Yemisi Izuora
The International Energy Agency (IEA), has said that the war in Iran and the subsequent loss of LNG supply from the Middle East are altering the medium-term outlook of global natural gas balances, with tighter markets set to last longer than previously expected.
The Middle East crisis has resulted, so far, in the loss of about 120 billion cubic meters (bcm) of global LNG supply through 2030, Gergely Molnar, Energy Analyst – Natural Gas, at the IEA, said.
Global LNG supplies have shrank by around 15% due to the conflict and the closed Strait of Hormuz, the official said at the Budapest LNG Summit, as carried by Reuters.
In this situation, the EU will need an additional 10 billion bcm of natural gas this summer to refill the depleted inventories, which have dropped to multi-year low levels at the end of the heating season, Molnar said.
The Qatari LNG halt and the damage to key facilities will delay the previously expected LNG supply wave by at least two years, the IEA said in its quarterly gas report at the end of April.
“The combined effect of short-term supply losses and slower capacity growth could result in a cumulative loss of around 120 billion cubic metres of LNG supply between 2026 and 2030,” the agency noted.
“While new liquefaction projects in other regions are expected to offset these losses over time, the impact will prolong tight markets through 2026 and 2027.”
More recently, the IEA said that global methane abatement measures could unlock, in the longer term, natural gas volumes that would be double the current supply trapped by the effective closure of the Strait of Hormuz.
Tackling methane emissions and implementing readily accessible methane abatement measures across global gas systems could, in the short term, make nearly 15 billion bcm of gas very quickly available to markets.
Over the longer term, efforts to cut methane from oil and gas operations globally could deliver nearly 100 bcm of gas to markets each year, while eliminating non-emergency gas flaring could unlock a further 100 bcm, according to estimates by the international agency.