The International Energy Agency projects a significant increase in global demand for liquefied natural gas next year, mostly driven by intensified pursuit of the resource in Asia and Europe.
This surge in demand is set against a backdrop of geopolitical tensions and strategic energy shifts including Russia’s invasion of Ukraine.
According to the IEA, 2025 is expected to see Europe requiring more LNG, potentially leading to tighter supplies and higher prices. Data shows that global gas demand could reach 4,293 billion cubic metres by next year, nearly 100 billion cubic metres more than in 2024.
This development comes at a time when the threat of Russian gas supplies being cut off via Ukraine looms large, exacerbating the continent’s energy security concerns.
Despite a slight decrease in overall gas use in Europe, attributed to a slow recovery in industrial sectors and a transition towards renewable energy, the demand for LNG remains robust, particularly for power generation and heating.
Europe’s energy costs, while receding from the peak crisis levels witnessed in 2022, continue to hover above historical averages. This persistent high cost is largely influenced by ongoing conflicts, notably in Ukraine and the Middle East, which have disrupted traditional gas supplies and market stability.
Conversely, Asia is poised to be the powerhouse of LNG demand growth. Despite Europe’s strategic pivot towards renewables, the Asian market’s hunger for energy continues unabated, driving global LNG trade.
Countries like China, Japan, and South Korea are at the forefront of this demand, fueling their industrial and economic growth with LNG imports.
The IEA projections dispute former Greenpeace activist and Berlin’s special envoy for international climate action Jennifer Lee Morgan’s claim featured by CBC News that the European continent’s natural gas appetite was set to shrink.
“All studies show that the market is going to shrink,” Morgan told CBC News. “Germany will be driving forward on renewables, and gas demand will decline.”
Instead, Conservative Leader Pierre Poilievre has pledged to increase LNG exports to Europe, leveraging the missed opportunity highlighted by Prime Minister Justin Trudeau’s past refusal of a German request for Canadian LNG.
Trudeau’s decision was based on what he deemed a lack of a “business case.”
Meanwhile, the United States has effectively filled this supply gap, with U.S. LNG exports now covering two-thirds of Europe’s needs.
