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1、Global Gas Report 2023ForewordGlobal Gas Report 20233We are pleased to present the 2023 edition of the Global Gas Report,which offers a significant perspective on the evolution of the global gas markets amidst a historical global energy crisis.This crisis has been unfolding in parallel with the ener

2、gy transition towards a more sustainable future,as the world has struggled to align with the decarbonisation goals outlined in the Paris Agreement.Global emissions grew in 2022 with coal related emissions reaching an all-time high,due to gas to coal switching amidst the gas price and supply crunch.I

3、n 2022,the global gas markets experienced shifts demonstrating remarkable flexibility and exceptional resilience,in the face of unprecedented shocks from supply and demand sides.These shocks included the conflict between Russia and Ukraine,which exacerbated to the extreme the already tight global su

4、pply situation and drove gas prices to the highest ever recorded,as the supply of Russian pipeline gas to Europe dropped,causing a pressing search for additional imports to the continent.The unaffordable prices were detrimental to many developing countries,especially in South Asia,who suffered painf

5、ul energy supply shortages and prolonged blackouts.Nevertheless,by September 2023,European storage levels exceeded required capacity,thanks to expanded import infrastructure,massive additional LNG inflows,and increased production of domestic natural gas.While Europes commendable rapid development of

6、 new infrastructure and efficient utilisation of existing gas networks has been critical in rebalancing the regional situation,we should not forget that it does not eliminate the lingering supply risk,as global gas supply remains just as constrained.Undoubtedly,we saw greater focus on energy securit

7、y by governments,energy companies,and financial institutions,with investments in infrastructure for source diversification and alternative energy sources.This helped to establish a new equilibrium in the gas market,although it remains unstable and seems already challenged by the new conflict in the

8、Middle East between Israel and Hamas.We are also continuing to witness a high level of uncertainty in energy supply planning for 2030 and beyond.The substantial discrepancies in major energy and gas demand and supply outlook scenarios have introduced a significant level of risk into the gas markets

9、going forward,raising questions about the necessary investments to achieve a more stable equilibrium.We delve into this issue in-depth in the report,exploring the ranges of variability across different scenario assumptions and their implications for supply security in the future.Li YalanPresident,IG

10、UMartin OpdalPartner Consulting,Rystad EnergyStefano VenierChief Executive Officer,SnamWe emphasize that the prolonged period of low investment in the development of natural gas resources over the past decade has been a major factor contributing to the current supply shortage.To achieve balance in t

11、he market and to ensure affordability,sustainability,and security of supply,new investments in natural gas are required,alongside investments in low carbon gaseous energy,including renewable natural gas,hydrogen and carbon capture and storage.As we think about how much gas we will need in the coming

12、 decades,we mustnt forget about the emerging regions of the world where population and energy needs are quickly growing.The huge economic engines of the most populous countries in the world,China,and India,still rely heavily on coal,and the gas crisis contributed to an upward trajectory of its use.A

13、frica is the fastest growing region of the world with the youngest population,600 million of which lacks access to power while many others are faced with unstable energy systems and weak infrastructure that require reinforcement for any energy transition to happen.Importantly,while natural gas will

14、continue to play a pivotal role in the energy transition facilitating the decarbonisation of the global economy,the gas sector itself will also undergo a process of decarbonisation.This is imperative,and we call for an acceleration in the deployment of carbon capture,low-carbon,and renewable gases.W

15、e also stress that doubling down on the elimination of methane emissions is required to make this transition possible.Realising these ambitions will require collaboration within the gas industry and,importantly,the implementation of appropriate policy tools and frameworks,including emission pricing,

16、the removal of barriers to deployment,and access to finance.To this end,this years report explores future pathways for natural gas,low-carbon,and renewable gases to drive the energy transition,in conjunction with the increasing share of renewable energy and storage technologies.Amongst the pathways,

17、we underscore the critical importance of energy conservation and efficiency to minimise demand,with numerous readily available opportunities to pragmatically reduce gas consumption without hurting the economy.Finally,as we have seen in a clear case example last year when it saved Europe,LNG is a cri

18、tical energy source that is flexible,abundant,and efficient.The report includes a highlight section on the role of LNG in delivering essential energy transition flexibility now and in the future,as it will become increasingly necessary in a decarbonised world,while also progressing to decarbonising

19、the fuel.So,we emphasize that only gas investments capable of demonstrating their future-proofing and excellence in reducing methane emissions are likely to succeed.Today more than ever,the world requires comprehensive energy planning to achieve a better balance between security,sustainability,and a

20、ffordability,because when security and affordability are compromised,sustainability fades out of focus.Hence,balancing this trilemma is essential for the global energy transition to take place and to achieve the deep emissions reduction necessary in the fight against climate change.We invite you to

21、delve into this report and explore the future pathways for the gas industry,learning how gas will continue to provide the assurance of sustainable,secure,and affordable energy for the world.Global Gas Report 20234ForewordContentsExecutive summary 61/Review of the most turbulent year in the history o

22、f gas 12 Highlights 13 Developments in gas demand 15 Supply and gas investments 19 Trade flows 21 Pricing 30 Emissions 34 Development trends of low carbon gases 38 The historical evolution of energy policy priorities through the energy trilemma lens 412/Looking to 2030 and beyond-assessing the assum

23、ptions aboutfuture gas demand and outlook 45 Highlights 46 Uncertainty in future gas demand scenarios 47 Natural gas investments still crucial in the long term 50 Most scenarios call for higher natural gas production 51 Future balances of trade flow 53 Addressing uncertainties in future gas policies

24、 55 Case study:Role of gas in Chinas energy transition 58 3/Natural gas and low carbon gases in the energy transition 61 Highlights 62 Gas decarbonisation framework 63 Energy and gas demand conservation considerations 64 Gas as flexible and dispatchable source of power 65 Case study:Future role of d

25、ispatchable sources in renewable grids 67 Case study:The use cases for BESS systems 68 Capacity assurance mechanisms demanded for energy stability and reliable power grids 70 Possibilities with renewable and low carbon gases 71 Reutilising natural gas-fired power generation infrastructure for low ca

26、rbon gases 76 Critical role of gas in heavy industries 76 Transiation of the building sector 78 Methane emission reduction initiative 804/LNG as a critical conduit for an orderly energy transition 82 Highlights 83 The role of LNG in future energy systems 84 Small-scale LNG for increased energy acces

27、sibiity 84 Flexible LNG to balance out troughs 86 Repurposing exisiting LNG infrastructure for clean and low carbon alternatives 88Global Gas Report 20235Executive SummaryThe energy trilemma has come into sharp focus when the world was reminded that energy security and affordability are necessary to

28、 stay on the course of the energy transition.Prior to the crisis,the policy focus was positively on sustainability;however,it was also deprioritising security and affordability,as those two seemed to be assured at the time,until they returned to become the priority in 2022.As evidenced by growing co

29、al use and emissions,sustainability cannot be fully realised without the pillars of security and affordability,and therefore all three need to be in balance.Natural gas,low carbon,and renewable gases are crucial contributors in this sense,as they enable development and industrialisation in developin

30、g regions,enhance sustainability by addressing air quality problems from coal use,make the grids more resilient to support massive scale-up of renewables,and foster competitive industry decarbonisation.For regions looking to transition to renewables in the short term,gas and its infrastructure serve

31、 as key flexible and dispatchable sources tackling long-term intermittency,enhancing the reliability of grids.Global gas demand decreased by 1.5%in 2022 compared to 2021,with large declines in Europe 2022 became the most turbulent year in the history of the gas industry,marked by unprecedented suppl

32、y and price shocks.In 2023,as supply remains tight and demand outlook uncertain,the market entered an“unstable”equilibrium,remaining highly sensitive to any movements on either supply or demand side.Global Gas Report 20236Figure 1:Global gas demand,split by regionSource:Rystad EnergyFigure 2:Global

33、gas demand sector year-on-year change,split by region(2021 2022)Source:Rystad Energy27%28%26%28%23%23%24%24%14%15%15%15%14%14%14%12%11%11%12%11%4%4%4%4%4%4%4%4%1%1%1%1%3,9313,8364,0553,99505001,0001,5002,0002,5003,0003,5004,0004,5002019202020212022North AmericaAsiaMiddle EastEuropeRussiaAfricaSouth

34、AmericaAustraliaBcm49532-10-19-23-66-80-60-40-200204060North AmericaAfricaMiddle EastAustraliaSouth AmericaAsiaRussiaEuropePowerIndustrialResidentialOthersCommercialHeatTransportationFuel GasBcmand Asia offset by strong growth in North America.Falling demand in the regions hit hardest by the energy

35、crisis persisted during H1 2023 and was primarily driven by industrial slowdown and decreased heating demand caused by a mild winter in the northern hemisphere.Although global demand dropped by 1.5%in 2022,regional demand destruction was a lot more pronounced.Europes gas demand decreased by almost 1

36、2%in 2022 year-on-year,in response to the supply and price shocks coming on the heels of the Russia-Ukraine war.The good luck of a very mild 2022-23 winter was a major contributor to Europes reduced gas demand,together with significant losses in industrial demand,gas to coal switch,and renewables up

37、take.Spikes in international spot LNG prices caused the demand in Asia to fall by 18 Bcm(1.9%)in 2022 compared to 2021.Significant demand destruction also happened in South Asia,where the price of LNG became unaffordable,causing switching to coal wherever possible and leading to shortages and blacko

38、uts.For instance,Pakistan and Bangladesh saw a 12%and 15%reduction in gas demand,respectively.On the contrary,North American gas demand grew by 4.8%or 49 Bcm year-on-year in 2022,a notable increase driven primarily by increased gas-fired power generation as well as residential and commercial applica

39、tions.The North American market prices remained largely isolated and affordable,due to its predominantly regional nature with domestic production.Looking at 2023,from January to August,the European Union(EU)saw a cumulative gas consumption decrease of roughly 10%year-on-year(both an effect from indu

40、strial slowdown and the EUs intentional switch from gas to other energy sources),while China saw gas demand grow by 5.4%year-on-year during H1 2023.Global gas production in 2022 stayed flat in comparison to 2021 with a marginal 8.3 Bcm uptick,which is less than a 0.5%increase year-on-year.The first

41、half of 2023 saw a mild revival in global gas supply,yet the final annual result remains uncertain.Looking back at 2022,curtailment of Gazproms output in Russia was offset by supply growth in North America,which grew from 1,160 Bcm to 1,213 Bcm,and in the Middle East,which grew from 670 Bcm in 2021

42、to 687 Bcm in 2022.In Europe,incremental production in 2022 largely came from Norway,which has been maximising output (7%growth year-on-year)to increase exports to the rest of the continent.In Asia,gas production rose modestly from 696 Bcm in 2021 to 712 Bcm in 2022,driven mainly by higher productio

43、n in China and Central Asia.By contrast,Africa experienced falling gas production of 1%(2.9 Bcm)between 2021 and 2022.2022 witnessed unparalleled turmoil in gas prices.Since late 2021 gas prices had been elevated and volatile,and trade balances tight.Executive summaryGlobal Gas Report 20237The comme

44、ncement of the war in Ukraine in 2022 created a perfect storm causing gas prices to rise to the highest record ever,as the world struggled to allocate the scarce gas supply.Gas prices experienced multiple record spikes after the onset of the war and triggered a cascade of geopolitical and energy sec

45、tor responses.The situation was further impaired with the explosion of the Nord Stream pipeline in September 2022.The peak gas price was seen in late August 2022,when prices reached an all-time high as the Netherlands-based Title Transfer Facility(TTF)closed at around 90 USD/MMBtu and Asian spot LNG

46、 prices surged past 60 USD/MMBtu.Asian prices consistently traded below the TTF,thanks to a combination of factors that includes fluctuating demand due to Covid-19-related lockdowns in China,price-induced demand contraction in the south,southeast regions,and fuel-switching.Gas prices have cooled in

47、2023,largely due to demand-side adjustments in Europe and Asia,yet they remain above pre-covid and pre-energy crisis levels.The shortage of global supply,which was the key reason behind last years shocks,is still there:the market is in a state of a fragile and unstable equilibrium.This cooling has b

48、een driven by demand contraction,marginal supply growth and infrastructure debottlenecking.Nonetheless,Europes growing dependence on LNG has rendered global gas prices increasingly vulnerable to global LNG supply risk,as shown during recent price movements due to the strikes in Australia.At the time

49、 of writing,the new development,and the Figure 3:International gas prices020406080100120Jan-19Mar-19May-19Jul-19Sep-19Nov-19Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22Jul-22Sep-22Nov-22Jan-23Mar-23May-23Jul-23Sep-23Henry HubLNG Northeast AsiaTTF2022Onse

50、t of Russia-Ukraine war heightens concerns over Russian pipeline supplyReports of sabotage on the Nord Stream pipelines and threats to energy infrastructure as Europe roiled under concurrent heatwavesUSD(real)per MMBtuSource:Rystad Energy;Argus(LNG Northeast Asia)ongoing escalation of the conflict i

51、n the Middle East is sparking further price volatility and tension in the market,highlighting once again how in a general context of tight markets,gas hub prices are highly sensitive to geopolitical turmoil and supply dynamics.LNG has been crucial in navigating through the gas market crisis,playing

52、a key role in offsetting the shortage in Europe,with trade growing by 4%.Over H1 2023,global LNG exports saw a 4.1%year-on-year increase,despite volatilities due to facility maintenance and outages during the Northern hemisphere summer months.In the context of the globally tight LNG supply,while it

53、was instrumental in keeping the lights on in Europe,the unaffordable prices left some countries in Asia in the dark.In 2022,Europes natural gas imports shifted from Russian pipelines towards LNG leading to a 69%increase in its LNG imports,reaching 124 million tonnes(169 Bcm)and making Europe the big

54、gest importing market,absorbing a significant share of the global LNG volume by outbidding other customers.Roughly two thirds of the additional volumes(30 million tonnes)came from the United States.In Asia,China reduced LNG imports from Australia and the United States by a total of 21 million tonnes

55、,while it increased imports from Qatar by approximately 7.4 million tonnes.In September 2023,there was disruption in gas supply from Australia due to rolling strikes,work bans and stoppages at the Gorgon and Wheatstone LNG facilities,potentially affecting around 5%of global LNG production,impacting

56、volatility and level of international gas price indexes.Executive summaryGlobal Gas Report 20238Total global energy CO2 emissions in 2022 continued an upward trajectory with a 1.1%yearly growth,reaching another record.Emissions from combustion of natural gas saw a minor decline in 2022,totalling abo

57、ut 7.2 giga-tonnes CO2-e,partly attributed to price spikes which incentivised gas-to-coal and gas-to-oil switching.An all-time high in emissions from coal was reached at about 16.8 giga-tonnes of CO2-e,despite worldwide initiatives to diminish dependency.2022 and 2023 continued the decade-long trend

58、 with coal having a 40%share of global power sector emissions,while Figure 4:Global energy emissions,split by energy sourceSource:Rystad Energy40%39%39%39%39%40%40%36%36%35%35%34%34%34%16%17%17%17%18%18%17%8%8%8%8%9%9%9%40,00440,84541,81541,98239,92541,56242,02905,00010,00015,00020,00025,00030,00035

59、,00040,00045,00050,0002016201720182019202020212022CoalLiquidsGasOthersMegatonnes CO2 eq.Figure 5:Global carbon pricing mapETS and carbontax implementedETS or carbon tax under consideration/developmentETS implemented other pricing under consideration/developmentETS implementedCarbon tax implementedCa

60、rbon tax implemented,ETS under consideration/developmentAustralia(Safeguard Mechanism):11 USD/tCO2eEU ETS:60 USD/tCO2eUSAs Carbon Tax:12 30 USD/tCO2e*No federal carbon tax but some states impose their own taxesCanadas Carbon Tax:48 USD/tCO2e*125 USD/tCO2e by 2030Argentina s Carbon Tax:3 USD/tCO2eChi

61、les Carbon Tax:5 USD/tCO2eSource:Rystad Energy;World Bankthe global economic engines and major energy consumers like China and India increased their coal usage and approved new coal plants to mitigate energy security risks.Coal usage growth shows the importance of stability in global gas markets in

62、minimising emissions.In H1 2023,lower gas prices,nuclear recovery,and power production from renewable energy sources have reduced coal consumption and emissions,especially in Europe.Analysis of future potential trajectories of global gas demand from a wide range of existing energy transition outlook

63、s towards 2030 and beyond reveals unprecedented uncertainty and illustrates that continued investments in the natural gas value chain are needed to cope with natural supply decline,global demand dynamics,and likely growth in several regions.Gas demand scenarios have important implications for policy

64、 decisions,as the supply will need to be developed ahead of demand.For this reason,comprehensive and balanced energy planning is needed to avoid further supply crises.Otherwise,the required natural gas supply may not be developed to meet demand resulting in heightened emission levels and increasing

65、frequencies of blackouts.Restoring a sustainable balance in the global gas market is imperative and requires addressing the existing supply shortfall,an outcome of a prolonged under-investment period.Investment levels in gas supply development have been reduced by 58%in the period between 2014 and 2

66、020,and only started to marginally recover in 2021.Without additional injections,the current total existing and approved Global Gas Report 20239Figure 6:Global gas demand scenarios from various institutions versus operational,approved and discovered assets(2010 2050)101,0002,0003,0004,0005,0006,0002

67、01020152020202520302035204020452050AbandonedProducingUnder developmentDiscoveryNet Zero(2022)Announced Pledges(2022)RystadEnergy2.2-degrees RystadEnergy1.9-degrees RystadEnergy1.6-degrees Stated Policies(2022)IEEJReference CaseRystadEnergy1.5-degrees BcmSource:IEA;IEE Japan;Rystad Energygas producti

68、on level is expected to reach about 4,100 Bcm in 2023.These output volumes are projected to decline to about 3,100 Bcm in 2030 due to asset maturation and natural decline.The projection indicates a further decline to 1,850 Bcm in 2040,followed by a decrease to just under 1,000 Bcm in 2050.Amidst the

69、 energy transition targets and shifting supply dynamics,decarbonisation policies have been disproportionately focused on the supply side,while energy conservation and demand-response have been overlooked as powerful tools for emissions reduction through reducing overall energy usage.Proactive demand

70、 management planning will promote a more efficient use of energy and simultaneously reduce tightness of the global gas market by reducing gas demand in an economically and industrially sustainable way,while efforts to bolster supply through optimisation must occur in parallel.These actions can impro

71、ve resource availability,shore up energy security,and stabilise the energy landscape.Measures fall into“preventive”and “reactive”categories,respectively managing consumption proactively and responding swiftly to periods of resource constraints or grid stress.The acceleration of low carbon gaseous en

72、ergy is an essential building block of the energy transition.Abated natural gas with CCUS,green and blue hydrogen(including derivatives like clean ammonia),biomethane and e-methane,will play an increasingly significant role in an achievable and just transition,offering a viable decarbonisation optio

73、n in Executive summary1 All historical and forecasted values are scaled to be identical in 2022 to account for different heating and caloric assumptions.Global Gas Report 202310many applications such as power generation,reactant/feedstock need,heating,and heavy transport,provided they are accessible

74、 in sufficient quantities and are cost-effective.During the transition,blending can be performed between methane and low carbon and renewable gases,to reduce emissions.Although there is momentum in low carbon and renewable gas supply growth,reinforced significantly by the energy crisis and ambitious

75、 new energy transition policies,the scale of current supply projects remains minimal in contrast to the pressing need to accelerate production and infrastructure availability.At the end of 2022,the global supply capacity of low carbon hydrogen stood at 3.2 million tonnes per annum(MTPA),with most of

76、 the capacity coming from blue hydrogen,and biomethane stood close to 7 Bcm.However,recent policy introductions,such as the Inflation Reduction Act(IRA)in the United States and the European hydrogen bank,have improved the economic viability of all hydrogen types,supporting the acceleration of desire

77、d hydrogen supplies.Europe and the United States maintain their leading positions in biomethane production,producing about 6.1 Bcm combined as of September 2023 Europe has ambitions to increase biomethane production to 35 Bcm by 2030,compared to 2021 level of around 3.5 Bcm.Meanwhile,Chinas biometha

78、ne capacity buildout has fallen short of projections.CCUS is expected to grow sevenfold,from around 50 MTPA in 2023 to 370 MTPA by 2033.The growth of renewable energy sources within the power mix is directly correlated with a growing need for reliable,dispatchable,and flexible capacity resources to

79、balance grids during periods of renewable energy sources intermittency.Gas-fired generation is a critical source of long-duration flexibility,as opposed to short-term balancing which can be effectively delivered through batteries.Gas is the most cost-effective grid resilience resource,and high renew

80、able energy sources capacity additions will likely require pairing with gas-fired generation capacity to maintain grid security.The level of gas-fired generation would vary,based on the pace of the energy transition in different countries and regions.Emerging economies,such as those in Africa where

81、general energy poverty is still high,and in Asia where coal plants still dominate,gas presents a stable and sustainable alternative to energise economies while lowering the carbon intensity of the grids.When these countries move towards adoption of intermittent renewable energy sources,their grids c

82、an also be balanced with dispatchable gas generation.In Africa,even regions with high levels of access have weak and unstable grids,frequently suffering from outages.These electricity grids would require additional reinforcement and flexible capacity to integrate large-scale renewables without riski

83、ng a collapse.China is the largest energy consumer in the world and is expected to remain a natural gas demand powerhouse,as gas represents a key pillar of its decarbonisation policy-forecasting that gas imports will make up a significant share of its future gas needs.In 2022,natural gas represented

84、 8%of Chinas energy mix while coal supplied 56%of the countrys energy consumption.China plans to increase natural gas share in its energy mix significantly.Natural gas power generation is expected to increase alongside renewable energy generation,from 0.3 PWh hours in 2022 to 0.6 PWh in 2030 and 0.8

85、 PWh in 2040.The additional gas-fired capacity acts as a backup and dispatchable energy source in the event of a shortage of renewable power generation,enabling China to call on a stable source of energy with quick ramp-up capability.Chinas existing gas-fired power generation capacity of 115 GW is p

86、rimed to nearly triple by 2040 to 330 GW,which will equal to around 380 Bcm of gas per annum.Figure 7:Clean hydrogen cumulative capacity by status,including pre-FID projects(2010 2030)2Source:Rystad EnergyExecutive summary0510152025303540455020102015202020252030OperationalFID/Under ConstructionPre-F

87、IDMillion tonnes of Blue/Green H22 Most blue and green hydrogen capacities are located in China,Saudi Arabia,and the United States of which approximately 96%involve green hydrogen.One-third of the pre-FID pipeline is blue hydrogen,which signals a call for further natural gas demand.Given the substan

88、tial size of the pre-FID pipeline and the gradual pace of FID decisions,the progress of low carbon hydrogen projects has been relatively slow.Executive summaryEffective capacity assurance mechanisms will be imperative to sustain a rapid and orderly energy transition,requiring planning and market att

89、ributes to promote the stability of electrical grid development.Capacity mechanisms,akin to insurance for grid stability,are designed to ensure adequate supply being available to meet demand peaks.Short-term capacity mechanisms compensate electricity generators for being available in reserve and on-

90、call,even if not always operational.Long-term mechanisms can involve central planning and procurements,or market-based capacity auctions to secure investment for future supply in anticipation of demand growth needs.The latter is particularly important because of the long lead time required for build

91、ing new electricity generation and network infrastructure that cannot react quickly enough to real-time market signals.LNG has unmatched scalability and flexibility,which makes it fundamental as a critical global enabler of resiliency through the energy transition.The surging share of renewable ener

92、gy coming through the energy transition will intensify the need for responsive and dispatchable balancing sources,with natural gas,and low carbon and renewable gases playing a key role for long intermittency and peak periods(while batteries are expected to fulfil most of the balancing needs for shor

93、ter duration periods).In addition to the dispatchable characteristics of natural gas,its conversion to LNG introduces scalability and Global Gas Report 202311accessibility.The dynamic distribution modes of LNG,centring primarily around shipping,but also increasingly trucks in smaller-scales,function

94、 as virtual pipelines,supplying developing regions and remote areas where piped gas is not a viable option.This often reduces emissions and improves air quality due to the replacement of higher-emitting sources like coal and gasoil.The flexibility of LNG has been displayed on numerous occasions-part

95、icularly during the war in Ukraine,when the United States increased its exports to Europe by 159%from 2021 to 2022.LNG is effective at democratising energy in developing regions and in remote areas with scarce natural resources.The adoption of small-scale LNG(ssLNG)bears lower capital investments an

96、d shorter lead times,offering new opportunities for the gas producing areas of the world.New infrastructure investments should be designed to ensure compatibility with low carbon and renewables gases.Future proofing investments in gas and LNG infrastructure will ensure project longevity,guaranteeing

97、 long-term asset use in parallel with the growing adoption of low carbon and renewable gases.For instance,biomethane and synthetic methane can be liquified and can leverage existing natural gas infrastructure.The potential of utilising existing LNG infrastructure for liquid hydrogen carriers like am

98、monia or liquid hydrogen is gaining traction with rising investments and R&D efforts.1/Review of the most turbulent year in the history of gasGlobal gas demand was 3,995 Bcm in 2022,having decreased by about 60 Bcm or 1.5%year-on-year,mainly due to prices spiking.The first half of 2023 saw mixed dem

99、and signals with growth mainly driven by the United States and China,offsetting major declines in Europe and other parts of East Asia.In 2022,reduced Russian supply,amidst an already tight market which was set in 2021,led to record price hikes causing increasing fuel switching and industrial shutdow

100、ns,thereby reducing demand.Growth in renewable energy and a dip in gas use for heating and cooling thanks to milder weather conditions in 2022 further reduced overall gas demand.1/Review of the most turbulent year in the history of gasHighlights Global gas production in 2022 was relatively flat,incr

101、easing by about 8.3 Bcm or less than 0.5%.The first half of 2023 saw a mild revival in the global gas supply,yet the net result of the year is still uncertain.The flat development in 2022 was primarily driven by significant reductions of about 87.2 Bcm in Russian gas production,offset by substantial

102、 increases in North America of about 53.1 Bcm.Global Gas Report 2023132022 brought about a seismic shift in the global gas market,predominantly due to the dramatic reduction of Russian pipeline gas exports to Europe.Gas prices in Europe and Asia soared to historic highs,with a significant surge in E

103、uropean LNG demand pushing prices above those of Asian benchmarks,thereby establishing them as the highest ever recorded worldwide.Domestically,at the wholesale level,natural gas prices were at historic highs in all regions except North America and Russia.2022 proved to be a year that would leave a

104、lasting mark on the gas sector,with trends continuing into September 2023.The global gas market has sustained through the 2022 emergency and is now in the second half of 2023 entering into a phase of unstable equilibrium prices remain elevated and highly fragile,but much lower than what was observed

105、 in 2022.In this chapter,we delve into the developments that unfolded from the second quarter of 2022 until September 2023,offering a comprehensive overview and analysis of the forces at play and their impact on the global gas market.Table 1:Key year-on-year changes in global gas market from 2021-20

106、22Source:Rystad EnergyBcm66.110.42.623.3%changeEuropeNorth AmericaSouth AmericaAfricaMiddle EastRussiaAustralia4.6%3.1%0.4%2.916.987.22.4%4.6%2.5%0.4%0.91.81.7%13.5%7.1%13.15.50.70.6%5.0%3.2%ConsumptionProductionGross importsGross exportsRegions18.92.0%Bcm%change11.9%16.449.46.6%Bcm%changeBcm%change

107、5.21.73.3%4.9%8.653.14.10.738.8%5.6%3.8%2.8%1.1%12.3%59.011.5%0.2%0.02.935.9%7.7%59.86.734.2%79.81.66.4%AsiaWorld0%1.5%8.30.1%0.90.1%3.9%33.214.58.17.046.5%6.786.4In 2022,gas prices reached unprecedented levels and exhibited extreme volatility,with the TTF and LNG Northeast Asian peaking at around 9

108、0 USD/MMBtu and 60 USD/MMBtu respectively.Although volatility has toned down in 2023,the TTF still registers roughly three times higher average prices and five times higher average volatility compared to pre-covid and pre-energy crises levels in 2019.There was a visible deviation between gas prices

109、in some regions due to infrastructure constraints in moving the gas from abundant areas to those in demand.The soaring gas prices seen in 2022 inflicted severe damage on numerous sectors,resulting in industrial shutdowns,economic downturns,and power blackouts,with the consequences still being felt i

110、n September 2023.Gas prices remain fragile with limited supply coming on stream in the coming years.While low carbon gases are still small in scale,growth has been improving,albeit still falling significantly behind the needed decarbonisation trajectory.Thus,aggressive action is required to scale up

111、 the supply of low carbon gases if the said targets are to be met.Globally,policies have been improving the economic viability of all hydrogen types,although green hydrogen is generally the most favoured by policy support measures.While green hydrogen saw its nameplate capacity double,blue hydrogen

112、saw limited growth considering spiking natural gas prices.Europe and the United States maintain their leading positions in the renewable natural gas or biomethane production,whereas Chinas capacity buildout falls short of general projections.In September 2023,biomethane accounted for approximately 0

113、.2%of the natural gas global market share,which falls significantly short of the potential.The supply shock coming out of the Russia-Ukraine war reminded the world about the need to re-focus on energy security and underscored the need for reliable and diversified energy sources.Moving forward,a more

114、 integrated approach on the three dimensions of the energy trilemma is essential.The developments observed in 2022 and the first half of 2023 demonstrate that when energy security and affordability are compromised,short-term crisis response measures prioritise security over sustainability.Hence,gas

115、emerges as a key energy source needed to balance the energy trilemma towards an equilibrium encompassing all three dimensions:security of supply,sustainability,and affordability.Not only is gas abundant and affordable when timely investments are made,but it also has a lower carbon footprint than oth

116、er fossil fuel alternatives even when unabated.Moreover,the gas system can be further decarbonised with the use of carbon capture and with the scaling of biomethane and other low carbon gases.1/Review of the most turbulent year in the history of gasGlobal Gas Report 2023142022 saw a steep reduction

117、in available pipeline gas in Europe,resulting in an approximate 65%increase in LNG imports to compensate for lost volumes,with this trend continuing into 2023.Abrupt changes of Russian pipeline flows triggered fierce competition for supply,mainly between Europe and Asia,causing prices to spike to al

118、l-time highs.In Europe,the sudden increase in LNG imports led to regasification facilities being overutilised over extended periods and significant inter-regional price differentials caused by infrastructure limitations.On the exporting side,final investment decision(FID)activity,especially North Am

119、erica,showed strong growth in liquefaction facilities for further exports.Considering REPowerEUs requirement to maintain minimum gas storage stocks,Europe saw robust growth in gas storage buildup,remaining strong in September 2023.Globally,LNG SPA contracts signed in 2022 demonstrated a sustained em

120、phasis in the market on long-term commitments,while Europe continued to prefer short-term mechanisms.Due to the high gas prices in Europe and Asia,the economic attractiveness of coal improved in 2022,resulting in increased consumption through gas-to-coal switching and a corresponding growth in emiss

121、ions.Europes and Asias coal consumption for power generation increased by 1.3%and 2.6%,respectively.The price spikes in Asia and Europe caused the Asian spot and TTF to raise above their respective gas-to-coal-switching bands for the majority of 2022,making coal a lot more attractive.In the context

122、of power,coal consumption increased even as overall power consumption declined.Subsequently,the emission intensity of global power production increased in 2022.This occurred despite record growth in renewables generation,without which the increase would have been even worse.Leading up to September 2

123、023,the economic justification for coal switching in Asia and Europe has weakened as gas prices have decreased.Global gas demand decreased by about 60 Bcm(1.5%)overall in 2022 compared to 2021,although still being above the pre-Covid year 2019.The main drivers of the decrease were increased gas-to-c

124、oal switching and industrial shutdowns in response to higher prices,coupled with growth in renewable energy and a dip in gas use for heating and cooling in many parts of the world due to mild weather conditions.In terms of prices,the TTF gas price reached an all-time high in 2022 of about 90 USD/MMB

125、tu,mainly attributable to significant reduc-tions in Russian production and Figure 8:Global gas demand,split by demand sectorDevelopments in gas demand exports to Europe of about 87.2 Bcm and 79.8 Bcm respectively.Despite a relatively stable gas demand sector mix on a global scale in 2022,regional c

126、hanges in gas consumption from 2021 were evident.The demand decline in 2022 was particularly pronounced Source:Rystad EnergyBcm34%34%34%34%27%28%28%27%14%15%15%15%8%8%7%8%6%6%6%6%5%5%5%4%3%3%3%3%3%3%3%3%3,9313,8364,0553,99505001,0001,5002,0002,5003,0003,5004,0004,5002019202020212022PowerIndustrialRe

127、sidentialOthersCommercialHeatTransportationFuel Gas27%28%26%28%23%23%24%24%14%15%15%15%14%14%14%12%11%11%12%11%4%4%4%4%4%4%4%4%1%1%1%1%3,9313,8364,0553,99505001,0001,5002,0002,5003,0003,5004,0004,5002019202020212022North AmericaAsiaMiddle EastEuropeRussiaAfricaSouth AmericaAustraliaBcmFigure 9:Globa

128、l gas demand,split by regionSource:Rystad Energy1/Review of the most turbulent year in the history of gasGlobal Gas Report 202315Figure 10:World map coloured by regionsEuropeNorth AmericaSouth AmericaAfricaAustraliaRussiaMiddle EastAsiaSource:Rystad EnergyFigure 11:Gas demand sector mix in 2022,spli

129、t by region0%10%20%30%40%50%60%70%80%90%100%North AmericaAfricaMiddle EastAustraliaSouth AmericaAsiaRussiaEuropePowerIndustrialResidentialOthersCommercialHeatTransportationFuel GasPercent of total demandSource:Rystad EnergyFigure 12:Global gas demand sector year-on-year change,split by region(2021 2

130、022)Source:Rystad Energy49532-10-19-23-66-80-60-40-200204060North AmericaAfricaMiddle EastAustraliaSouth AmericaAsiaRussiaEuropePowerIndustrialResidentialOthersCommercialHeatTransportationFuel GasBcm1/Review of the most turbulent year in the history of gasGlobal Gas Report 202316in Europe,caused by

131、market disruptions resulting from the Russia-Ukraine conflict.Further,Asias previously robust growth trajectory saw stagnation,primar-ily caused by elevated gas prices and subsequent demand destruc-tion.By contrast,North America saw a notable increase in year-on-year gas demand in 2022.Europe saw th

132、e steepest demand reduction globally in 2022 of about 66.1 Bcm,equalling a 12.0%contraction from 2021.The major drivers of this reduction were re-duced industrial consumption and decreased residential and com-mercial usage.Although industrial consumption is typically stable,elevated gas prices in 20

133、22 caused industry shutdowns in Europe,accounting for about 41.5%of the regions total demand contrac-tion.For instance,in September 2022,Yara International,a Nor-wegian chemical company and a major global fertilizer producer announced reductions in ammonia production in Europe due to rising gas pric

134、es.Additionally,some in-dustrial players adopted the strat-egy of switching from producing themselves to importing cheaper finished commodities and inter-mediary goods.Consequently,by mid-2022,Germanys chemical industry reportedly,according to the European Central Bank,began importing ammonia instea

135、d of producing it domestically.Furthermore,Europes extensive gas distribution networks for residential and commercial build-ings saw a substantial decrease in gas demand,accounting for about 55.6%of the regions total demand contraction.According to the IEA,over 60%of the decrease in residential and

136、commercial buildings can be mostly attribut-ed to mild winter temperatures,while the adoption of about 2.8 million heat pumps coupled with increased use of electricity to heat buildings reduced the gas demand by an additional estimated 1.4 Bcm.Despite increased electrici-ty-based heating,Europes pow

137、er sector faced a compounded supply challenge in 2022.In addi-tion to the gas supply constraint stemming from Russian pipeline curtailments,Europe experienced a drop in nuclear power gener-ation due to facility downtime,as well as limited hydropower generation.These factors togeth-er created signifi

138、cant stress in the power sector.Regardless,the gap was partially met by robust growth in non-hydro renewa-bles,coal switching,and the mild winter temperatures,resulting in unchanged gas demand for power in 2022.The substantial reduction in gas demand observed in Europe during 2022 raises the questio

139、n:is the decline fleeting or indicative of a lasting trend?Although some price-driven trends such as industrial shut-downs are reversible,2023 Sep-tember shows no clear indication of recovery in the gas demand by Europes biggest consuming na-tions,even though the cost situa-tion has improved,and pri

140、ces have retreated.However,the prices remain above pre-crisis levels and fear of returned volatility is still present.Gas consumption in the EU from January to August 2023 was around 215 Bcm,a reduction of about 25 Bcm from the same period in 2022.When compared with EUs pre-crisis gas consump-tion i

141、n the first eight months in 2021,the decrease is even more significant,totalling over 53 Bcm.However,it is still too early to definitively determine whether 1/Review of the most turbulent year in the history of gasGlobal Gas Report 202317the reduction represents a permanent shift in demand.There is

142、a high degree of uncertainty surrounding whether the decreased demand is solely driven by pricing factors,or if it signifies a more enduring trend.Nevertheless,the evidence observed up until August 2023 indicates that there may be lasting changes in gas demand.Russia too saw a demand reduc-tion of 2

143、3.3 Bcm or 4.9%,largely attributed to a mild winter3.As seen in Figure 12,Russias gas con-sumption mix stands out since its heating relies heavily on gas-pow-ered centralised heating systems.Although Europe and parts of Asia have similar systems in operation,most regions apart from Russia predominan

144、tly rely on electricity and distribution of piped gas and local heat boilers for heating.Consequently,during the warm winter of 2022,Russia was the only affected region to see significant reductions in gas usage for such heating purposes,accounting for about 71.1%of the regions total demand contract

145、ion.The decline in Russias natural gas demand for power generation can primarily be attributed to the expansion of nuclear energy and the develop-ment of various renewable energy sources.In Asia,gas demand fell by about 2.0%from 963.3 Bcm in 2021 to 944.4 Bcm in 2022,mainly driven by high LNG prices

146、,prolonged pandemic-related lockdowns in China,and a milder winter in Northeast Asia.The high LNG prices,driven by a surge in LNG demand in Europe to replace Russian piped-gas supplies,triggered demand destruction of LNG in Asia.It pushed countries with relatively weak purchas-ing power,like Banglad

147、esh and Pakistan,to attempt to switch to highly emitting energy sources like fuel oil and coal,resulting in a 12%and 15%reduction in gas demand,respectively.This challenge persisted from 2022 and continues into September 2023,particularly in meeting power demand.Although Pakistan and Bangladesh cont

148、emplated turning to alternative fuels to sustain power generation,Pakistan faced issues related to its older oil-fired power plants,which are less efficient and more costly to operate compared to newer gas-fired plants,while Bangladesh faced constraints due to short-ages in alternative fuel sources.

149、Ultimately,these challenges resulted in power blackouts in both countries,dealing a harsh blow to their economies and living conditions.In China,continued lockdown measures and reduced gas demand from price-sensitive industrial players resulted in a decline of natural gas demand by 0.8%from 370 Bcm

150、to 367 Bcm,which is the first drop in gas demand in 30 years.Furthermore,the mild winter in Northeast Asia reduced space heating requirements and dampened gas consumption,contributing to the overall decline in Asias gas demand.Recent developments in Asia have signalled possible divergence between po

151、licies supporting growth in coal to gas switching and the continuing expansion of coal.In 2022,China approved a Figure 13:EU27 monthly gas consumption010203040506070JanFebMarAprMayJunJulAugSepOctNovDecMin/Max2019-21 range20222023EU gas consumption continued to trail 2022 figures2023 consumption has

152、consistently been below the 2019-21 rangeBcmSource:Eurostat;Rystad Energy3 Transparency on Russian figures have been reduced post the onset of the Russia-Ukraine war,yet Rystad Energy believes the fall is real and attributable to heating and power.1/Review of the most turbulent year in the history o

153、f gasGlobal Gas Report 202318record-breaking 86 GW of new coal-fired plants,while other countries like Pakistan pledged to quadruple its coal-fired generation from 2 GW in 2022 to 10 GW by 2030.This would undermine energy transition targets like“peak emissions 2030”for China and“50%reduction of emis

154、sions by 2030”for Pakistan,which require gas to progress towards decarbonisa-tion goals,and at the same time meet industrialisation needs.This has resulted in much uncertainty surrounding Asias future gas demand and the overall energy landscape,as the switch back to coal deviates away from sustainab

155、ility and could potentially set emerging economies in Asia back in terms of industrialisation and risk significant delays in local decarbonisation efforts and global net-zero targets.In the first half of 2023,China saw gas demand recovering and growing at 5.6%year-on-year to reach 194 Bcm,largely at

156、tributable to fully reopening its economy from the Covid lockdowns.Chinas total LNG and pipeline imports increased by 5.8%from 2022,reaching 76 Bcm.Nonetheless,its imports are still lower than the 81 Bcm pre-crisis level in the first half of 2021,due to Chinas efforts in boosting domestic gas produc

157、tion and a mild economic rebound.In contrast,Japan saw gas consumption and LNG imports decreasing 9%to 48 Bcm in 2022 and 14%to 33 Bcm year-on-year in the first half of 2023.In 2021,before the Russia-Ukraine crisis,Japans LNG imports amounted to 53 Bcm.The drop from 2022 is attributable to Japans ex

158、panded nuclear and solar generation capacity and a high 5.4 million tonnes inventory level by June 2023.Before the 2023/24 winter season,Japan,and South Korea plan to have an addition-al combined 6 GW of nuclear capacity online,further softening their demand for LNG due to less dependence on gas-fir

159、ed power generation.North Americas gas demand by contrast grew by 4.8%or 49 Bcm year-on-year in 2022,a notable increase driven primarily by in-creased utilisation of gas for pow-er generation as well as residential and commercial applications.In the power sector,this was largely due to the retiremen

160、t of coal-fired plants,relatively higher coal prices,and below-average coal stocks.Consequently,there was a noticeable shift towards increased utilisation of gas for power gen-eration.Additionally,the United States experienced record-high temperatures in summer of 2022,boosting power demand for cool

161、-ing.In the residential and com-mercial sectors,colder-than-aver-age temperatures in January 2022 resulted in increased demand from gas boilers for space heat-ing in residential and commercial buildings.In 2023,the gas market experienced a dent in demand pri-marily in residential and commer-cial sec

162、tors for heating during the mild winter in the northern hemi-sphere.Conversely,there was also a rise in electricity generation for cooling when heatwaves affected large parts of the same region.For example,in the United States,the gas consumption in the residential and commercial sectors dropped Fig

163、ure 14.1:Global power mix split by energy sourceFigure 14.2:2022 global power mix by region,split by energy source36%34%35%34%23%23%22%22%16%16%16%15%10%12%13%14%10%10%10%9%2%2%2%2%3%2%2%2%0%0%0%0%27,47627,34628,66229,30505,00010,00015,00020,00025,00030,00035,00040,0002019202020212022CoalGasHydroRen

164、ewablesNuclearBioenergyLiquidsOther(non-renewable)TWhSource:Rystad EnergySource:Rystad Energy1/Review of the most turbulent year in the history of gasGlobal Gas Report 202319by 9%year-on-year to 3.2 Bcm in the first quarter,while con-sumption in electricity generation rose to 33.2 Bcm in June,a 2.3%

165、increase from June 2022.South Americas gas consumption reduced by 6.6%or 10 Bcm in 2022,from 159 Bcm in 2021,due to improvements in hydroelectricity generation conditions in Brazil and lower demand from the industrial sector amid high gas import prices.Conversely,Africas gas demand saw a 3.1%or 5 Bc

166、m increase in 2022,compared to 167 Bcm in 2021,primarily due to increased needs within the power and industrial sectors and ongoing efforts to democratise energy and gas to bolster economic development.In the Middle East,gas demand increased modestly from 612 Bcm in 2021 to 615 Bcm in 2022,driven by

167、 higher electricity demand and improved gas supply for power generation.Australia witnessed a slight uptick of 1.6 Bcm in gas demand,despite the growth of renewables in the power mix,as coal plant closures required gas to step up as a dispatchable source.In the context of the worldwide power mix,gas

168、 utilisation remained largely stable between 2021 and 2022,even in the face of a substantial increase in installed renewable capacity and gas-to-coal switching.Nevertheless,it is worth noting that regional disparities persist,as seen in the chart above.As discussed in the following chapters of this

169、report,even in areas where the power sector is expected to gradually transition to large-scale renewables,the dispatchability and flexibility of gas-fired power makes it an essential part of the decarbonised power system,providing resilience and grid stability.Supply and gas investments 050100150200

170、2503002010201120122013201420152016201720182019202020212022CapexOpexBillion USD(Nominal)Figure 15:Capex and Opex in global gas production(nominal upstream gas field-related expenditures)Source:Rystad EnergyTurning to the supply side,we examine the evolution in invest-ments in the cycle leading up to

171、the energy crisis starting in 2021.There has been a pronounced downward trend in upstream investment over the previous decade,setting in after the oil downturn in 2014.The period from 2014 to 2016 saw reduced investments in oil and gas as global oil prices declined signif-icantly,with abundant injec

172、tions of supply into the market from the strong United States shale production that was bearing fruit from investments prior to 2014.Then,from 2015 to 2019,capital expenditure stagnated due to the lingering aftermath of the oil and gas price drop accompanied with a growing policy uncertain-ty amidst

173、 the stronger focus on climate change mitigation.Many operators faced elevated debt and lower profits,prompting cautious investment decisions focused on cost reduction and capital discipline.This period led to many companies introducing cost saving programmes to reduce expenditure and allocate capit

174、al 1/Review of the most turbulent year in the history of gasGlobal Gas Report 202320more efficiently.Without signifi-cant cost reductions,this period would have been much more volatile in terms of energy costs.Global average well costs fell by more than 28%from 2015 to 2021.Inflationary pressure in

175、2022 marked the first year of increasing unit costs,with average well costs growing by 8%year-on-year.The decline in investments continued from 2019 to 2020,largely due to the Covid-19 pandemic.Uncertainties in future demand and policy directions led to a frugal investment stance across industries,i

176、ncluding energy.This decline in investment levels in 2020 further compound-ed the previously observed trend of reduced investments since 2015.In 2020,a temporary reduc-tion in operational expenditure can be attributed to the pandem-ics disruptive effects.The recovery from the pandemic in 2021 and 20

177、22 was marked by a sharp rebound in industrial activity,transportation,and consumption of commodities,including natural gas.Low invest-ment into the upstream sector during this period continues to contribute to high commodity prices and energy scarcity today.The rebound helped expenditure levels to

178、recover in 2021 and in 2022,capital expenditure on gas fields increased by 26%,attribut-ed to both a high inflationary environment and increased economic activity levels.Capital costs have been rising due to multiple supply chain pressures exacerbated by the crisis,tight markets for specialised labo

179、ur and services,and the effect of higher energy prices on essential construction materials such as steel and cement.It is important to note that most of the current capital expenditure is associated with expansion pro-jects rather than exploration in greenfield areas.Most operators are still relativ

180、ely cautious and un-willing to take on increased risks associated with new exploration,due to ongoing energy transition trends,uncertainty about accessi-ble financing and political risk,as policies continue to be issued to ban future use of natural gas.Rystad Energys overview shows that E&P explorat

181、ion budgets have been revised down from almost 160 billion USD in 2013 to around 65 billion USD in 2023,both nominal figures.This is a troubling fact,because sustained exploration and upstream invest-ments are essential to rebalance the energy market and restore se-curity of supply,avoid production

182、shortages and price spikes and to enable coal replacement,that would otherwise limit and chal-lenge environmental goals and reverse decarbonisation efforts.Consequently,in a bid to improve energy security,some countries have committed to attracting upstream investment climate to increase its domesti

183、c production of gas.Indonesia,for example,has announced an ambitious target to increase its domestic gas produc-tion from 58 Bcm in 2022 to 124 Bcm by 2030.This is in line with its goal to increase the share of nat-ural gas in the primary energy mix from 17.8%in 2013 to 22.4%in 2025 and 25%in 2050,a

184、ccording to its National Energy Plan(RUEN).The upstream regulator of Indone-sia,SKK Migas estimates addition-al annual upstream investment of 18 to 20 billion USD to fulfil the 29%29%29%30%17%17%17%18%16%17%17%17%18%16%18%15%6%6%6%6%6%6%7%6%4%4%4%4%4%4%4%4%3,9733,8384,0414,04905001,0001,5002,0002,50

185、03,0003,5004,0004,5002019202020212022North AmericaAsiaMiddle EastRussiaEuropeAfricaAustraliaSouth AmericaBcmFigure 16:Global gas production,split by regionFigure 17:Global gas production year-on-year change(2021 2022)53.116.916.48.64.1-0.7-2.9-87.2-100-80-60-40-20 0 20 40 60NorthAmericaMiddleEastAsi

186、aEuropeSouthAmericaAustraliaAfricaRussiaBcmSource:Rystad EnergySource:Rystad Energy1/Review of the most turbulent year in the history of gasGlobal Gas Report 202321target.However,its fiscal regime remains as one of the most complex and stringent in the world,with government take averaging between 60

187、%to 75%,disincentivising foreign investment to development its gas resources.Policy alignment between energy policies and regulations underpinning invest-ment climate is especially impor-tant for developing countries like Indonesia,which is still highly reliant on coal.The development of gas resourc

188、es provides a path-way to a more sustainable,secure,and affordable future,and aids its industrialisation for further economic growth.On a global level,gas production remained relatively flat in 2022 compared to the previous year.On the other hand,on a regional level,2022 brought a shock to local mar

189、kets.Following the Russia-Ukraine crisis,production in Russia decreased by 87.2 Bcm or 12.3%from 709.7 Bcm in 2021 to 622.5 Bcm in 2022.The reason for the decreased output is two-fold.First,the division of Russias gas supply system into two distinct segments,one in the west and one in the east,witho

190、ut interconnection,posed a compli-cation for redirecting gas exports.Consequently,lack of gas infrastructure in the east,other than solely the Power of Siberia pipeline,forced Gazprom to cut production in line with reduced gas exports to Europe.By contrast,the independent LNG producer Novatek booste

191、d gas output in 2022,mainly thanks to its LNG portfolio which is more resilient to market turbulence.Second,the explosions in the North Stream infrastructure in September 2022 significantly diminished Russias export capabilities to Europe.A further examination of these develop-ments can be found und

192、er the Trade Flows section.North America conversely in-creased production from 1,160 Bcm to 1,213 Bcm,an increase of about 4.6%year-on-year.About 72.8%of the increased North American production stemmed from the United States,where gas supply growth was largely driven by increased shale activity in t

193、he Permian,Haynesville,and Eagle Ford plays.Unlike Haynesville and Eagle Ford,natural gas production in the Permian is primarily the result of associated gas produc-tion from oil wells.Haynesville is a strategic location for operators to drill for natural gas because of the proximity to the Gulf Coa

194、st,where industrial demand and LNG production and export terminals have been growing.The Middle East saw the second largest growth in gas production in 2022,rising from 670 Bcm in 2021 to 687 Bcm last year,with 40.2%and 24.1%of the increases stemming from Iran and Saudi Arabia,respectively.The signi

195、fi-cant increase stems from the re-gions goal to boost self-sufficien-cy and further export potential.In Asia,gas production rose modestly from 695.9 Bcm in 2021 to 712.2 Bcm in 2022.Most nota-bly,there was a significant surge in Chinese production,amounting to a remarkable increase of 12.5 Bcm.The

196、increase is in alignment with the strategic objectives out-lined in the countrys latest five-year plan for 2020-2025,which seeks to bolster domestic gas pro-duction to enhance energy securi-ty.Apart from China,the regions upturn can be primarily attributed to expansions in Turkmenistan and Azerbaija

197、n,with the rest of Asia experiencing either marginal growth or a decline in production during 2022.With the aforemen-tioned additions,the year of 2022 marks the first time since 2013 that Asias gas self-sufficiency rate has grown.This reversal of the trend signifies a notable shift from the past,whe

198、re gas produc-tion struggled to keep up with the regions surging demand.Despite this development,imports will continue to play a crucial role in meeting demand growth in Asia.European production increased by about 8.6 Bcm in 2022,an in-crease of approximately 3.8%.The incremental production primaril

199、y stemmed from Norway,as the country strategically ramped up output,resulting in a remarkable increase of over 9.2 Bcm(approx-imately 7.5%)year-on-year.This surge was aimed at augmenting exports to continental Europe,effectively countering the de-cline in Russian supply.Increased production permits

200、issued by the Norwegian Ministry of Petroleum and Energy allowed Equinor to maintain high production levels at its Troll,Oseberg and Heidrun gas fields,increasing production by around 1.6 Bcm.This was further supported by the restart of the Hammerfest LNG facility in early June 2022,with all its 40

201、cargoes shipped to Europe.By contrast,Africa saw gas production dip by 2.9 Bcm(about 1.1%)between 2021 and 2022,mainly due to declining produc-tion from large,maturing fields in Egypt.However,net production increases from Algeria and Libya remained strong,increasing in total about 2.9 Bcm in 2022,pa

202、rtially offsetting the declines in mature field production.The potential for additional growth in the supply development in Africa is high,as the continent holds 8%of the worlds gas reserves and has ambitious plans for their development.Importantly,more gas will be needed to fuel domestic industrial

203、isation and improve modern energy access to its growing population.With 600 million Africans lacking access to electricity and with its young and fast-growing population,Africa is a good candidate for development of domestic gas markets.However,capturing this potential will 1/Review of the most turb

204、ulent year in the history of gasGlobal Gas Report 202322require concerted effort from the key regional actors to address existing barriers such as securing capital and buildout of significant infrastructure,as well as streamlining policy and improving business climate and project delivery timelines4

205、.According to the IEA,Africas energy sector still faces challenges in rebounding from the sharp decline in oil and gas spending levels in 2014.South America saw a modest supply growth of 4 Bcm in 2022,mainly attributable to Argentina and Peru.This region too has significant potential in the onshore

206、resources that could be developed to meet growing local demand and even facilitate for exports.Trade flows Figure 18:Gas demand,production,and import/export volumes,split by region-600-400-20002004006008001,0001,2001,4001,6001,800EuropeAsiaAustraliaAfricaRussiaMiddle EastNorth America201020222010202

207、2201020222010202220102022201020222010202220102022South AmericaIMPORTERIMPORTEREXPORTEREXPORTEREXPORTEREXPORTEREXPORTERBalancedImplied import needsProductionDemandImplied export potentialBcmFigure 18 illustrates the disparity in gas production and demand across various regions.Some regions exhibit a

208、surplus of gas production over their local demand,categorising them as exporting regions,while others experience a deficit,classifying them as importing regions.In the case of exporting regions,the volume they can export without tapping into their stored gas reserves is termed the implied export cap

209、acity.Conversely,for importing regions,the quantity they can import without resorting to their stored gas reserves is denoted as the implied import requirements.Source:Rystad Energy4 IGU“Gas for Africa 2023”Figure 19:Global net gas export volumes,split by flow type54%49%46%51%1,1241,0420200400600800

210、1,0001,20020212022LNGPipelineBcmSource:Rystad Energy1/Review of the most turbulent year in the history of gasGlobal Gas Report 202323Developments in Russian pipeline trade flowsIn 2022,Russian production plum-meted by around 87.2 Bcm amidst the war in Ukraine due to curtail-ments by Gazprom.In turn,

211、net pipeline exports were reduced by about 44%,from 191 Bcm to 107 Bcm,with Europe being the most affected importing region.Europe saw the number of oper-ating pipeline gas supply routes from Russia reduce from six to two during 2022,which remains the case in September 2023.Consequently,more than 84

212、 Bcm of Russian pipeline gas stopped flowing to Europe,equivalent to about 34%of European imported gas volumes and 17%of total gas consumption in the region.The largest impact came from the reduction in exports through the 710475235191-100 0 100 200 300 400 500 600 700 800DomesticproductionDomesticd

213、emandTotal exportsTotal pipelineexportsPipeline(191)LNG(41)Europe(168)Middle East(28)Asia(-4)Storage(2)BcmFigure 20:Russian gas flows 2021Figure 21:Russian gas flows 2022623452171107 0 100 200 300 400 500 600 700 800DomesticproductionDomesticdemandTotal exportsTotal pipelineexportsPipeline(107)LNG(4

214、5)Europe(83)Asia(6)Middle East(18)Storage(18)BcmSource:Rystad EnergySource:Rystad Energynamely Russia and North America,as illustrated in Figure 18.2022 witnessed a substantial shift in the share of exports from pipeline to LNG,primarily attributed to the reduction in Russian pipeline exports follow

215、ing the commence-ment of the Russia-Ukraine war,the explosion of the Nord Stream 1 pipeline,and the surge of LNG flowing into Europe.This sub-chapter examines how the changes in Russian pipeline flows triggered cascading impacts on LNG trade patterns,influenced develop-ments in European gas storage

216、and infrastructure,and shaped trends in the SPA contract scene.As previously highlighted,the year 2022 brought substantial fluctuations in both the supply and demand of gas.These fluctu-ations in turn had notable conse-quences on global trade flows,especially for the two largest gas importing region

217、s,Europe and Asia,and large exporting regions,Nord Stream 1 pipeline.Exports through this pipeline were reduced by Russia from June 2022,before halting completely following an explosion of the Nord Stream 1 and 2 pipelines on 26 September 2022.Prior to this,Nord Stream 1 was responsible for almost 5

218、0%of Russian exports into Europe.Russian pipeline gas exports to Europe via Ukraine,totalling about 27 Bcm yearly,continued through 2022 and per-sist in terms of daily volumes as of September 2023,although the agreement for transits through Russias exit point at Sudzha is due to expire on 30 Decembe

219、r 2024.If the agreement is not renewed by Russia and Ukraine,or the flow being redirected through alternative routes via Turkey or Poland,it could reduce Russian gas pipeline flows to Europe even further.To counter the curtailed imports,European producers attempted to maximise output within the limi

220、tations of existing infrastruc-ture.Among the notable Europe-an production boosts,Norway,and the United Kingdom achieved production increases of 9.2 Bcm and 5.5 Bcm,reflecting year-on-year growth rates of 7.5%and 17.1%,respectively.As alternative gas pipelines to Europe were already operating close

221、to full capacity or was constrained by up-stream supply availability,Europe turned to LNG imports for the rescue,a subject covered in more detail later in this sub-chapter.1/Review of the most turbulent year in the history of gasGlobal Gas Report 202324Figure 23:Russian pipeline gas imports/exports

222、with Asia 2021Figure 24:Russian pipeline gas imports/exports with Asia 2022Figure 22:Russian pipeline gas flows to Europe by entry point050100150200250300350400Sep-21Nov-21Jan-22Mar-22May-22Jul-22Sep-22Nov-22Jan-23Mar-23May-23Jul-23Sep-23NEL(Nord Stream)OPAL(Nord Stream)Imatra(Russia-Finland)Mallnow

223、(Yamal-Europe)Sokhranovka(Ukraine)Strandzha 2(Turk Stream)Sudzha(Ukraine)Million cubic meters per day(MMcmd)12.917.1-4.3-5 0 5 10 15 20 25 30 35ExportImportNet exportChinaArmeniaAzerbaijanKyrgyzstanKazakhstanTurkmenistanUzbekistanBcm18.812.56.3-5 0 5 10 15 20 25 30 35ExportImportNet exportChinaArmen

224、iaAzerbaijanKyrgyzstanKazakhstanTurkmenistanUzbekistanBcmSource:Rystad EnergySource:Rystad EnergySource:Rystad EnergyIn Asia,Russias net pipeline ex-ports turned positive,as imports,primarily from Turkmenistan,decreased while exports,primar-ily to China,increased.The main contribution to this develo

225、pment was Power of Siberia 1 increasing pipeline exports to China by over 50%.Further,it was communicated that Russia plans to further boost exports to China by 50 Bcm annually through Power of Siberia 2,while the existing Power of Siberia 1 pipeline is set to deliver 38 Bcm per year by 2025.Limited

226、 supply of LNG brought fierce competitionTo replace all the curtailed Russian gas supply to Europe with LNG would require more than 21%of the total traded LNG globally,underscoring how profound the potential shift would be.Europe attempting to cover as much of the demand as possible brought a cascad

227、e of far-reaching effects.In 2022,roughly 13%of the worlds total gas production was exported in the form of LNG,at an estimated 401.5 million tonnes.This represents an approximate 6.8%rise in LNG 1/Review of the most turbulent year in the history of gasGlobal Gas Report 202325exports from the 375.9

228、million tonnes recorded in 2021.On a regional level,the most notable shift was the increased consumption of LNG in Europe.This shift was driven by a greater willingness to pay a premium price,resulting in a redirection of traded LNG,predominantly sourced from the United States,and also from Asia to

229、Europe.Figure 25:Global LNG trade flows 2021Figure 26:Global LNG trade flows 2022Source:Rystad EnergySource:Rystad EnergyMade with SankeyMATICAustralia:81.1China:78.9Japan:77.8South Korea:47.4India:23.1Chinese Taipei:20.4Others:81.7Qatar:80.0Spain:15.4France:13.3United Kingdom:11.5Turkey:9.9United S

230、tates:71.7Russia:30.7Malaysia:23.4Nigeria:17.0Algeria:11.8Indonesia:10.9Oman:10.1Others:42.7Million tonnesMade with SankeyMATICAustralia:81.7Japan:73.8China:62.0South Korea:46.5Chinese Taipei:20.6India:19.9Netherlands:12.4Others:90.7Qatar:80.9France:27.1Spain:22.3United Kingdom:19.8United States:78.

231、6Russia:33.6Malaysia:24.3Nigeria:15.1Indonesia:11.5Oman:11.3Algeria:10.4Others:47.7Million tonnesEurope saw the largest increase in imported LNG,rising from 74 million tonnes in 2021 to 124 million tonnes in 2022,an increase of almost 68%.Out of exporters to fill the European demand,the United State

232、s increased exports to Europe by more than 30 mil-lion tonnes from 2021 to 2022,a 159%year-on-year increase.Within Europe,France was the dominant LNG importer,more than doubling LNG imports from 13 million tonnes to 27 million tonnes year-on-year,of which over 64%came from the United States.Other la

233、rge European import-ers Spain,the United Kingdom,the Netherlands,and Italy also increased LNG imports by 43%,75%,98%and 44%respectively in 2022,with most of the increases coming from the United States.Although gas demand in Germany was high during 2022,the coun-try imported insignificant LNG volumes

234、 for much of the year due to a lack of regasification facilities until its first FSRU came online towards the end of 2022.Monthly traded volumes of LNG are shown in Figure 27,with the uptick of the United States exports clearly visible at the beginning of 2022 and remaining high ever since.Qatar,Rus

235、sia,and Nigeria are the next three domi-nant exporters of LNG to Europe,with the regions largest being France,Spain,Belgium,and the Netherlands.Significantly,despite the pipeline gas curtailments,Russian LNG exports to Europe have maintained a consistent growth trajectory,increasing by more than 260

236、%in 2022 com-pared to 2018.In Europe,the EU27 saw the largest reduction of Russian pipeline gas imports,amounting to 80 Bcm between 2021 and 2022.To offset this shortfall,there was a notable surge in gas imports predominantly from the United States in the form of LNG,and from Norway and the United K

237、ingdom in the form of piped gas.This was further comple-mented by an increase in imports of Russian LNG.The collective effort managed to bridge 97%of the gap in pipeline gas supply caused by the Russian pipeline gas reductions.Even though the EU27 successfully mitigated the majori-ty of the losses,g

238、as consumption still decreased by around 41 Bcm and at the expense of rising coal consumption.It is worth noting that the EU27 accumulated a sub-stantial storage buildup of 33 Bcm during that year.As a result of Europes surging demand for LNG in 2022,many leading importing nations in the region oper

239、ated regasification fa-cilities close to,or even exceeding,nameplate capacity for prolonged durations,as illustrated in Figure 29.For example,regasification facilities in the Netherlands saw a consistent utilisation rate over 100%in the first half of 2022,a trend which only reversed once a new impor

240、t facility started operating later that year.Consequently,European newly installed regasification capacity 1/Review of the most turbulent year in the history of gasGlobal Gas Report 202326Figure 27:European LNG imports by origingrew by more than 14 million tonnes per annum(MTPA)in 2022 and about 11

241、MTPA so far in 2023(as of September),a significant increase compared to earlier years.Nearly 80%and 100%respective-ly of new European LNG import capacity has involved FSRUs,as these have shorter lead times than traditional onshore terminals and enabled Europe to rapidly scale up import capacity to o

242、ffset the declining gas pipeline flows from Russia.In Asia,the most significant shift in 2022 was China reducing LNG imports from Australia and the United States by 10.9 million tonnes and 10.1 million tonnes respectively,while boosting imports from Qatar by approximately 7.4 million tonnes.About 36

243、%of the reduced Australian exports to China were redirected to Japan,with South Korea,Chinese Taipei,and Thailand accounting for approximately 51%.Converse-ly,a significant portion of Qatars exports that were previously destined for Japan were redirect-ed to China in 2022 via long-term contracts sig

244、ned with Chinese gas importers.Further,during the first half of 2023,lower spot prices,higher contracted volumes,and 024681012Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22Jan-23Feb-23Mar-23Apr-23May-23

245、AlgeriaAngolaEgyptEquatorial GuineaFinlandFranceNigeriaOmanPeruPuerto RicoQatarRussiaTrinidad&TobagoUSOtherMillion tonnes(Mt)Source:Rystad EnergyFigure 28:Estimated changes in EU27 gas availability from 2021 to 2022,split by sourceSource:Rystad Energy1/Review of the most turbulent year in the histor

246、y of gasGlobal Gas Report 202327record-breaking warm tempera-tures led to a rise in LNG imports to China.In recent decades,Japanese entities have been acquiring equity stakes in foreign upstream gas projects and LNG developments to ensure supply into Japan.Mitsui,Mitsubishi and Inpex are the largest

247、 acquir-ers,with town gas companies in Tokyo and Osaka also securing a presence further down the value chain.Japanese entities have been investing significantly in Australia,the United States,Indonesia,Canada,and other areas with gas resources.Similar investments are being undertaken by Chinese oper

248、ators Sinopec,CNOOC,and PetroChina which have been investing in Turkmenistan,Kazakhstan,Australia,Egypt,and other gas-rich countries.During the first half of 2023,monthly global LNG exports consistently surpassed the 2022 levels,resulting in a cumulative year-on-year increase of 4.1%and totalling 20

249、5 million tonnes.During the northern hemisphere summer,LNG supply experienced some volatility due to facility maintenance and outages.May 2023 saw the biggest month-on-month decrease primarily from producers in Qatar,Norway,and Australia,which were unable to be remedied by modest increase from Indon

250、esia Malaysia,and Mozambique.This led global LNG exports to fall from 34.9 million tonnes in April 2023 to 32.3 million tonnes in May 2023,below the 2022 average of 33.9 million tonnes,a difference translating to about 37 cargoes.Nonethe-less,LNG exports rebounded in July and kept above 33.2 million

251、 tonnes level in August.In Septem-ber 2023,there have been disrup-tion in gas supply due to rolling strikes,work bans and stoppages at the Gorgon LNG and Wheatstone facilities in Western Figure 29:Regasification utilisation in selected European countries0%20%40%60%80%100%120%140%Jan-2019Mar-2019May-

252、2019Jul-2019Sep-2019Nov-2019Jan-2020Mar-2020May-2020Jul-2020Sep-2020Nov-2020Jan-2021Mar-2021May-2021Jul-2021Sep-2021Nov-2021Jan-2022Mar-2022May-2022Jul-2022Sep-2022Nov-2022Jan-2023Mar-2023May-2023Jul-2023FranceItalyNetherlandsSpainUnited KingdomCapacity2022Utilization vs.Nameplate capacitySource:Rys

253、tad EnergyFigure 30:Russian LNG production capacitySource:Rystad Energy;IGU LNG Report1/Review of the most turbulent year in the history of gasGlobal Gas Report 202328Australia,potentially impacting about 5%of global LNG pro-duction.Gorgon LNG has three liquefaction trains with a com-bined capacity

254、of 15.6 MTPA of LNG,while Wheatstones two LNG trains have a combined capacity of 8.9 MTPA.This poses threats if the strikes and outages last until peak winter season.Russian LNG export volumes have been,and are still in September 2023,exported to both Asian and European buyers.Since 2017,Russia has

255、more than tripled its LNG export capacity through the development of the Yamal LNG facilities.Further,The Portovaya LNG export terminal was completed in 2022 and is expected to contribute towards even higher LNG export capacity in 2023 which will be its first full year of production.The three trains

256、 at Arctic LNG currently in development will bolster export capacity through the northeastern passage and to Europe.Notewor-thily,the second train,Arctic LNG T2,has faced delays and is currently expected to start operation in 2024.The Baltic LNG project is being developed by Gazprom in proximity to

257、European buyers,expected to add 13 million tonnes of LNG capacity.Although previously expected to finish in 2023,the project is now facing an expected two-year delay.Globally,liquefaction investments recovered in 2022,growing by 23%compared to 2021.Yet,Figure 31:Global liquefaction capex,split by re

258、gion10182333342723242218161721 0 5 10 15 20 25 30 35 402010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022AustraliaNorth AmericaAfricaRussiaAsiaMiddle EastEuropeSouth AmericaTotalBillion USDSource:Rystad Energy;IGU LNG Reportthe growth additions remain significantly below the high point

259、s of 2013-14.New liquefaction investments in 2022 were mainly led by the United States,Canada,Mozambique,Australia,Qatar,and Mexico.From the beginning of 2022 to September 2023,about 81.2 MTPA of new capac-ity reached FID or construction,with the United States and Qatar representing about 70.6%and 1

260、9.2%of the additions respectively.In 2023,there has been a remarkable surge in newly installed capacity,as the installations by September have already exceeded the totals for each of the individual full years of 2020,2021,and 2022.Despite growth and positive sentiments amidst current market events,s

261、ignificant uncer-tainty arouond the LNG markets future trajectory and the role of gas in the energy transition continues to weigh heavily on,and in some cases delay,investment decisions.This in turn poses significant chal-lenges for several critical aspects,including supply security,industry develop

262、ment predictability,unmet demand,and pricing,among others.European gas storage goals were surpassedDespite tight gas balances throughout the winter of 2021/22,European storage levels rebounded in mid-2022 after the EU revised gas storage regulations to increase stocks in response to the Russia-Ukrai

263、ne crisis.Through the REPowerEU initiative,the EU mandated that storage facilities should be at least 80%full by November 2022 and 90%full by the same date in subsequent years.On an aggregate level,2022s goal was reached by end-August 2022,exceeding the targets,although some countries still struggle

264、d to adhere to their obligations.For 2023 August,storage levels in Europe have consistently stayed close to,or at,record levels,exceeding the storage objectives set by the EU.Considering the recent advance-ments in gas storage levels,Europe is expected to encounter a winter season that is more robus

265、t and resilient than the previous year.Yet,it is important to acknowledge that there are several potential factors,such as temperatures and further supply events,that could significantly upset the balance.1/Review of the most turbulent year in the history of gasGlobal Gas Report 202329Figure 32:Dail

266、y European gas storage volumes and range in underground storage,excluding Ukraine020406080100120140JanFebMarAprMayJunJulAugSepOctNovDecMin/Max 5-year202120222023BcmSource:Rystad EnergyGlobal LNG contracts mainly focused on longevityHistorically,Asia has been the largest purchaser of LNG volumes,foll

267、owed by Europe,with the Asian region actively contracting even larger and longer-term volumes over the last decade (see Figure 34 for contract du-rations).However,following the natural gas supply crunch in 2021,newly signed contracts for LNG volumes spiked during 2021 and 2022,mainly aimed at bolste

268、ring energy security in the face of growing uncertainty.This trend was primarily caused by strategic decisions taken around energy supply in Asia and Europe.While Asia continued to secure contracted volumes,Europe mainly focused on obtaining spot volumes through portfolio contracts.It is noteworthy

269、that volumes stemming from portfolio contracts will eventually end up in the spot market,available not only to Europe but also Asia and other regions opting to import LNG.The strategic divergence between Asia and Europe ulti-mately results in different levels of predictability and reliability for th

270、eir respective LNG supplies,with Asias strategy positioning it for more reliable LNG supply than Europe.While the total contracted volume of LNG has surged in recent years,a large share of this comes from an uptick in the proportion of long-term agreements.This shift in focus continued in 2022,with

271、an even higher percentage of new contracts being long-term in nature.As much as 67%of all new volume signed in 2022 was for over 20 years in length,an increase of 24 percentage points from 2021 which was already at record-high levels.Figure 33:LNG contracted volumes,split by region and portfolio25%5

272、9%43%53%38%19%64%31%3%13%24%25%30%3%3%14%48%17%12%21%31%61%32%55%23%11%21%1%16%2%34.451.225.029.126.631.667.467.2 0 10 20 30 40 50 60 70 8020152016201720182019202020212022AsiaEuropePortfolioOthersMillion tonnesSource:Rystad Energy;IGU LNG Report1/Review of the most turbulent year in the history of g

273、asGlobal Gas Report 202330Table 2:LNG contract typesSource:Rystad EnergyFigure 34:New LNG contracted volumes,split by durationFigure 35:New LNG contracted volume durations(2022),split by durationSource:Rystad Energy;IGU LNG ReportSource:Rystad Energy;IGU LNG Report19%31%24%15%19%5%24%26%17%6%7%28%25

274、%5%53%39%55%51%73%34%27%28%5%4%4%28%19%19%43%67%34.451.225.029.126.631.667.467.2 0 10 20 30 40 50 60 70 8020152016201720182019202020212022Less than 5Between 5 and 10Between 11 and 20More than 20Million tonnes11%2%28%34%27%60%66%71%20.99.137.2 0 5 10 15 20 25 30 35 40 45 50AsiaEuropePortfolioLess tha

275、n 5Between 5 and 10Between 11 and 20More than 20Million tonnesPricingIn general,2022 stands out as a year of unparalleled turbulence for global gas markets,coming on the back of already elevated 2021 prices amidst a tight global market.The year began with an air of uncertainty over Russian pipeline

276、supplies to Europe.From there,gas prices experienced their first record spike after the Russia war with Ukraine began in late-February 2022,and triggered a cascade of geopolitical and energy sector responses.Thereafter,gas prices embarked on a streak of re-cord-breaking surges.The peak of this chaot

277、ic period came in late-August 2022,when natural gas prices reached an all-time high as the Netherlands-based Title Transfer Facility(TTF)closed at around 90 USD/MMBtu and Asian prices surged past 60 USD/MMBtu.Amidst the hike in prices,several European Union member states called for a price cap on na

278、tural gas prices within the EU.In response,the European Council reached a consensus in December 2022,setting a price limit at 180 EUR per megawatt-hour (equalling about 55 USD/MMBtu).Across Asia in 2022,a combination of factors including fluctuating demand due to Covid-19-related lockdowns in China,

279、price-induced demand contraction in the South and South-East,and fuel-switching led to Asian gas prices consistently trading below TTF.DescriptionLNG transaction types Purchase or sales of LNG are made at prices in real time Most spot market transactions are settled in a few daysSpot By players who

280、hold LNG supplies from different regions,and have shipping,storage,and regasification assets Contracts can be either short-term or long-term Prices can be on a spot or term contract basisPortfolio contracts Price is often linked to natural gas and oil benchmark prices Contract period is typically mo

281、re than 15 yearsLong-term contracts1/Review of the most turbulent year in the history of gasGlobal Gas Report 202331Figure 36:International natural gas prices020406080100120Jan-19Mar-19May-19Jul-19Sep-19Nov-19Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22J

282、ul-22Sep-22Nov-22Jan-23Mar-23May-23Jul-23Sep-23Henry HubLNG Northeast AsiaTTF2022Onset of Russia-Ukraine war heightens concerns over Russian pipeline supplyReports of sabotage on the Nord Stream pipelines and threats to energy infrastructure as Europe roiled under concurrent heatwavesUSD(real)per MM

283、BtuSource:Rystad Energy;Argus(LNG Northeast Asia)Figure 37:International natural gas price volatilitySo far in 2023(September),natural gas prices have predomi-nantly been on a downward trend,where factors such as demand contraction and a relatively warm beginning to the northern autumn have led to p

284、rice reductions.On the supply side,Freeport LNG in the United States returned to production in February 2023 after being out of service due to a fire in June 2022,restoring a significant share of liquefaction capacity and putting downward pressure on European and Asian gas prices.At the same time,pr

285、ice reductions in early 2023 triggered some spot buying activity from price-sensitive markets in Asia.So far in 2023,the prices remain much lower and less volatile in than in 2022.Despite the im-provements seen from 2022,gas prices and price volatility in 2023 remains significantly higher than in pr

286、e-crisis years(as depicted in figures 36 and 37).As of Septem-ber 2023,the gas prices show extreme sensitivity to any change in market conditions,real or ex-pected,mainly due to the exceed-ingly tight market balances with no major new supply additions to come for the next two years.This vulnerabilit

287、y was clearly demon-strated by the markets price response to the labour strikes at Chevrons facilities in Australia in September 2023,which have now been resolved.Going forward,any notable shift on either demand or the supply side,like a harsh winter or a supply shortage bound for Europe or Asia,cou

288、ld disrupt the fragile equilibrium once again.0123456789101112131415Jan-19Mar-19May-19Jul-19Sep-19Nov-19Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22Jul-22Sep-22Nov-22Jan-23Mar-23May-23Jul-23Sep-23Henry HubLNG Northeast AsiaTTFOnset of Russia-Ukraine war

289、heightens concerns over Russian pipeline supplyReports of sabotage on the Nord Stream pipelines and threats to energy infrastructure as Europe roiled under concurrent heatwavesInter-monthly standard deviation(USD(real)per MMBtu)Fear of strikes in Australia followed by the strike starting caused pric

290、e hikes in August and SeptemberAverage TTF volatility levels in 2023 are almost 5x higherthan those of 2019 and 2020Source:Rystad Energy;Argus(LNG Northeast Asia)1/Review of the most turbulent year in the history of gasGlobal Gas Report 202332Turbulent LNG markets caused local gas prices to spikeFig

291、ure 38:Wholesale price levels 2005 to 2022 by region35.030.025.020.015.010.05.00.02005 2007 2009$/MMBTU2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022North AmericaEuropeAsiaAsia PacificAfricaWorldLatin AmericaFSUMiddle EastSource:IGUFor importing regions,the gas prices in local markets a

292、re determined by the supply of gas at the market entry point,where these entry point prices in turn are dependent on localised factors,including infrastructure capacity.These regions are typically priced against global LNG prices,as they compete for the same scarce LNG volumes.Throughout 2022 and ex

293、tending into 2023,the massive demand for LNG imports to Europe led to a bidding war between Europe and Asia for these scarce LNG volumes,leading to local gas prices soaring in both regions.This was in turn reflected in Asian spot and TTF pricing developments.As Europes dependence on traded-market LN

294、G has surged,while its previous cushion of long-term contracted Russian pipeline gas has largely disappeared,there is a greater interdependence between Europes market and the other regions.As 2022 demonstrated,this dependence works both ways in an environment of tight global supply where greater dem

295、and competes for limited resources.The impact of the September 2023 strikes in Australian on European gas future prices serves as a compelling illustration of the development of these dynamics,where disruptions that would previously have had limited impact on European markets now caused the price to

296、 soar by about 18%and 13%following the strike warning and the commencement of the strike,respectively.Henry Hubs correlation with other LNG markets has,and could continue to,strengthenMarkets that rely primarily on domestic production to meet local demand have historically developed almost independe

297、ntly of other markets,with prices set by local forces,as can be seen in most of the Middle East and the United States.In 2022,and continuing into 2023,this dynamic was mirrored in the developments of the Henry Hub which averaged a price about five and six times lower than Asian spot and TTF respecti

298、vely.Yet,in both 2022 and up to September 2023,Henry Hubs correlation with other LNG markets exhibited a notable increase compared to previous periods,as it followed the price increases more closely.While LNG exports contributed to these developments,increased local gas demand in the United States,c

299、oupled with constraints in the pipeline infrastructure to meet this demand,also played a significant role.Thus,the increased correlation was not necessarily a causal effect of exports alone.Through a thorough examination,the IGUs Wholesale Gas Price Survey for 2023 revealed a notable surge in the co

300、efficient of variation of prices5 on a global scale.In 2022,it soared to nearly 100%,marking a substantial increase from around 60%in the previous year.In the foreseeable future,Europe expanding its re-gasification capacity and engaging in more spot volume trading,coupled with the United States expa

301、nding their pipeline network,especially from the Permian basin,and increasing liquefaction capac-ity,could set the scene for further price convergence.However,prevailing uncertainties persist regarding various factors,includ-ing European gas demand and 5 The coefficient of variation of prices of a d

302、ataset in a certain year is determined by the standard deviation divided by the mean value of these prices.The amount of absolute price variation(standard deviation)is thus measured relative to the average price in a certain year.A low coefficient of variation indicates a higher level of price conve

303、rgence and vice-versa.1/Review of the most turbulent year in the history of gasGlobal Gas Report 202333High gas prices drove gas-to-coal switchingIf gas prices reach high levels,the potential for switching to alternative fuels comes into play.Typical fuels used in such cases include coal and fuel oi

304、l,for which numerous countries have pre-American associated shale gas exports.Nevertheless,efficient LNG markets going forward should entail TTF prices trading at the HH price with additional shipping,liquefaction,and premiums,and as such being more closely correlated with the HH price.Figure 39:Dai

305、ly European gas prices(TTF)vs coal-switching price in the Netherlands-20 40 60 80 100 120Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22Jul-22Sep-22Nov-22Jan-23Mar-23May-23Jul-23Coal 34%vs Gas 56%Coal 36%vs Gas 54%Coal 38%vs Gas 52%Coal 40%vs Gas 50%Coal 42

306、%vs Gas 48%TTF Day Ahead2022USD per million British thermal units(MMBtu)Figure 40:Monthly average LNG prices vs coal-switching price in Japan-10 20 30 40 50 60Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22Jul-22Sep-22Nov-22Jan-23Mar-23May-23Jul-23Coal 34%v

307、s Gas 56%Coal 36%vs Gas 54%Coal 38%vs Gas 52%Coal 40%vs Gas 50%Coal 42%vs Gas 48%Asia LNG spot price2022USD per million British thermal units(MMBtu)Figure 41:Monthly average Henry Hub gas price vs coal-switching price in the United States-2 4 6 8 10 12 14 16Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21

308、Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22Jul-22Sep-22Nov-22Jan-23Mar-23May-23Jul-23Coal 34%vs Gas 56%Coal 36%vs Gas 54%Coal 38%vs Gas 52%Coal 40%vs Gas 50%Coal 42%vs Gas 48%Henry Hub Fronth Month2022USD per million British thermal units(MMBtu)Source:Rystad EnergySource:Rystad EnergySource:Rys

309、tad EnergyIn figures 39 to 41,Coal 42%vs Gas 48%(grey shaded area)signifies the lower range of the coal-to-gas switching band between high-efficiency coal(42%)and low-efficiency gas(48%),while Coal 34%vs Gas 56%(in dark blue)shows the higher range of the coal-to-gas switching band between low-effici

310、ency coal(34%)and high-efficiency gas(56%).When the yellow line crosses the grey area it is cheaper to turn on the most efficient coal-fired power plants at the expense of the least efficient gas-fired,similarly,if the line is above all of the bands even the most efficient gas-fired power plants are

311、 more expensive than the least efficient coal-fired ones.existing infrastructure that has lain dormant due to environmental concerns and the growing integration of carbon pricing.The choice to switch from gas to coal is commonly evaluated using coal switching price bands.Broadly speaking,when the ga

312、s price exceeds the band,it becomes economically viable to switch to coal.As illustrated in figures 39 to 41,in 1/Review of the most turbulent year in the history of gasGlobal Gas Report 2023342021 the gas price surpassed this band at all trading points.This trend intensified in 2022 for both Asian

313、spot and TTF,driven by the soaring gas prices.In 2022 switching was economically attractive and as such,Europe and Asia saw a coal-fired power generation increase of 1.3%and 2.6%respectively in 2022 compared with 2021.Coal prices rose with increased demand with higher gas to coal switching activity.

314、Leading up to September 2023,the economic justification for coal switching in Asia and Europa has weakened as gas prices have decreased,prompting numerous power generation companies to revert to using natural gas.European carbon prices are incorporated in the European coal-switching price bands,as c

315、oal is a higher emitter than gas.Consequently,a high carbon price makes gas and other low emitters preferable to coal.The beginning of 2022 saw carbon prices Figure 42:European Emission Allowance(EUA)price EU Emission Trading System(EU ETS)EUA price jumped around 300%in one year010203040506070809010

316、0110120May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22Jan-23Feb-23Mar-23Apr-23May-23Jun-23Jul-23Aug-23Phase 3(2013-2020)Phase 4(2021-2030)EUAUSD per tonne

317、of CO2Source:Rystad EnergyEmissionsDespite significant reductions in energy use in many regions in response to the global energy crisis,global emissions from energy still reached a record-breaking level in 2022 of almost 42 gigatonnes.2022 saw the introduction of new energy transition acceleration p

318、olicies,including the Inflation Reduction Act(IRA)in the United States and REPowerEU in Europe.In 2022,total global energy-related CO2 emissions grew by about 1.1%,continuing the upward trajectory.Emissions from natural gas consumption saw a minor decline,partly attributed to price spikes which ince

319、ntivised the adoption of alternative energy sources.As a result of gas-to-coal switching,total emissions from coal increased in 2022 albeit decreasing in portion of total emission mix,reaching an continue to rise from the previous year,favouring coal-to-gas switching.Subsequently,many regions switch

320、ed from using gas to using coal,driven both by economic factors and constraints such as limited import capabilities.A direct consequence of the increased adoption of gas-to-coal switching was a rebound in carbon prices,as energy and coal-related supply chains were required to buy more carbon allowan

321、ces.Figure 43:Global energy emissions,split by energy source40%39%39%39%39%40%40%36%36%35%35%34%34%34%16%17%17%17%18%18%17%8%8%8%8%9%9%9%40,00440,84541,81541,98239,92541,56242,02905,00010,00015,00020,00025,00030,00035,00040,00045,00050,0002016201720182019202020212022CoalLiquidsGasOthersMegatonnes CO

322、2 eq.Source:Rystad Energy1/Review of the most turbulent year in the history of gasGlobal Gas Report 202335Figure 44:Asias power mix(2016-2022),split by energy sourceFigure 45:Europes power mix(2016-2022),split by energy sourceSource:Rystad EnergySource:Rystad EnergyAsian power production continues s

323、trong dependence on coalAsia has experienced a substantial surge in power demand coupled with its robust economic growth over the past decade,and this was primarily met by coal as an energy source.From 2021 to 2022,there was a marginal 0.9%reduction in the use of gas for power generation,while coal

324、saw a notable 2.6%increase.These developments were mainly driven by China,accounting for a about 68.7%of the increase in coal consumption and about 37.5%of the reduction in gas.Looking ahead to 2023,both China and India are sustaining the upward trajectory of coal utilisation for power generation.In

325、 July 2023,these countries exhibited year-on-year growth rates in coal-based power production,with China experiencing a 7.9%increase and India recording an even more substantial 9.3%growth.Coals position in the European power mix continues reversed trendUntil 2021,coal-fired electricity generation h

326、ad been steadily declining in Europe since 2012,in large part thanks to switching to natural gas and renewables.However,in 2021 coal gained positive momentum again due to growing affordability concerns surrounding gas,coupled with availability concerns of renewable energy.In 2022,the shortage of gas

327、 supply in Europe created more positive momentum for coal over gas.Additionally,according to the IEA,EU-countries faced a 58%58%58%56%55%55%54%13%12%12%12%12%11%11%15%15%15%15%15%14%14%6%7%8%9%11%12%13%4%4%5%5%5%5%5%2%2%2%2%2%2%2%2%1%1%1%1%1%1%11 27111 91812 57213 00213 24014 06114 53102,0004,0006,0

328、008,00010,00012,00014,00016,0002016201720182019202020212022CoalGasHydroRenewablesNuclearBioenergyLiquidsOther(non-renewable)TWhall-time high of about 16,752 mega-tonnes of CO2 equivalents.The rise in total coal usage despite worldwide initiatives to diminish its dependency on coal,as it is the main

329、driver of global emissions contributing to climate change highlights that the fuel remains a hard to replace energy source.Coal has been responsible for roughly 40%of the annual energy-related emissions consistently over the last years,as seen in Figure 43.24%24%23%24%22%22%19%21%20%18%15%12%13%14%1

330、7%18%17%20%19%18%19%16%17%18%20%23%23%26%15%14%15%14%16%15%14%5%5%5%5%5%5%5%3 9363 9353 9703 8983 7653 9203 81801,0002,0003,0004,0005,0002016201720182019202020212022NuclearCoalGasRenewablesHydroBioenergyLiquidsOther(non-renewable)TWh1/Review of the most turbulent year in the history of gasGlobal Gas

331、 Report 202336Figure 46:Changes to power consumption in EU countries(2021-2022),by generating source-119-6652839331NuclearHydroGasCoalSolarWindOther*2022 Demand0-20-40-60-80-100-120-140-160-180-200-792021 total demand=2,888 TWhThe uptick in coal and gas would have been a lot higher without wind and

332、solar growth2022 total demand=2,809 TWhTWhYOY decliningYOY growingYOY total changesDecreases in nuclear and hydro generation offset by increases in power generation from gas,coal,solar,wind,and other sourcesSource:Ember monthly electricity dataThe direct effect of gas-to-coal switching on power-rela

333、ted emissions6 Includes bioenergy,other renewables,other fossil fuels and net imports.6Table 3 illustrates the different carbon intensities of coal,liquids,and gas.Natural gas has an emissions profile that is about 50%lower than coal and about 20%lower than liquids,making switching from coal and liquids to natural gas in power generation a way to significantly reduce emissions.There are multiple p