The GECF Affairs Division of the Directorate of OPEC and Int’l Energy Fora of Iran’s Ministry of Petroleum released a report in February to review global gas market and trading in January.

According to this report, one year into the Russia- Ukraine tension, world energy market is still affected by ensuing tensions. The EU has sought to adopt preventive policies with a view to significantly reducing dependence on Russian oil and gas imports; however, shocks caused by eliminating Russia from this market have changed the rules of game and even terms of gas contracts. Heavily dependent on Russian gas imports, the Europeans are trying to enhance their gas storage to withdraw in emergency conditions and minimize harm from this crisis. A moderate winter enabled Europe to weather much-feared crisis that loomed large over the continent. Gas consumption in Europe has dropped year-on-year, which is justified by energy efficiency policies, increased use of coal and hydroelectric energy.

Europe gas output down 5%    

In December 2022, gas production in Europe fell 5% year-on-year while growing 3% month-on-month to 17.6 bcm thanks to increased output from Norwegian, British and Dutch fields. That is while gas production experienced growth in North America, China and India.

China’s gas production in December 2022 grew 6% year-on-year and more than 8% month-on-month to reach a record 20.4 bcm. China’s gas production totaled 217.8 bcm in 2022, up 16% from the year before.

India’s gas production in December 2022 grew 5% year-on-year and 4% month-on-month to 2.9 bcm. India’s gas production totaled 33.6 bcm in 2022, up 4% from the preceding year.

In the United States (48 states), dry natural gas production grew 5% year-on-year to 86.3 bcm in January. The 48 states’ dry natural gas production totaled 999 bcm in 2022.

Gas consumption down

EU gas consumption was down 19% year-on-year to 40 bcm in January. More-than-average temperatures affected meeting demand in the housing sector. Add to this the impact of EU regulations on gas saving and high gas prices in European hubs that reduced gas demand in the industrial sector. In January, power generation by gas was down 13% year-on-year while the EU’s overall power generation was down 3% due to replacement of gas with coal due to high prices and hydroelectric power generation.

In December 2022, despite relaxation of COVID-19 restrictions and cold weather in China, gas demand by this country (including piped natural gas imports, LNG and domestic production) was down 3.3% year-on-year to reach 34 bcm.

China’s December power generation increased 6% year-on-year, but gas-generated power increased only 2% year-on-year. Coal remained the dominant fuel in the power plants’ fuel mix with a 66% share only to be followed by renewables (15%), hydropower (9%), nuclear (5%) and gas (3%).

In December 2022, India’s gas consumption was down 6% year-on-year to 4.8 bcm. The share of LNG in India’s gas supply was down 41%.

In January, the US gas consumption was down 8.8% year-on-year to 92 bcm. The housing, business and industrial sectors respectively experienced 23%, 11% and 4% decline. The main reason for the fall in gas demand was increased temperature in most regions and reduced industrial activities.

Piped gas down 35%

EU natural gas imports by pipeline continued its downward trend to reach 12.7 bcm in January, down 35% year-on-year. Although Norway and Republic of Azerbaijan pumped more gas to Europe, piped gas supply to Europe was down in 2022 due to the decline in Russia’s gas exports, a trend which was maintained in January.

In 2022, Norway’s gas supply to Europe was up 8%, but Russia’s gas exports dropped 55%. Throughout last year, Norway supplied 45% and Russia supplied 31% of EU gas imports.

In December 2022, China piped in 4.9 bcm of natural gas, which was down 7% month-on-month and up 5% year-on-year.

In November 2022, the US piped in 4.3 bcm of natural gas from Canada, which was down 7% month-on-month and down 1% year-on-year.

Global LNG

Global LNG imports was down 1.4% year-on-year to reach 36.7 million tonnes, due to weak LNG imports in all regions except in Europe. Europe’s LNG imports grew 6% year-on-year to reach 12.2 million tonnes to make up for shortcomings by pipelines.

Meantime, Asia’s LNG imports were down 2% year-on-year to reach 23.8 million tonnes, caused by lower LNG imports in China despite easing COVID-19 restrictions.

In January 2023, global LNG exports reached 35.56 million tonnes, up 2.8% year-on-year. The increase was mainly due to higher exports by non-GECF countries alongside GEFC exports and a 26% increase in LNG reloading in Spain, Indonesia and South Korea, which compensated lower LNG reloading in Belgium, Singapore and China.

The GECF member states accounted for 49.7% of global LNG exports, down 1.2% year-on-year. Qatar was the leading LNG exporter to be followed by the US and Australia.

Underground gas storage

Since all European countries had gone beyond their storage targets in the run-up to November 2022, they are currently withdrawing from their storage facilities. In January, average daily gas storage fell to 82.5 bcm from the 89.3 bcm recorded a month before. Europe’s January stored gas was 34.8 bcm higher year-on-year. It was also up 19.1 bcm from five-year average. Underground stored gas use was down to 79%. In January, gas injection into underground gas facilities in Europe stood at 1.5 bcm, 13.1 bcm of which was withdrawn.

In North America, underground gas storage was 134 bcm. In January, average daily gas storage fell to 91.8 bcm from the 78.1 bcm recorded a month before. It was up 2.1 bcm year-on-year and 1.7 bcm compared with five-year average.

Europe share of gas finds

Natural gas and liquid discovery in 2022 totaled 1,027 million barrels of oil equivalent (boe), including 94% natural gas. That represents significant figure when compared with the 148 mboe discovered in November 2022 and 296 mboe in December 2021. Therefore, December 2022 can be considered an important month in terms of new discovery.

In December 2022, eight new discoveries were reported, including 6 offshore and 2 onshore ones. Europe accounted for 59% of natural gas finds and Africa accounted for 26%.

In January this year, the operating natural gas drilling rigs, representing upstream activities, totaled 412, up 11 month-on-month and 57 year-on-year.

Iran Petroleum