LNG markets in 2023 may be tighter than this year as demand may rise in China, India and other parts of Asia, the head of the International Energy Agency (IEA) said on Thursday.

“We may well see that the LNG markets in 2023 will be rather tight, maybe tighter than this year,” said Fatih Birol in remarks at the LNG Producer-Consumer Conference in Japan.

Global gas prices have surged to record levels this year, as Russia’s gas supply cuts have placed enormous strain on the European and global market.

High wholesale gas prices in Europe has seen the bloc import record amounts of LNG cargoes, drawing in volumes from top importing region Asia.

Birol also added that Europe has received a substantial amount of LNG this year, with imports increasing “by a staggering 60%”.

“One of the reasons why Europe can draw so much LNG is that China … (saw) sluggish economic growth this year,” he said.

“If the Chinese economy recovers … it will be difficult for Europe to attract so much LNG.”

China’s imports of LNG are on track to post their first major decline this year, as high prices and weak manufacturing due to COVID-19 lockdowns crimp demand for the super-chilled fuel.

The country became the world’s top LNG buyer last year but surrendered the top spot back to Japan in the first four months of 2022.

Should Japan restart their nuclear power plants, it would free up about 10 billion cubic metres (bcm) of LNG and “help the global LNG market,” said Birol, without specifying a timeframe.

Birol had made similar remarks on Tuesday, saying that Japan’s restart of more nuclear power plants would help ease Europe’s energy supply fears during the winter as more LNG will become available to the global market.

By Reuters, October 4, 2022