Exporters’ Forum: Prolonged decline in European gas demand

Gas demand in Europe continues to fall, says Exporters' Forum. Despite the fall in consumption, European countries are building up their storage reserves in preparation for winter, with a supply rate of almost 90%. The report highlights the impact of factors such as weather conditions and Europe's energy sobriety targets.

Share:

Comprehensive energy news coverage, updated nonstop

Annual subscription

8.25$/month*

*billed annually at 99$/year for the first year then 149,00$/year ​

Unlimited access • Archives included • Professional invoice

OTHER ACCESS OPTIONS

Monthly subscription

Unlimited access • Archives included

5.2$/month*
then 14.90$ per month thereafter

FREE ACCOUNT

3 articles offered per month

FREE

*Prices are excluding VAT, which may vary depending on your location or professional status

Since 2021: 35,000 articles • 150+ analyses per week

Gas demand in Europe fell sharply in the first half of 2023, and this trend looks set to continue in the second half of the year, says the Gas Exporters Forum (GECF), in a report seen by AFP on Thursday.

Gas storage in Europe ahead of winter despite falling consumption

Under scrutiny since the start of the war in Ukraine, which has complicated gas supplies to the EU deprived of Russian pipelines, consumption fell by 10.6% in the first half of 2023, or 21 billion cubic meters, according to the report. This decline can be explained “primarily by the exceptionally warm winter that enveloped the EU in the first quarter of 2023”, leading to a drop in household heating demand, according to the report.

He also cites the voluntarist policy of Brussels, which has set a 15% consumption reduction target for its 27 member countries. In the second half of 2023, “the probability of observing similar trends in natural gas consumption in Europe remains particularly high”, according to the GECF, which represents a dozen gas-exporting countries outside the USA.

In particular, it relies on the most recent weather forecasts “which suggest that the fourth quarter of 2023 will be characterized by relatively warmer conditions”.

Beyond this element, which remains open to question, the report underlines the need to pursue Europe’s voluntarist sobriety policy. The report mentions the fall in demand from the industrial sector, “unlikely to see any substantial recovery over the next six months”. GECF points to the first half of 2023 as evidence of this: despite a fall in gas prices in Europe, industrial demand has not returned to pre-decline levels.

“For 2023, we expect a drop of around 8% to 10% compared with 2022,” says the Forum.

This is not stopping European countries from filling their storage facilities in anticipation of winter: according to aggregated data from Gas Infrastructure Europe (GIE), an association of European gas infrastructure operators, European storage facilities were on average almost 90% full on Thursday. But they will only cover a fraction of consumption. France, for example, has 130 TWh of underground natural gas storage capacity, or less than a third of its annual gas consumption of around 450 TWh, according to the French Energy Regulatory Commission.

The European Union’s gas system shows reinforced resilience for winter 2025-2026, even without Russian imports, according to the latest forecast by European gas transmission network operators.
US LNG producer Venture Global saw its market value drop sharply after an arbitral ruling in favour of BP reignited concerns over ongoing contractual disputes tied to the Calcasieu Pass project.
Pembina Pipeline Corporation has completed a $225mn subordinated note offering to fund the redemption of its Series 9 preferred shares, marking a new step in its capital management strategy.
A jihadist attack targeted Palma, a strategic area in northern Mozambique, marking a return of insecurity near TotalEnergies' suspended gas project since 2021.
Fermi America has signed an agreement with Energy Transfer to secure a firm natural gas supply for powering Phase One of its HyperGrid energy campus, dedicated to artificial intelligence, near Amarillo, Texas.
Rockpoint Gas Storage priced its initial public offering at C$22 per share, raising C$704mn ($515mn) through the sale of 32 million shares, with an over-allotment option expanding the transaction to 36.8 million shares.
Tailwater Capital secures $600mn in debt and $500mn in equity to recapitalise Producers Midstream II and support infrastructure development in the southern United States.
An economic study reveals that Germany’s gas storage levels could prevent up to €25 billion in economic losses during a winter supply shock.
New Fortress Energy has initiated the initial ignition of its 624 MW CELBA 2 power plant in Brazil, starting the commissioning phase ahead of commercial operations expected later this year.
Talen Energy launches $1.2bn debt financing and expands credit facilities to support strategic acquisitions of two combined-cycle natural gas power plants.
The Ukrainian government is preparing to raise natural gas imports by 30% to offset damage to its energy infrastructure and ensure supply continuity during the winter season.
Driven by rising electricity demand and grid flexibility needs, natural gas power generation is expected to grow at an annual rate of 4.8% through 2030.
Talen Energy secures $1.2bn term financing and increases two credit facilities to support the acquisition of two natural gas power plants with a combined capacity of 2,881 MW.
Tenaz Energy finalised the purchase of stakes in the GEMS project between Dutch and German waters, aiming to boost production to 7,000 boe/d by 2026.
Sembcorp Salalah Power & Water Company has obtained a new 10-year Power and Water Purchase Agreement from Nama Power and Water Procurement Company, ensuring operational continuity until 2037.
Eni North Africa restarts drilling operations on well C1-16/4 off the Libyan coast, suspended since 2020, aiming to complete exploration near the Bahr Es Salam gas field.
GOIL is investing $50mn to expand its LPG storage capacity in response to sustained demand growth and to improve national supply security.
QatarEnergy continues its international expansion by acquiring 27% of the offshore North Cleopatra block from Shell, amid Egypt’s strategic push to revive gas exploration in the Eastern Mediterranean.
Polish authorities have 40 days to decide on the extradition of a Ukrainian accused of participating in the 2022 sabotage of the Nord Stream pipelines in the Baltic Sea.
The Japanese company has completed the first phase of a tender for five annual cargoes of liquefied natural gas over seven years starting in April 2027, amid a gradual contractual renewal process.

All the latest energy news, all the time

Annual subscription

8.25$/month*

*billed annually at 99$/year for the first year then 149,00$/year ​

Unlimited access - Archives included - Pro invoice

Monthly subscription

Unlimited access • Archives included

5.2$/month*
then 14.90$ per month thereafter

*Prices shown are exclusive of VAT, which may vary according to your location or professional status.

Since 2021: 30,000 articles - +150 analyses/week.