LNG Market Outlook Featured Article

After declining in 2023, LNG imports are forecast to increase for Europe in 2024 and 2025. Gas demand has declined drastically since the beginning of the Ukraine war but utilizing storage to ensure energy security remains a key driver of LNG imports. Gas demand is forecast to see growth in 2024 as lower prices encourage some higher demand from the power, residential and commercial sectors.The

LNG import forecast for Europe has been lowered because of greater transparency in the historical data on ship-to-ship transfers and re-exports in the region. Belgium, France, the Netherlands and Spain are the largest re-exporters in Europe. The 2023 LNG import data for Europe now shows 125 MMt as opposed to 128.6 MMt in the previous forecast. Growth rates for the 2024 and 2025 LNG import forecast were kept constant at 1% in 2024 and 2% in 2025 to 126.3 MMt and 129 MMt, respectively. In the forecast, as well as recent history, storage and gas demand will be the major factors influencing LNG imports for Europe.
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Europe LNG Import Forecast Comparison

Storage levels in Europe for end-2023 were around 87 Bcm or roughly 90% full due to mild weather in 4Q, limiting upside potential in European gas demand. However, there has been roughly 26 Bcm in withdrawals made since the start of 2024 on a rise in demand from the power, residential and commercial sectors. Storage levels are near 61 Bcm through 1H March 2024 and are likely to continue falling through the remainder of the month.

April 2024 marks the beginning of the shoulder season and Europe will need to meet the requirement of having inventories 90% full by Nov. 1 to ensure energy security. Based on the current forecasts on production, imports and demand, storage levels are forecast to show an increase of about 2 Bcm to 63 Bcm in April 2024 and reach the storage target by August – similar to what occurred in 2023 in terms of storage.

Europe Storage Forecast

Gas demand has retreated significantly in Europe since the beginning of the war in Ukraine due to higher gas prices, voluntary demand cuts from the industrial sector and higher renewable power output. Gas demand fell from 479 Bcm in 2020 to 417 Bcm in 2023, but is forecast to increase on lower prices. Lower gas prices and higher coal prices are expected to increase coal-to-gas switching in the power sector in 2024 leading to a 1.5% demand increase from the power sector to 89.5 Bcm. However, higher renewable output may negate the forecasted increase. Residential and commercial demand is forecast to increase in 2024 to 144 Bcm from 137.5 Bcm in 2023.

Europe Gas Demand Forecast