Global Gas Trade Continued Its Move to Competitive Gas on Gas Pricing, while the Global Wholesale Gas Price Levels Cooled Off Slightly in 2023

AMSTERDAM, April 23, 2024 /PRNewswire/ -- Flame Conference - The International Gas Union (IGU) releases its 2024 Global Wholesale Gas Price Survey report, the 16^th undertaken since 2005.

The share of spot LNG rose sharply in 2023 to 38% (3% YoY), with the overall share, in LNG imports, of Gas-on-Gas pricing rising to just under 50%, continuing a decade trend of growth, as the global gas market continues to mature. Demand rebound in China and further growth in spot LNG imported into Europe contributed to the rise. The total volume of globally imported GOG priced gas via LNG and Pipeline reached an all-time high of 57%, with Oil Price Escalation (OPE) at 36% and the remaining 7% priced through bilateral direct agreements between large buyers and sellers (BIM). 

World LNG Imports by Price Formation and % of Spot

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GOG share of total consumption has remained at half of global consumption, crossing slightly under the halfway mark at 49.7% due to a domestic change in India and reduced consumption in Europe. OPE benefited from India's decision to change its domestic pricing mechanism, moving away from linkage to international hub prices to oil linked pricing. While elsewhere, there remains a large area of the world covering the Former Soviet Union, the Middle East and North Africa where prices are still largely regulated.

Global wholesale prices continued to significantly vary across regions, with Europe still remaining highest priced. 2023 saw the global gas market starting to find a new point of fragile balance, with the average World price, easing back to $5.70 per MMBTU, from $9.48 in 2022. However, this was still the second highest average price recorded by the surveys since 2005, with significant regional differences persisting. The highest 2023 prices were found in Europe at $15.83, impacted by the still high average spot LNG prices.  Asia Pacific prices averaged $11.56 and Asia had average prices at $9.16.  While prices in North America in 2023 were below the average for Latin America and even Africa and as expected in dollar terms, the Former Soviet Union and the Middle East, were the lowest.

Global Wholesale Natural Gas Price Levels by Region

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With larger influx of LNG into the Asian market, and more of it being priced competitively, the presence of GOG pricing in Asia has also been strengthening over the recent years. Since the start of the IGU GWPS report series, Asia has seen an evolution of its price formations, albeit more gradually, from predominantly non-market regulated pricing to more and more market-based pricing. OPE still largely dominates, yet GOG has undoubtedly played a bigger role. Asia is going to be key to the future gas markets evolution as the driver of 40% of global gas consumption growth accounting for 22% of total gas consumption in 2023 (compared to 14% in 2005).

IGU President, Madam Li Yalan stressed:

The maturing and growing flexibility of a truly global gas market are welcome signs from this year's survey results. Global gas market functioning and liquidity remain pivotal to energy security and the reliability of the global energy systems, as the world continues to face a great amount of turbulence amidst the ongoing energy crisis and continuing significant geopolitical risks in a tight and fragile market. 

About the Report

The Annual IGU Wholesale Gas Price Survey report was launched in 2005. It is a unique global database on the evolution of gas markets, changes in gas price formation mechanisms, and wholesale gas prices. The 2024 Edition includes data covering 98% of total world natural gas consumption and can be downloaded at www.igu.org/resources

About the International Gas Union (IGU) 

The IGU represents the global gas industry with more than 140 members in over 80 countries, covering 90% of the global gas market across every segment of the gas value chain. The IGU organises the world's leading international gas events, including the World Gas Conference (WGC), the International Gas Research Conference, and the World LNG conference series. www.igu.org

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SOURCE International Gas Union (IGU)