The International Energy Agency (IEA) said it carried out new analysis and identified a challenging 30 billion cubic metres supply-demand gap in the 2023 Northern Hemisphere summer season.
The Paris-based IEA said that the gap would occur at a key time for refilling European Union storage as Russian volumes remained cut off and Chinese LNG imports began to rebound for the 2022 drops.
The IEA repeated its support for governments taking measures to reduce natural gas consumption amid the global energy crisis.
The new report is called “Never Too Early to Prepare for Next Winter: Europe’s gas balance for 2023-2024”.
It states that gas storage sites in the EU are now 95 full and putting them 5 percent above the five-year average fill level.
However, the report cautions that the cushion provided by current storage levels, as well as recent lower gas prices and unusually mild temperatures, should not lead to overly optimistic conclusions about the future.
Filling
“The process of filling EU gas storage sites this year benefitted from key factors that may well not be repeated in 2023,” explained the IEA.
“These include Russian pipeline gas deliveries that, although they were cut sharply during 2022, were close to ‘normal’ levels for much of the first half of the year,” added the report.
“Total pipeline supply from Russia to the EU in 2022 is likely to amount to around 60 Bcm, but it is highly unlikely that Russia will deliver another 60 Bcm of pipeline gas in 2023 and Russian deliveries to Europe could halt completely,” stated the IEA.
The agency noted that China’s lower LNG imports in the first 10 months of this year have been a key enabler of higher LNG availability for Europe to compensate for the drop in gas deliveries from Russia.
“If China’s LNG imports recover next year to their 2021 levels, this would capture over 85 percent of the expected increase in global LNG supply,” noted the IEA.
“And global LNG supply is expected to increase by only 20 Bcm in 2023, with about one-third of the growth coming from the United States,” said the report.
“The expected rise in global LNG supply next year is about half the average increase during the 2016-2019 period and much less than the likely decline in Russian pipeline deliveries to the EU next year,” it declared.
The IEA Executive Director Fatih Birol commented that with the recent mild weather and lower gas prices, there is a danger of complacency on Europe’s gas supplies,.
“When we look at the latest trends and likely developments in global and European gas markets, we see that Europe is set to face an even sterner challenge next winter,” he stated.
