The global liquefied natural gas (LNG) market has found a new, but fragile, equilibrium following two years of volatility, according to a report by the International Gas Union (IGU). The report highlights that the limited spare supply in the near-term is the primary factor behind this fragile state.
In 2023, global LNG trade reached a record level of 401.42 million metric tons, growing by 2.1% or 8.4 million tons from the previous year. This growth was driven by high spot purchases due to a gradual decline in prices. However, the pace of growth was lower than the 5.6% seen in 2022, as limited supply remains the primary growth-limiting factor.
LNG is widely seen as a transition fuel on the path to net-zero emissions and is playing a critical role in helping countries, especially in Asia, achieve their energy transition goals. The report also highlights the importance of LNG imports for the European Union, as they have raced to replace Russian fuel following Moscow’s invasion of Ukraine in 2022. LNG imports have been instrumental in replacing a substantial share of Russian gas pipeline supplies.
The IGU represents the global gas industry with more than 150 members in over 80 countries, covering over 90% of the global gas market.