H1 2023: In the US, Natural gas prices showed a bearish price trend in the first four months of 2023. Due to an issue with one of its three liquefaction trains, the Freeport LNG exports terminal unexpectedly cancelled some shipments in February. The Henry Hub Natural Gas cost continuously declined from January 2023. Also, the decrease in natural gas trade volume had an impact on producers' profit margins and sales. Consumer sentiment remained muted, and the industries were running at lower capacity. However, the natural gas market turned optimistic in May and June. As inflation declined, industrial sector demand rose. The downstream demand had a favorable impact on US natural gas prices. In the Asia Pacific region, Natural Gas prices fluctuated during H1 2023. Due to hazy consumer demand and sufficient supply stockpiles, prices kept declining till April 2023. China's LNG imports decreased as the region's domestic output increased and product stockpiling was caused by pipeline imports. The decrease in downstream power-generating usage of natural gas has also harmed the pricing trend. Prices showed a bullish trend in May and June as commercial demand improved but industrial demand remained poor in Asian countries like India and China.
The global natural gas market is demonstrating robust growth. As the global push for cleaner and more efficient energy sources intensifies, the natural gas market stands poised for further expansion and is expected to report a rise at a CAGR of 2.80% during the period from 2023 to 2032.
Comprising primarily of methane and ethane, natural gas is renowned for its clean-burning properties, cost-effectiveness, and versatility. It is extensively utilized across sectors, such as electricity generation, residential and commercial applications, petrochemicals, and pharmaceuticals. Coexisting frequently with crude oil, natural gas is a crucial component of the petroleum industry. Distinguished by its attributes of clean combustion, adaptability, cost-effectiveness, and high efficiency, natural gas stands apart from other fossil fuels and enjoys a prominent role in meeting energy demands worldwide. Its multifaceted applications encompass power generation, industrial operations, product manufacturing, heating and cooling, and transportation fuel.
As per the U.S. Energy Information Administration (EIA), the United States recorded a daily natural gas consumption of approximately 87.9 billion cubic feet during FY 2022, surpassing other sectors in usage. However, a decline in consumption, particularly in the New England region, is expected due to possible restrictions on natural gas pipelines, reduced fuel inventories for electricity generation, and uncertainties surrounding liquified natural gas (LNG) shipments due to global supply constraints.
In 2022, the worldwide natural gas market encountered a massive setback when Russia cut off its pipeline shipments to Europe. This action exerted unprecedented strain on supply chains and catalyzed a worldwide energy crisis. Despite these challenges, European nations managed to surpass historical storage levels in their underground gas reservoirs. This accomplishment was made possible by a strategic blend of targeted policy initiatives, a notable influx of liquefied natural gas (LNG), and a substantial reduction in consumption, notably within energy-intensive sectors. Beyond Europe, the impact of Russia's pipeline reduction resonated across other gas-consuming regions, leading to record high spot prices, supply tensions, and notable drops in demand.
Market Drivers
High Demand in Residential and Commercial Sectors
The natural gas market is undergoing a robust resurgence, propelled by a surging demand emanating from the residential and commercial sectors. This adaptable and multifaceted energy resource takes center stage in providing efficient heating and cooling solutions for households, thereby greatly influencing its widespread integration. Remarkably, a substantial percentage of homes across the United States hinges on natural gas, with the residential sector commanding a noteworthy 12% slice of the nation's total gas consumption. This unmistakable reliance underscores the indispensable role that natural gas plays in addressing the everyday energy requisites of modern living.
Rising Need for Cleaner and Sustainable Energy Solutions
A key driving force propelling the global natural gas market stems from the escalating demand for cleaner and sustainable energy solutions. As worldwide consciousness regarding environmental issues and climate change gains momentum, a marked shift away from carbon-intensive fuels such as coal and oil is evident, with a pronounced gravitation towards greener alternatives. Natural gas, a fossil fuel with comparatively lower carbon emissions, emerges as a crucial intermediary energy source, holding the potential to curtail greenhouse gas discharges in contrast to conventional counterparts. This demand surge is amplified by the impetus of governmental policies, regulatory frameworks, and international accords, all meticulously designed to curtail emissions and expedite the transition to cleaner energy production. Fortified by its reputation as a fuel renowned for cleaner combustion, the natural gas market solidifies its position as the favored choice for fulfilling energy requirements, while concurrently mitigating environmental repercussions.
Increasing Application as Crucial Feedstock for Petrochemical Refineries
Natural gas has evolved into a catalyst for innovation and diversification, fueling its increasing demand across sectors. Beyond its essential function as a fuel, natural gas assumes a vital position as a crucial feedstock for petrochemical refineries. This enables the production of a wide range of indispensable products that contribute to various industries. Additionally, natural gas is spearheading transformation in the transportation sector by emerging as a potent and eco-friendly fuel source for natural gas vehicles. This dynamic expansion of applications showcases the intrinsic adaptability of natural gas, making it a key driver in meeting diverse and evolving energy needs on a global scale.
Market Restraints
Irregular Electricity Access in Rural Regions
Irregular electricity access and outages in rural regions lead to reduced power consumption. This can subsequently diminish market demand and impede the expansion of the natural gas sector. As rural consumers adapt to irregular power availability, their energy usage fluctuates, directly influencing the need for energy sources, especially natural gas.
Geopolitical Uncertainties and Supply Disruptions
The global natural gas market remains exposed to geopolitical tensions, conflicts, and supply disruptions in key supply regions. Dependence on specific supply routes makes the market susceptible to supply chain uncertainties, price volatility, and potential interruptions due to geopolitical factors. Sudden changes in political dynamics can create instability in supply, affecting market stability and influencing pricing trends. For instance, the impact of Russia's pipeline cut-off to Europe in 2022 extended to gas-consuming regions across the world, resulting in a significant reduction in demand due to unprecedently high spot prices.
Trends & Opportunities
Rapid Expansion of Electric Power Industry
The rapid expansion of the electric power industry, specifically in the United States, plays a key role in propelling the worldwide natural gas market. As the electricity demand continues its relentless ascent, the market foresees an impending upsurge in the need for natural gas. This anticipated rise in demand has the potential to fuel natural gas consumption over the next few years. This progression toward heightened consumption further underscores the essential significance of natural gas as a fuel source for powering the electric power sector, a fundamental cornerstone within the dynamic landscape of evolving energy trends.
End-Use Analysis
Power generation, industrial sector, residential and commercial sector, and several other segments have surfaced as the key end users of natural gas across the world. Among these, the power generation segment has occupied the leading position in the global natural gas market. Natural gas serves as a reliable and cleaner-burning fuel source in power plants. Combined cycle gas turbines (CCGT) and gas-fired power plants are instrumental in generating electricity with exceptional efficiency. Their operation not only aids in maintaining grid stability but also plays a crucial role in meeting periods of heightened demand, such as peak load situations. The factors are fueling the consumption of natural gas in the power generation sector and are likely to continue supporting the segment to maintain its dominance even over the forecast period.
The second leading end-use segment is the industrial sector. Industries depend on natural gas to process heating, steam generation, and powering machinery. With the increasing usage of natural gas in diverse manufacturing processes due to its clean combustion and abundant energy, this segment is expected to retain its position over the next few years.
Regional Analysis
The global natural gas market reports its presence across North America, Europe, Asia Pacific, South America, and the Middle East and Africa. Europe has established itself as a prominent importer of natural gas across the world. In 2022, the region registered a demand volume of 39580 MMBtu and emerged as the global leader in the market. With significant investment in interconnectors, storage facilities, and LNG terminals, the market is likely to continue at the top position over the forecast period.
Standing next to Europe is North America. With rapid industrialization, the region is expected to remain prominent in the global natural gas market in the forthcoming years.
Competitive Landscape
Saudi Arabian Oil Co (Saudi Aramco), Royal Dutch Shell, BP Plc., Exxon Mobil Corp., PetroChina Co. Ltd. ADR, Total SE, China National Petroleum Corporation (CNPC), Chevron Corp., Gazprom, and Petrobras are some of the key producers of natural oil across the world.
Years considered for this report:
Historical Period: 2015-2022
Base Year: 2022
Estimated Year: 2023
Forecast Period: 2024-2032
This report will be delivered on an online digital platform with one-year subscription and quarterly update.
The objective of the Study:
• To assess the demand-supply scenario of natural gas, which covers the production, demand, and supply of the global natural gas market.
• To analyze and forecast the size of the global natural gas market.
• To classify and forecast the global natural gas market based on end-use and regional distribution.
• To examine competitive developments, such as expansions, mergers & acquisitions, and partnerships, of the global natural gas market.
To extract data for the global natural gas market, primary research surveys were conducted with natural gas manufacturers, suppliers, distributors, wholesalers, and traders. While interviewing, the respondents were also inquired about their competitors. Through this technique, ChemAnalyst was able to include manufacturers that could not be identified due to the limitations of secondary research. Moreover, ChemAnalyst analyzed various segments and projected a positive outlook for the global natural gas market over the coming years.
ChemAnalyst calculated the demand for natural gas in the world by analyzing the historical data and demand forecast which was carried out considering the demand for natural gas by the end-user industries across the world. ChemAnalyst sourced these values from industry experts, and company representatives and externally validated them by analyzing the historical sales data of respective manufacturers to arrive at the overall market size. Various secondary sources such as company websites, association reports, annual reports, etc., were also studied by ChemAnalyst.
Key Target Audience:
• Natural gas manufacturers and other stakeholders
• Organizations, forums, and alliances related to natural gas distribution
• Government bodies, such as regulating authorities and policymakers
• Market research organizations and consulting companies
The study is useful in providing answers to several critical questions that are important for industry stakeholders, such as natural gas manufacturers, customers, and policymakers. The study would also help them to target the growing segments over the coming years (next two to five years), thereby aiding the stakeholders in taking investment decisions and facilitating their expansion.
Report Scope:
In this report, the global natural gas market has been segmented into the following categories, in addition to the industry trends, which have also been detailed below:
Attribute
Details
Market Size Volume in 2022
1,42,360 MMBtu
Market Size Volume by 2032
1,85,300 MMBtu
Growth Rate
2.80%
Base Year for Estimation
2023
Historical Data
2015 - 2022
Forecast Period
2024 - 2032
Quantitative Units
Demand in Mn Tons and CAGR from 2023 to 2032
Report Coverage
Industry Market Size, Demand by End-Use, Demand by Region, Demand by Sales Channel, Demand-Supply Gap, Foreign Trade
Segments Covered
By End-Use: Power Generation, Industrial Sector, Residential and Commercial Sector, and Others
By Sales Channel: Direct Sales and Indirect Sales
Regional Scope
North America, Europe, Asia Pacific, the Middle East and Africa, and South America.
I am satisfied with overall performance of ChemAnalyst. Weekly updates before the final report were especially helpful and reassuring. Additional requests on the interim and/or final reports were handled in a swift and professional manner
Mr.Shin Dosho
Member - Board of Directors
Osaka Gas Co. Ltd
Disruption Tracker
Disruption Tracker reflect the major shutdown on monthly basis which will help you in
tracking the inventory management and smooth functioning of business. Unforeseen shutdowns and disruptions
resulting in a loss of production capacity to impact the bottom line. The capacity tracker provides industries
with a global view of production and consumption capacity loss that reflects the corresponding conversion factors.
It also highlights the immediate impact on supply due to planned and unplanned outages as well as upcoming start-up
of new capacities. Additionally, it emphasizes how each shutdown—whether due to a maintenance turnaround or a case
of force majeure, affects the plant's operating rate for the given duration. Disruption tracker gives a clear insight
into the worldwide outages affecting the commodity of interest. With every shutdown, it also reflects the impact on
supply of the product in the market at a Global level.
What are the key factors driving the global natural gas market?
Ans:
The increasing need for electricity from clean energy sources is boosting the global natural gas market. The rising demand for natural gas in the commercial and residential sector is likely to aid the market over the next few years.
Q2.
Which is the leading end-use segment in the global natural gas market?
Ans:
The power generation sector is the dominant end-use segment in the global natural gas market.
Q3.
Which region is likely to lead the global natural gas market during the forecast period?
Ans:
Europe is likely to lead the global natural gas market during the forecast period.
Q4.
Who are the key players in the global natural gas market?
Ans:
Saudi Aramco, Royal Dutch Shell, BP Plc., Exxon Mobil Corp., PetroChina Co. Ltd. ADR, Total SE, CNPC, Chevron Corp., Gazprom, and Petrobras are the key players in the global natural gas market.
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