Page 121 - RusRPTNov23

natural gas demand to slow through 2026 after peaking in 2021 in developed markets such as Europe and North America. The IEA notes that global demand will grow by an average of 1.6% per year from 2022 to 2026, compared to growth of 2.5% between 2017 and 2021. Russia's invasion of Ukraine reduced pipeline gas supplies to Europe from Russia, which triggered a massive development of RES. At the same time, demand will grow in the markets of Asia, the Middle East, and Africa. China alone will account for half of the total growth in global demand by 2026.
Natural gas prices in Europe gained over 5% during the exchange trading on barrage began on October 10 and climbed above $500 per 1,000 cubic meters for the first time since late August, according to ICE data.
Russian gas demand can grow by 6% by 2026 and return to record levels, according to the medium-term gas market report by the International Energy Agency (IEA).
In 2021, demand for natural gas in Russia reached an all-time high of 516 billion cubic meters, and decreased by 5.5% in 2022.
"Russia’s natural gas demand is expected to remain broadly flat in 2023, as higher gas burn in the power sector is offset by the continued reduction in gas use in the industrial and transport sectors. Gas demand is projected to return to growth in 2024 and expand by 6% (or close to 30 bcm) between 2022 and 2026, largely supported by the industrial and power sectors," the agency says.
According to the agency’s calculations, gas demand in Russia in 2026 will reach 517 bln cubic meters.
Industrial gas demand could increase by 10% (or more than 10 billion cubic meters) between 2022 and 2026, accounting for a third of total demand growth, the IEA predicts. However, about 60% of industrial demand growth will come from the recovery from the sharp contraction in 2022. It is also expected that the increase in gas demand will be driven by increased fertilizer production, primarily by increased ammonia production.
Demand for natural gas from the Russian energy sector will grow by an average of less than 1% per year during 2022-2026, in the residential and commercial sectors by 1.5% per year "largely supported by the gasification program carried out by Gazprom", and in transport sector it will grow by 10 % (or 3.5 billion cubic meters) during 2022-2026.
Russia's gas industry is diversifying to increase eastwards sales and develop production of liquefied natural gas (LNG), Deputy Prime Minister Alexander Novak told channel Rossiya 24 on October 12. The official also said that the main goal of the OPEC+ alliance efforts is to balance demand and
121 RUSSIA Country Report November 2023 www.intellinews.com