Global gas and LNG markets have gone through arguably the most turbulent year in their history. Gas prices in 2022 increased exponentially and spiked above $90 per million British thermal units – a level not seen before. Europe has strived to find solutions to secure supplies to replace Russian piped gas volumes lost due to sanctions imposed on the country following its invasion of Ukraine early last year. The solution has been the curtailment of demand from the industrial sector combined with increased LNG imports. Energy security has been increasingly prioritized by governments all over the globe, coupled with an urgent push for the energy transition to move into the fast lane. This begs the question: should the world rely on gas to secure reliable, affordable and sustainable energy supply – and to what extent?

Russia’s assault on Ukraine and the resultant war caused an uptick in LNG activity across the globe. As of April this year, global LNG trade has connected 20 exporting markets with 48 importing markets, including the likes of Germany and the Philippines as first-time LNG importers. The increase in LNG imports was to a large extent driven by Europe (including Turkey) in 2022 – a year that saw the largest annual increase of 50.4 million tones (+66% compared to 2021) – making it the second-largest importing region globally after Asia Pacific. This was also evidenced by the surge of investments in regasification facilities in Europe, with more than 10 countries on the continent initiating the construction of new LNG-receiving capacity. Will all these new projects be required and will they be financially viable beyond 2030? Can gas be the bridging fuel between coal and renewables in the energy transition? And if so, for how long?

At Rystad Energy, we believe gas and LNG markets will play a critical role in facilitating the energy transition and, as we continue our efforts to help stakeholders reduce their carbon footprint and secure stable supplies of energy, we see renewables and their inherent intermittency grow as part of the global energy supply landscape.

For more insights on this and other topics, please join us at the upcoming Rystad Talks Industry webinar on 10 August and Rystad Energy Week later this year, consisting of two digital and three in-person regional events. Registration is now open.