Europe Gas & LNG Market Outlook 2024
Summary
Europe's natural gas supply peaked but is now in decline due to policy shifts favoring renewable energy and reduced reliance on fossil fuel imports. Despite this decline, high industrial gas usage and residential heating needs create favorable conditions for continued exploration and production. Although a rebound in industrial and heating use is anticipated, overall gas demand is projected to decrease, primarily driven by a reduction in gas-powered electricity generation. Renewable energy sources, such as wind and solar, are gradually replacing thermal power, with significant changes expected by 2028, followed by a plateau in the transition. The EU considers natural gas a transitional energy source, focusing on a gradual shift from coal to renewables, ensuring relatively stable gas momentum in the short to medium term.
Europe's gas pipeline network, spanning over 160,000 km, is set to expand by an additional 10,662 km by 2030, with major projects enhancing capacity and reliability. European countries are also significantly increasing their regasification capacity by 2025, particularly in response to the Ukraine invasion in 2022. Geopolitical events, such as the Nord Stream pipeline sabotage and Gazprom's decisions impacting the Yamal-Europe pipeline, have accelerated the phase-out of russian gas more than the EU's initiatives. Over the past year, European hub prices remained below Asian spot LNG prices due to high inventory levels and increased piped gas deliveries.
Scope
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