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Industrial gas demand in Europe set to drop year-on-year

Oil&Gas Materials 13 December 2022 15:25 (UTC +04:00)
Industrial gas demand in Europe set to drop year-on-year
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, December 13. Industrial gas demand in Europe is set to be around 20 percent (or 25 bcm) lower in 2022 than in 2021, Trend reports with reference to the International Energy Agency (IEA).

“We estimate that fuel switching, mainly gas-to-oil, accounts for just under half of this reduction and there are also set to be some efficiency gains. Around 10 bcm of the remaining reduction stems from production curtailments, primarily in the gas- and energy-intensive industries. The fertiliser industry accounts for more than half of these production curtailments. According to the International Fertiliser Association, around 70 percent of the EU’s ammonia production capacity was offline in August 2022 and around 40% had still not restarted in October 2022,” reads the IEA report.

The report reveals that there have also been production curtailments in the steel and aluminium sectors, where high gas and electricity prices led to a 10 percent drop in production in the ten first months of 2022 compared with the same period in 2021.

“There was also less natural gas consumed in cement, glass, ceramics, food and machinery production, although most of this was because of efficiency improvements and fuel switching. The actions presented in this report aim to provide sufficient natural gas to avoid the need for curtailments in industry in 2023.

Our starting point for considering gas demand in the European Union in 2023 is consumption in 2022 (360 bcm). This is adjusted for weather, the drop in gas use in industry caused by demand destruction, and the need for additional gas exports to Ukraine and Moldova. This provides the baseline level of demand for the estimate of the supply-demand gap in 2023. We assume that Europe’s gas storages will be around one-third full at the beginning of April 2023, which translates into storage injection needs of 65 bcm over the summer in 2023 to reach a storage level of 95% at the start of the 2023- 24 heating season,” reads the report.

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