0.35 bcm (UGS) No. 59/2022 of 28 January 2022 defines the minimum security reserves of all non-interruptible
Portugal -
0.23 bcm (LNG) consumption. It establishes that these reserves must correspond to 45 days of average annual
0.05 bcm
consumption of protected customers and 16 days of consumption equivalent to the maximum capacity
(UGS by
of non-interruptible CCGT. It also establishes the obligation to create and maintain an additional
2029)
reserve during the period from 1 October to 31 March of the following year (maximum 0.06 bcm).
All suppliers with natural gas end users must maintain a certain level of security stocks in UGS,
proportional to the amount of natural gas each supplier sells to its respective end users, and
expressed in equivalent days of demand. Each supplier must maintain a total of 27.5 days of
equivalent demand split between: 1) 10 days of strategic stocks; 2) 10 days of minimum operational
stock of the system; and 3) 7.5 days of minimum operational stock of the user.
In addition, from 1 November to 31 March the "Winter Action Plan" applies, which requires shippers
0.17 bcm to increase their LNG storage to reach staggered filling milestones with a maximum on 1 January
3.1 bcm (UGS)
Spain (LNG by reaching a target of 5.5 days of their contracted capacity at the entry points to the transmission
1.85 (LNG)
2023) system.
Suppliers who are obliged to maintain minimum security stocks do not have to bid in the auction for
the sale of storage capacity, but rather it is assigned to them directly. Therefore, they only have to
pay the storage toll. From 1 April 2022 to 31 March 2024 contracted storage capacity in excess of
20 days of capacity booked at the entry points to the transmission system will not pay the storage fee
(only injection and withdrawal tariffs). The public budget will transfer EUR 23 million/year to the gas
system as compensation.

PAGE | 78

(bcm) (bcm) (bcm)
There is no strategic gas storage or regulatory framework apart from EU legislation on securing
supply to protected customers. There will from June 2023 be a requirement that the gas operators
0.01 bcm (UGS) responsible for system balancing also take on responsibility for ensuring sufficient gas storage
Sweden
0.03 bcm (LNG) filling, should the gas transmission system operator demand it. The gas system operators
responsible for balancing should be able to have their costs for obligatory filling reimbursed through
network tariffs.
The gas sector must guarantee that 15% of annual average Swiss gas consumption is stored in
Switzerland - - -
available gas storage (in the European Union) by 1 November 2023.
4.8 bcm Under the Natural Gas Market Law, the Energy Market Regulatory Authority (EMRA) determines the
5.8 bcm (UGS)
Türkiye - (UGS by level of gas that importers are required to store relative to the amount of their annually imported
0.4 bcm (LNG)
2023) gas, up to 20% of the total.
The energy regulator in Great Britain, Ofgem, is responsible for ensuring compliance with the
requirements of the Third Internal Energy Package, as transposed into domestic legislation, relating
United 2.3 bcm (UGS) to gas storage. This includes ensuring compliance with third-party access arrangements and
- -
Kingdom 0.7 bcm (LNG) unbundling. There is no strategic gas storage in the United Kingdom nor any government support
mechanisms available for gas storage filling.
United 130 bcm (UGS) The US government neither holds strategic reserves of natural gas nor places a minimum natural
- -
States 2.5 bcm (LNG)* gas stockholding obligation on industry.
* The information provided in this annex is based on the survey carried out by the International Energy Agency among members of the Task Force on Gas and Clean Fuels Market
Monitoring and Supply and Security.

PAGE | 79
Global Gas Security Review 2023 System integration of low-emission gases
System integration of low-emission gases

PAGE | 80
Low-emission gases play a key role in the pathways to net zero emissions by 2050
The decarbonisation of gas and the broader energy system will availability of storage options and more complex linepack
require the deployment and scale-up of low-emission gases. management.
Low-emission gas streams include biomethane, low-emission
Existing natural gas infrastructure can play a key role in enabling
hydrogen, e-methane, and natural gas subject to carbon capture,
the more rapid and cost-effective deployment of low-emission gases
utilisation and storage (CCUS) both at the production and at the
while facilitating their integration into the broader energy system.
end-use stage. In recognition of the growing interest of member,
association and non-member countries in low-carbon gases, the In this section we focus on two key dimensions of the future
IEA Secretariat developed a Low-Emission Gases Work integration and application of low-emission gases:
Programme (LEGWP) to provide regular market analysis, including
• Large-scale storage: low-emission gas production facilities
on the evolving network integration and supply flexibility of low-
(biogas upgraders, steam methane reformer [SMR] plants
emission gases.
and electrolysers) have either flat or volatile supply patterns
As highlighted in the IEA’s Global Gas Security Review 2021 – especially when produced from variable renewables. This
edition, the large-scale integration of low-carbon gases is expected limited operational flexibility necessitates the development
to transform existing gas systems in a number of ways: and use of large-scale storage facilities to enable low-
emission gases to respond to seasonal demand swings and
• Gas supply chains become more complex and
short-term supply–demand fluctuations.
increasingly decentralised, necessitating intimate integration
between distribution and transmission networks. • Maritime transport: international maritime transport is
considered to be a hard-to-abate sector. Liquefied low-
• Gas quality displays greater diversity and variability,
emission gases are widely acknowledged as likely to play a
raising issues related to the interoperability of adjacent gas
key role in the decarbonisation of the shipping sector in the
systems and the integration of methane and hydrogen
medium to long term. In addition, the existing LNG carrier
networks.
fleet could be repurposed to facilitate the transport of certain
• Gas supply flexibility is altered by the operational liquefied low-emission gases.
characteristics of low-carbon production facilities, the

PAGE | 81
Low-emission gases naturally lead to a more complex gas system
Simplified scheme of existing Simplified scheme of low-emission

natural gas value chain gas value chains
IEA. CC BY 4.0.
Notes: SMR = steam methane reformer; SNG = synthetic natural gas or synthetic methane.

PAGE | 82
Underground storage plays a critical role in unleashing biomethane’s full potential

Biomethane production plants display limited daily variability In Europe almost 60% of biomethane plants are connected to
and seasonality as facilities typically operate close to nameplate the distribution grid, while fewer than 20% feed directly into the
capacity through the year. The rather minor contribution of transmission system. In contrast, underground storage facilities are
biomethane plants to meeting the variability in overall gas demand typically connected to the high-pressure transmission system.
is well demonstrated in Denmark. While biomethane accounted for Reverse flows from the distribution grid to the transmission
33% of total gas demand in 2022, biomethane plants alone network would allow low-carbon gases to access underground
contributed just 9% of the seasonal demand swing between storage facilities. Bidirectional compressor stations are key to
summer 2022 and winter 2022/23. Moreover, the cumulative enabling closer integration between distribution and transmission
variability of daily biomethane production was less than 6% of the systems. Currently Europe has 10 operational bidirectional
absolute cumulative daily variability of gas demand in 2022, compressor station, with over 20 more under construction.
indicating a proportionally lower contribution to the overall
In contrast with natural gas, biomethane typically contains
requirement for gas supply flexibility.
oxygen (around 3 000 ppm), mainly as a consequence of the
The production flexibility of biomethane plants could be enhanced in desulphurisation process during its production. Initial research
two ways: (1) incentivise investment in “buffer” capacity, indicates that this oxygen content could potentially negatively
although the relatively complex and rigid supply chains of raw impact the effectiveness of storage in porous reservoirs and
biogas could be a limitation; and (2) provide biomethane plants with eventually lead to the disruption of storage operations (due to
greater access to underground storage sites. sulphur precipitation). Given the unique features of each
underground storage site, the permissible oxygen content needs to
Biomethane is well-suited to being stored in underground facilities
be assessed on a case-by-case basis. The Danish Gas Technology
due to its physical and chemical properties being almost identical to
Centre found limited corrosion risk in salt caverns, while noting the
natural gas. Nevertheless, the access of biomethane plants to
risk of microbial contamination and higher corrosion risk in aquifers.
underground storage sites might be limited by: (1) insufficient
Oxygen removal units – at the biogas upgrader, on the gas grid or
integration between the gas transmission and distribution systems;
at the entrance to the storage facility – could improve the
and (2) the oxygen content of biomethane.
acceptance of biomethane at underground storage sites.

PAGE | 83
Biomethane production plants display limited short-term variability and seasonality

Daily natural gas demand and biomethane production in Denmark, October 2021-March 2023
14
mcm/d
12
10
0
Nov-21
Dec-21
Feb-22
Nov-22
Dec-22
Feb-23
May-22
Jul-22
Aug-22
Sep-22
Oct-21
Oct-21
Oct-22
Apr-22
Jan-22
Mar-22
Jun-22
Jan-23
Mar-23
Biomethane production Natural gas demand
IEA. CC BY 4.0.
Source: IEA analysis based on Energinet (2023), Energi Data Service.

PAGE | 84
The first open seasons for hydrogen storage were launched in Europe in 2023
Underground storage will be crucial for hydrogen to reach its seasons are typically divided into binding and non-binding phases.
full potential as an energy carrier and respond to the evolving The binding phase is concluded through the conclusion of long-term
flexibility requirements of a more complex energy system. capacity contracts between the project developer and market
Considering that low-emission hydrogen production facilities (SMR participants. The long-term capacity contract effectively functions as
plants or electrolysers) have either flat or volatile supply patterns, a risk-sharing mechanism and ensures that the project developer’s
storage will be critical in responding to the short-term variability of initial investment costs are recovered through the payment of tariffs
both hydrogen supply and demand. In contrast with biomethane, associated with the storage service provided. In France,
pure low-emission hydrogen storage in underground storage Géométhane launched a non-binding open season from 1 February
facilities will require either the repurposing of current assets or the to 15 March 2023 to assess interest in hydrogen storage in two salt
development of new facilities suited to serving hydrogen. caverns (with a total capacity of 200 GWh) located in Manosque. No
results of this non-binding open season have been disclosed to
Hydrogen storage in salt caverns is a proven technology and has
date. In the Netherlands, HyStock held an open season from
been used by the petrochemical industry since the early 1970s. The
15 June to 14 July 2023, offering market participants the ability to
United Kingdom has one operational hydrogen salt cavern facility
reserve capacity in its A5 hydrogen salt cavern (216 GWh). The first
with a capacity of 25 GWh, commissioned in 1972 on Teesside.
salt cavern is expected to be commissioned in 2028.
Based on public project announcements, over 4.5 TWh of
Three additional hydrogen caverns could be developed soon after
underground hydrogen storage capacity could be developed in
2030, depending on market interest.
Europe by 2030 (translating into around 1.5 bcm in volumetric
terms). However, none of these projects has yet reached FID, with In contrast with salt caverns, there is no practical experience of
most of them either at the conceptual phase or undergoing storing pure hydrogen in porous formations. In April 2023 the
feasibility studies. Considering the long lead times of these projects, Underground Sun Storage 2030 project was launched in Austria to
immediate action needs to be taken on hydrogen storage, requiring demonstrate the storage of pure hydrogen (~4.2 GWh) in a former
a concentrated effort among key stakeholders and policy makers. natural gas reservoir. Interdisciplinary technical-scientific
investigations are to be carried out until 2025 to assess the initial
In 2023 several open seasons have been launched to assess
results of hydrogen storage in the porous formations.
market participants’ interest in underground storage capacity. Open

PAGE | 85
European hydrogen storage development will require stakeholders to make concentrated efforts
Underground hydrogen storage capacity development in Europe by 2030
2022
2030
0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500

GWh
Operational Close to FID Feasibility study Concept stage
IEA. CC BY 4.0.
Sources: IEA analysis based on project announcements.

PAGE | 86
Liquefied low-emission gases are expected to be central to decarbonising the maritime sector
International maritime transport is heavily dependent on emission- Efficiency eXisting ship Index (EEXI) to determine their energy
intensive oil derivatives (including very low sulphur oil, heavy fuel oil efficiency, and their annual operational Carbon Intensity Indicator
and diesel). Oil products account for 99% of the total fuel consumed (CII) and associated CII rating. Carbon intensity links the GHG
in this sector today, and the industry is responsible for about 2% of emissions to the amount of cargo carried over the distance
global energy-related CO2 emissions. It faces major decarbonisation travelled. The CII rating threshold will become stricter over time and
challenges. With large, heavy vessels carrying cargo over long will therefore determine the annual carbon reduction factor needed
distances, it is both a hard-to-electrify and a hard-to-abate sector. to ensure compliance. Each vessel will receive a grade from A
Current standard marine fuels are easy to handle and store, but (good) to E (poor). Ships with a poor grade must put a corrective
emit climate and local air pollutants (including CO2, PM and NOx). action plan in place. The EEXI is based on the ship's specifications,
While scrubber systems and LNG could offer near-term reductions not on its actual operating performance. EEXI is a one-off look at
in local pollutant emissions to meet increasingly stringent the technical or design efficiency of a vessel, while CII will require
regulations, it is widely recognised that other low-emission, non- demonstrable reductions in operational carbon intensity.
fossil fuel-based fuels have a critical role to play in decarbonising
One of the main short-term measures to comply with EEXI
the shipping sector.
regulations is to reduce speed and fuel consumption, using engine
The United Nations’ International Maritime Organization (IMO) is the power limitation or shaft power limitation. The benefits of speed
main regulatory body of the shipping industry. The IMO has set a reduction from an environmental point of view depend on several
target to reduce the carbon intensity of international shipping by elements, such as the size and type of vessel, the number of annual
40% by 2030 and at least 50% by 2050 versus the 2008 levels. To round trips and the applicable carbon tax status. The impact of the
this end, it is crucial that the IMO's ongoing work towards the CII is expected in 2024, as in 2023 shipowners are consolidating
adoption of a “well-to-wake” metric – which includes emissions tracking data for each of their vessels, which will serve as the basis
relating to every stage in a fuel’s life cycle, from production to final for the first CII A–E rating.
consumption – is successfully completed, to accurately measure the
In addition to this international regulatory framework, individual
impact of fuels on climate and health. The IMO’s further regulatory
countries may include targets for shipping in their national mitigation
measures came into force in January 2023, with the introduction of
plans, and some regional initiatives have imposed more stringent
two ratings: ships are required to calculate their attained Energy
rules and regulations. For example, in a new climate plan and for

PAGE | 87
the first time ever, in 2024 the European Union will extend its biomethane (LBG), low-emission hydrogen, methanol, ammonia
emissions trading system (ETS) to cover CO2 emissions from ships and liquefied e-methane (e-LNG).
and, from 2026, two other GHGs – methane (CH4) and nitrous oxide
Each of these fuels has its own advantages and challenges. With
(N2O). In the same spirit, the IMO is discussing a carbon tax, the
low NOx, SOx and PM emissions, LNG as a marine fuel meets all
revenues from which could be used to subsidise technologies or
IMO and more stringent local emission regulations, is readily
fuels to decarbonise the sector. All these regulations will have a
available and uses proven technology. The use of LNG requires
significant impact on the design and operation of all ships. Other
specific engines with dedicated fuel management systems and
initiatives focus squarely on shipping fuel and aim to increase the
greater fuel storage space. LNG bunkering infrastructure is
demand for renewable and low-carbon fuels. As part of the EU’s Fit-
developing rapidly at the world’s major hubs. As a result, LNG is
for-55 package, the FuelEU Maritime regulation promotes the use of
currently the most popular alternative fuel choice. However,
renewable and low-carbon fuels on ships with a gross tonnage
uncertainties exist over future LNG prices, and upstream methane
above 5 000 travelling to, from or at berth in EU ports, by setting
leaks and onboard methane slip are damaging to the environmental
requirements to gradually reduce the carbon intensity of marine
footprint of LNG from a “well-to-wheel” perspective. As they are
fuels. It starts with a 2% reduction by 2025 compared with 2020
chemically the same, LNG can be blended with or completely
levels, reaching up to an 80% reduction by 2050.
replaced by renewable LBG in the short term or by e-LNG
To reduce carbon emissions and improve fuel efficiency, vessel (produced from low-emission hydrogen and captured carbon
owners and operators have several options, including: dioxide) in the longer term. However, the availability of feedstock,
and resulting implications on cost, are of concern when it comes to
• Operational optimisation.
meeting expected demand in the marine sector.
• Modernisation of vessels with energy-saving technology.
• Switching to low-emission fuels. Thanks to its air quality benefits, methanol is gaining momentum
because it meets current emission regulations. Moreover, it is easy
To reach these ambitious decarbonisation targets, a combination of
to handle (it can be stored at ambient temperature and pressure)
all these options will be needed. The following paragraphs focus on
and can be used in dual fuel 4 engines. Fossil methanol is produced
the options provided by alternative marine fuels, including liquefied
from natural gas. “Green” methanol, either produced from biomass

4
Diesel/methanol or Residual Fuel Oil (RFO)/methanol.
PAGE | 88
(bio methanol) or from carbon dioxide and hydrogen produced from 35% of the volumetric energy density of LNG. As liquid hydrogen
renewable electricity (e-methanol), is becoming increasingly requires more space to store the fuel onboard, it is unsuitable for
popular. Methanol nevertheless presents a few disadvantages, long, transoceanic trips. Lastly, liquefaction is quite energy
including a low volumetric energy density (around 35-40% of LNG), intensive.
which has an impact on the storage system, and the absence, for
From the perspective of technological readiness, supply availability
the time being, of a large-scale distribution network.
and infrastructure, LNG seems to be the most pragmatic option
Other alternative fuels, such as low-emission ammonia produced chosen by the industry to reduce emissions. However, the
through the Haber-Bosch process and low-emission hydrogen skyrocketing gas prices observed in 2022, security of supply and
produced through electrolysis, SMR or gasification with CCS, are growing awareness about methane emissions along the whole
emerging as long-term solutions. They are attracting significant supply chain have made other solutions, such as liquid biofuels or
investment into the development of technologies. Of all the options methanol, more attractive. Infrastructure for fuel availability at ports
listed, these are the only two fuels that have no direct CO2 is an urgent concern for the maritime industry. Bunkering
emissions. Already produced and traded at scale, ammonia can be technologies exist for LNG and are therefore ready for LBG and, in
produced from the catalytic reaction of N2 from air with H2 from time, for e-LNG. In contrast, there is no commercial bunkering
water. However, the current Haber-Bosch production process is infrastructure for ammonia or hydrogen yet, although the Global
highly energy intensive, ammonia has a low volumetric energy Maritime Forum recorded more than 50 ongoing ammonia
density (around half that of LNG), and it is above all corrosive and demonstration projects as of May 2023, as well as almost
toxic. This has implications for onboard and port storage, monitoring 50 hydrogen projects. The use of ammonia and hydrogen as a
(to ensure there are no lethal leaks) and bunkering. It also has an marine fuel would also require the development of a whole new fleet
impact on the ships’ layout (location of fuel tanks), and requires of specialised vessels. Improvements to safety are ongoing, as
double piping, among other measures. Potentially clean and seen recently on the world's very first liquid hydrogen transporter,
abundant, hydrogen is notoriously difficult to store safely at built by Kawasaki. The potential pathways to the initial
significant quantities. The typical solution is to store the hydrogen in demonstration and commercialisation of ammonia and hydrogen are
a liquid form at -253°C, achieved with a complicated refrigeration already underway and could materialise before 2030.
system and highly sophisticated insulation. Liquid hydrogen has the
worst volumetric energy density, after methanol and ammonia, with

PAGE | 89
The future marine shipping market is based on multiple, more diversified fuels
World fleet, Order book

Vessels in operation by fuel Vessels on order by fuel
Conventional Conventional
937 526 LNG
fuels + fuels +
Battery/Hybrid Battery/Hybrid
99.4% 85% LPG
1,304 184 769 91
130 Methanol
156
27 22 Hydrogen
IEA. CC BY 4.0.
Sources: IEA analysis based on DNV’s Alternative Fuels Insights for the shipping industry – AFI platform data as of 9 July 2023.
Disclaimer: The positions or views stated in such document are solely those of the author and do not necessarily represent the views of DNV and/or the third-party data owner.

PAGE | 90
The number of ships running on alternative fuels on order for delivery by 2028 is rising sharply
Growth in the use of alternative fuels in the world fleet, 2003-2028
1 500
Number of vessels
1 000
500
-
2003 2008 2013 2018 2023 2028
LNG LPG Methanol Hydrogen
IEA. CC BY 4.0.
Note: LNG carriers are not included in the LNG figures.

Sources: IEA analysis based on DNV’s Alternative Fuels Insights for the shipping industry – AFI platform data as of 9 July 2023.
Disclaimer: The positions or views stated in such document are solely those of the author and do not necessarily represent the views of DNV and/or the third-party data owner.

PAGE | 91
Global Gas Security Review 2023 Annex
Annex

PAGE | 92
Summary table
World natural gas consumption and production by region and key country (bcm)
Consumption Production
2020 2021 2022 2023 2024 2020 2021 2022 2023 2024
Africa 161 169 164 168 173 241 262 247 253 264
Asia Pacific 834 891 877 901 940 626 651 659 670 680
of which China 325 367 364 387 414 189 205 218 229 240
Central and South America 142 153 150 144 147 150 148 152 145 149
Eurasia 584 634 608 609 622 866 961 868 792 819
of which Russia 460 501 473 475 485 692 762 672 610 625
Europe 576 609 524 489 499 230 222 230 220 221
Middle East 547 562 575 588 603 669 692 713 726 744
North America 1 079 1 091 1 145 1 143 1 136 1 145 1 183 1 230 1 250 1 260
of which United States 868 874 921 919 911 954 984 1020 1040 1048
World 3 924 4 109 4 043 4 042 4 120 3 927 4 119 4 099 4 056 4 137

PAGE | 93
Regional and country groupings

Africa – Algeria, Angola, Benin, Botswana, Cameroon, Congo, Democratic Middle East – Bahrain, the Islamic Republic of Iran, Iraq, Israel,8 Jordan,
Republic of the Congo, Côte d’Ivoire, Egypt, Eritrea, Ethiopia, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, the Syrian Arab
Gabon, Ghana, Kenya, Libya, Morocco, Mozambique, Namibia, Republic, the United Arab Emirates and Yemen.
Nigeria, Senegal, South Africa, Sudan, United Republic of
North Africa – Algeria, Egypt, Libya, Morocco and Tunisia.
Tanzania, Togo, Tunisia, Zambia, Zimbabwe and other countries
and territories.1 North America – Canada, Mexico and the United States.
1 Individual data are not available and are estimated in aggregate for: Burkina Faso, Burundi, Cape
Asia Pacific – Australia, Bangladesh, Brunei Darussalam, Cambodia,
Chinese Taipei, India, Indonesia, Japan, Korea, the Democratic Verde, the Central African Republic, Chad, Comoros, Djibouti, Equatorial Guinea, Gambia, Guinea,
Guinea-Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Niger, Reunion,
People’s Republic of Korea, Malaysia, Mongolia, Myanmar, Rwanda, Sao Tome and Principe, Seychelles, Sierra Leone, Somalia, Swaziland and Uganda.
Nepal, New Zealand, Pakistan, the People’s Republic of China,2 2 Including Hong Kong.
the Philippines, Singapore, Sri Lanka, Thailand, Viet Nam and 3 Individual data are not available and are estimated in aggregate for: Afghanistan, Bhutan, Cook
other countries and territories.3 Islands, Fiji, French Polynesia, Kiribati, the Lao People’s Democratic Republic, Macau (China),
Maldives, New Caledonia, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste,
Central and South America – Argentina, Bolivia, Brazil, Chile, Colombia, Tonga and Vanuatu.
Costa Rica, Cuba, the Dominican Republic, Ecuador, El 4 Individual data are not available and are estimated in aggregate for: Antigua and Barbuda, Aruba,
Salvador, Guatemala, Haiti, Honduras, Jamaica, Netherlands Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Falkland
Antilles, Nicaragua, Panama, Paraguay, Peru, Trinidad and Islands (Malvinas), French Guyana, Grenada, Guadeloupe, Guyana, Martinique, Montserrat, St
Tobago, Uruguay, Venezuela and other countries and territories.4 Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Suriname and Turks and Caicos Islands.
5 Note by the Republic of Türkiye.
Eurasia – Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, the The information in this document with reference to “Cyprus” relates to the southern part of the
Russian Federation, Tajikistan, Turkmenistan and Uzbekistan. Island. There is no single authority representing both Turkish and Greek Cypriot people on the
Island. The Republic of Türkiye recognises the Turkish Republic of Northern Cyprus (TRNC). Until
Europe – Albania, Austria, Belarus, Belgium, Bosnia and Herzegovina, a lasting and equitable solution is found within the context of the United Nations, The Republic of
Bulgaria, Croatia, Cyprus,5,6 the Czech Republic, Denmark, Türkiye shall preserve its position concerning the “Cyprus issue”.
6.Note by all the European Union Member States of the OECD and the European Union
Estonia, Finland, the Former Yugoslav Republic of North
The Republic of Cyprus is recognised by all members of the United Nations with the exception of
Macedonia, France, Germany, Gibraltar, Greece, Hungary, Türkiye. The information in this document relates to the area under the effective control of the
Iceland, Ireland, Italy, Kosovo,7 Latvia, Lithuania, Luxembourg, Government of the Republic of Cyprus.
Malta, the Republic of Moldova, Montenegro, the Netherlands, 7 The designation is without prejudice to positions on status, and is in line with the United Nations
Norway, Poland, Portugal, Romania, Serbia, the Slovak Security Council Resolution 1244/99 and the Advisory Opinion of the International Court of Justice
Republic, Slovenia, Spain, Sweden, Switzerland, Republic of on Kosovo’s declaration of Independence.
8 The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli
Türkiye, Ukraine and the United Kingdom.
authorities. The use of such data by the OECD and/or the IEA is without prejudice to the status of
European Union – Austria, Belgium, Bulgaria, Croatia, Cyprus,5,6 the Czech
the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of
Republic, Denmark, Estonia, Finland, France, Germany, Greece,
international law.
Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the
Netherlands, Poland, Portugal, Romania, the Slovak Republic,
Slovenia, Spain and Sweden.

PAGE | 94
Abbreviations and acronyms

AEMO Australian Energy Market Operator GX Green Transformation programme (Japan)
ANP National Petroleum Agency (Brazil) HH Henry Hub
ARERA National Regulatory Authority for Energy (Italy) HoA Head of Agreement
BMC Colombian Mercantile Exchange (Colombia) IEA International Energy Agency
CCGT combined cycle gas turbine ICE Intercontinental Exchange
CCUS Carbon Capture, Utilisation and Storage ICIS Independent Chemical Information Services
CII Carbon Intensity Indicator IEA International Energy Agency
CME Chicago Mercantile Exchange (United States) IMO International Maritime Organization
CNE National Energy Commission (Chile) JKM Japan Korea Marker
CQPGX Chongqing Petroleum Exchange (the People’s Republic of JODI Joint Oil Data Initiative
China)
JPY Japanese yen
EBN Energie Beheer Nederland
KEEI Korea Energy Economics Institute
EEXI Energy Efficiency eXisting ship Index
LBG liquefied biomethane
EIA Energy Information Administration (United States)
LEGWP Low-Emission Gases Work Programme
EMRA Energy Market Regulatory Authority (Republic of Türkiye)
LNG liquefied natural gas
ENARGAS National Gas Regulatory Entity (Argentina)
METI Ministry of Economy, Trade and Industry (Japan)
ENTSOG European Network of Transmission System Operators for Gas
MoU Memorandum of Understanding
EPIAS Energy Markets Operations Inc. (Republic of Türkiye)
MME Ministry of Mines and Energy (Brazil)
EPPO Energy Policy and Planning Office (Thailand)
NBP National Balancing Point (United Kingdom)
EU European Union
NDRC National Development and Reform Commission (the People’s
EUR Euro Republic of China)
FID final investment decision OCCTO Organization for Cross-regional Coordination of Transmission
FLNG floating liquefied natural gas Operators (Japan)
FSRU floating storage and regasification unit OECD Organisation for Economic Co-operation and Development
GHGs greenhouse gases ONS National Electric System Operator (Brazil)
GIE Gas Infrastructure Europe OSINERG Energy Regulatory Commission (Peru)
PPAC Petroleum Planning and Analysis Cell (India)

PAGE | 95
RFO Residual Fuel Oil

SBL Strategic Buffer LNG
SMR steam methane reforming/reformer
SNG synthetic natural gas
SPA Sales and Purchase Agreement
TFFS Task Force on Gas and Clean Fuels Market Monitoring and
Supply and Security
TTF Title Transfer Facility (the Netherlands)
UGS underground storage
USD United States dollar
y-o-y year-on-year
Units of measure
bcf billion cubic feet
bcf/d billion cubic feet per day
bcm billion cubic metres
bcm/yr billion cubic metres per year
GJ gigajoule
GW gigawatt
kWh kilowatt hour
MBtu million British thermal units
Mt million tonnes
Mt/yr million tonnes per year
m3/hr cubic metres per hour
m3/yr cubic metres per year
Nm3 normal cubic metre
ppm parts per million
TWh terawatt hour
t/yr tonnes per year

PAGE | 96
Acknowledgements, contributors and credits

This publication has been prepared by the Gas, Coal and Power The IEA Communication and Digital Office (CDO) provided
Markets Division (GCP) of the International Energy Agency (IEA). production and launch support. Particular thanks go to Jethro
The analysis was led and co-ordinated by Gergely Molnár. Louis Mullen and his team: Poeli Bojorquez, Astrid Dumond, Grace
Chambeau, Carole Etienne, Gergely Molnár and Takeshi Furukawa Gordon, Julia Horowitz, Oliver Joy, Isabelle Nonain-Semelin, Oscar
are the main authors. Padula, Charner Ramsey, Clara Vallois and Therese Walsh.
Keisuke Sadamori, Director of the IEA Energy Markets and Security Justin French-Brooks edited the report.
(EMS) Directorate, provided expert guidance and advice. The report
The report was made possible by assistance from Tokyo Gas.
benefitted from the review of senior management, including Tim
Gould, Chief Energy Economist and Dennis Hesseling, Head of The individuals and organisations that contributed to this report are
Gas, Coal and Power Markets Division. not responsible for any opinion or judgement it contains. Any error
or omission is the sole responsibility of the IEA.
Amalia Pizarro (HAF) provided guidance on hydrogen storage.
Elizabeth Connelly, Laurence Cret and Jacob Teter provided For questions and comments, please contact GCP ([email protected])
guidance on low-emission fuels in the maritime sector. Eren Cam, or Gergely Molnár ([email protected]).
Carlos Fernandez Alvarez and Hiroyasu Sakaguchi provided
support.
The report benefitted from the survey carried out across the
members of the Task Force on Gas and Clean Fuels Market
Monitoring and Supply and Security on natural gas storage and its
evolving regulatory frameworks.
Timely and comprehensive data from the Energy Data Centre were
fundamental to the report.

PAGE | 97
Annex
International Energy Agency (IEA)
Typeset in France by the IEA – July 2023
This work reflects the views of the IEA Secretariat but does not Cover design: IEA
necessarily reflect those of the IEA’s individual member countries or Photo credits: © Shutterstock
of any particular funder or collaborator. The work does not
constitute professional advice on any specific issue or situation. The
IEA makes no representation or warranty, express or implied, in
respect of the work’s contents (including its completeness or
accuracy) and shall not be responsible for any use of, or reliance
on, the work.
Subject to the IEA’s Notice for CC-licenced Content, this work is

licenced under a Creative Commons Attribution 4.0 International
Licence.
This document 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.
Unless otherwise indicated, all material presented in figures and
tables is derived from IEA data and analysis.
IEA Publications
International Energy Agency
Website: www.iea.org
Contact information: www.iea.org/about/contact

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Global Gas Security

European hydrogen storage development will require stakeholders to

Executive summary – Towards a New Global Gas Market

Natural gas markets moved towards a gradual rebalancing in H1 2023

Demand reductions played a key role in the softening of market fundamentals

Natural gas supply Natural gas demand*

Y-o-y change in bcm

and cold winter prompts

40 Slower economic growth, Higher LNG supply

Lower LNG supply

October November December January February March Threshold for heightened

LNG became a new baseload supply for the European market

The share of China in active LNG contracts (2010-30)

Sources: IEA analysis based on ICIS (2023), ICIS LNG Edge.

Gas market update and short-term forecast

Monthly natural gas consumption, Gas consumption by sector,

2022 2023 Y-o-y change (%)

Healthy hydro availability depressed gas-fired generation in Brazil in H1 2023, leading to a

Y-o-y change in LNG imports (bcm)

Asian gas demand is expected to recover by 3% in 2023, supported by lower prices

Total US gas (bcf/d)

80 95 Other dry shale

In 2024 global LNG trade growth is expected to moderate to 4% (or

Source: IEA analysis based on ICIS (2023), ICIS LNG Edge.

Global LNG market growth is expected to moderate to 4% in 2024

-200 Central and South America

Source: IEA analysis based on ICIS (2023), ICIS LNG Edge.

TTF Henry Hub Asian spot LNG

Five-year range Five-year average 2022/23

LNG contracting and flexibility update

Update on LNG contracting trends

Change in LNG imports

Change in LNG supply

Source: IEA analysis based on ICIS (2023), ICIS LNG Edge.

Sources: IEA analysis based on various public statements.

On the export side, contracting activity was dominated by the

On the import side Asian buyers continue to play a dominant role,

Long-term agreements continue to dominate the contracting landscape

Destination-flexible contracts accounted for half of the volumes contracted in 2022

Portfolio players: Key enablers of market flexibility and liquidity

LNG portfolio players’ contractual position and contracted ratio, 2018-2026

Source: IEA analysis based on ICIS (2023), ICIS LNG Edge.

LNG supply capacity by destination flexibility (excluding portfolio contracts), 2018-2026

Source: IEA analysis based on ICIS (2023), ICIS LNG Edge.

Contract expiry creates new marketing opportunities in the medium term

Source: IEA analysis based on ICIS (2023), ICIS LNG Edge.

IEA. All rights reserved.

IEA. All rights reserved.

Oil-linked pricing remains dominant in import contracts

IEA. All rights reserved.

Spotlight on natural gas storage

IEA. All rights reserved.

IEA. All rights reserved.

IEA. All rights reserved.

IEA. All rights reserved.

410 Salt caverns Porous reservoirs

Sources: IEA analysis based on various company and news reports.

IEA. All rights reserved.

IEA. All rights reserved.