Natural Gas Market is expected to reach USD 6.5 trillion by 2034, growing at a 5.0% CAGR | Exactitude Consultancy
Natural Gas Market Outlook 2025–2034
Luton, Bedfordshire, United Kingdom, June 06, 2025 (GLOBE NEWSWIRE) -- The global natural gas market is on a strong upward trajectory, poised to grow from an estimated value of $4.1 trillion in 2024 to nearly $6.5 trillion by 2034, representing a robust compound annual growth rate (CAGR) of approximately 5.0% over the forecast period. This growth is primarily driven by a global shift toward cleaner energy sources, rapid industrialization, and significant technological advancements in extraction, processing, and transportation methods. As nations aim to reduce their carbon footprint, natural gas is increasingly seen as a vital transitional fuel bridging the gap between fossil fuels and renewable energy.
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Market Segmentation
By Resource Type
- Conventional Natural Gas
- Unconventional Natural Gas (Shale Gas, Tight Gas, Coalbed Methane)
- Liquefied Natural Gas (LNG)
By End-Use Application
- Power Generation
- Industrial Use
- Residential
- Commercial
- Transportation
By Distribution Method
- Pipelines
- LNG Carriers
- Compressed Natural Gas (CNG)
By Region
- North America
- Europe
- Asia-Pacific
- Middle East
- Latin America
- Africa
Market Segmentation and Key Product Insights
The natural gas market is segmented by resource type, end-use application, and distribution method.
By Resource Type
Conventional natural gas—extracted from traditional underground reservoirs—currently accounts for around 45% of global supply. While this segment remains a cornerstone of the industry, its growth is comparatively modest in mature markets with existing infrastructure.
In contrast, unconventional natural gas, including shale gas, tight gas, and coalbed methane, is experiencing rapid expansion. Technological breakthroughs in hydraulic fracturing and horizontal drilling have unlocked vast new reserves, particularly in North America. These methods now contribute about 55% of newly tapped resources, making this the most dynamic segment.
Liquefied Natural Gas (LNG) is another high-growth area, representing around 30% of international natural gas trade. The flexibility of LNG for storage and long-distance transport makes it essential for countries with limited pipeline infrastructure. Demand for LNG is particularly surging in Asia and Europe, driving extensive infrastructure development.
End-Use Applications: Growing Demand Across Sectors
Natural gas consumption is spread across five main application areas—power generation, industrial use, residential, commercial, and transportation.
Power generation remains the largest end-use segment, consuming around 40% of global natural gas output. Many countries have transitioned from coal to natural gas due to its cleaner combustion profile, reinforcing its role in sustainable energy strategies.
Industrial use, accounting for roughly 30% of demand, includes sectors like chemicals, manufacturing, and fertilizers. This segment enjoys consistent demand, especially in developing economies where industrialization is on the rise.
Residential consumption, which comprises about 20%, is largely driven by household heating and cooking needs. This segment sees seasonal fluctuations but maintains a steady base load driven by population growth and urbanization.
The commercial sector accounts for around 10% of usage, with natural gas playing an increasing role in space heating, hot water systems, and commercial kitchens.
Although transportation currently represents less than 5% of total consumption, it is emerging as a high-potential segment. Compressed Natural Gas (CNG) and LNG-fueled vehicles, particularly in the commercial transport and heavy-duty vehicle categories, are gaining traction due to cost efficiency and reduced emissions.
Distribution Methods and Infrastructure Development
In terms of delivery, pipelines are the dominant distribution method, handling more than 70% of the global natural gas supply. Extensive existing infrastructure makes pipelines the most cost-effective and reliable transport mode for regional delivery.
LNG carriers account for approximately 25% of distribution. Their ability to ship gas over long distances without relying on pipelines has made them crucial for global trade, particularly between continents.
Compressed Natural Gas (CNG), used primarily for short-distance transport and urban vehicle fueling, contributes around 5% to total distribution. While still a minor segment, its growth potential is notable in countries investing in CNG refueling infrastructure.
Regional Market Insights
North America
North America is the largest regional market, contributing roughly 36% of global revenue in 2024. The region’s dominance is due to advanced extraction technologies, especially in the U.S., which boasts prolific shale gas formations like the Permian Basin and Marcellus Shale. Strong domestic demand, well-established infrastructure, and a favorable regulatory environment continue to attract substantial investment.
Europe
Europe holds about 24% of the market and is expected to grow at a 3.5% CAGR through 2034. The region’s strong focus on decarbonization and energy diversification drives demand for natural gas, especially as a replacement for coal and a complement to intermittent renewables. Investment in LNG terminals and cross-border pipelines enhances Europe’s resilience and energy security.
Asia-Pacific
With a market share of 28% in 2024, the Asia-Pacific region is one of the fastest-growing, forecasted to expand at a 4.2% CAGR by 2034. Key growth drivers include rapid urbanization, expanding industrial sectors, and energy policy shifts in countries such as China, India, and South Korea. Extensive investments in LNG import terminals and intra-regional pipelines are supporting access to cleaner energy sources.
Latin America and Africa
Both Latin America and Africa are emerging markets with high growth potential. Africa is benefitting from natural gas discoveries in Mozambique and Tanzania, alongside efforts to build LNG export infrastructure. Latin America is seeing development in Argentina’s Vaca Muerta shale and Brazil’s gas sector, supported by energy reforms. However, political instability, regulatory issues, and infrastructure gaps remain key challenges.
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Market Drivers: What’s Fueling Growth
Several factors are propelling the global natural gas market forward. The most prominent is the global energy transition, where natural gas is viewed as a bridge fuel due to its lower carbon footprint compared to coal and oil. As climate goals become more aggressive, natural gas plays a key role in ensuring energy reliability while reducing emissions.
Technological advancements—particularly in digitalization, automation, and drilling—are significantly improving the efficiency and cost-effectiveness of gas extraction and processing. These innovations are reshaping upstream operations and enhancing competitiveness.
Governments around the world are also implementing supportive regulations to encourage the adoption of natural gas. In many regions, favorable policies for LNG infrastructure, power generation, and industrial consumption are creating a conducive environment for growth.
Market Challenges and Restraints
Despite its promising outlook, the market faces several headwinds. Chief among them is the price volatility caused by geopolitical conflicts, demand shifts, and weather-related disruptions. Such fluctuations can deter long-term investments and impact profit margins.
Another significant challenge is the environmental scrutiny around methane leaks—a potent greenhouse gas. Regulatory bodies are tightening emission standards, necessitating expensive monitoring and leak prevention technologies.
The rise of renewable energy also presents competitive pressure. As the cost of solar and wind power declines, their adoption could eat into natural gas’s market share, particularly in power generation.
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Emerging Trends and Growth Opportunities
The natural gas industry is undergoing notable transformation, marked by integration with renewable technologies, digitalization, and new business models. Hybrid energy systems combining natural gas with solar, wind, or hydrogen are gaining attention, offering more flexible and sustainable energy solutions.
The growth of the transportation segment, especially CNG and LNG vehicles, represents an underexplored opportunity. Public and private investment in refueling infrastructure is expected to catalyze adoption.
The expansion of LNG infrastructure—especially in Asia-Pacific—is also opening doors for increased trade and market access. LNG offers market flexibility and enables countries to diversify their energy sources, thereby reducing reliance on politically unstable suppliers.
Key Competitors
- ExxonMobil
- Chevron
- Royal Dutch Shell
- TotalEnergies
- BP
- Gazprom
- Qatar Petroleum
- ONGC (Oil and Natural Gas Corporation)
- Reliance Industries Limited
- Eni S.p.A.
- ConocoPhillips
- Equinor
- Petronas
- Sempra Energy
- Cheniere Energy
Notable Recent Developments
- Reliance Industries (Aug 2023) announced a large-scale expansion of its natural gas business in India. The company is investing in pipeline networks and production facilities to help the government meet its target of increasing the natural gas share in the energy mix to 15% by 2030.
- BP (Sep 2023) entered a partnership with a renewable energy firm to develop hybrid energy projects combining natural gas and hydrogen, reflecting the trend toward integrated, low-emission solutions.
- ONGC (Oct 2023) adopted artificial intelligence and machine learning technologies to optimize its exploration and production processes, aiming to boost efficiency and reduce emissions.
- Cheniere Energy (Jul 2023) acquired a mid-sized LNG transport company to enhance its export capabilities and respond to rising LNG demand in Europe and Asia.
- TotalEnergies (Nov 2023) received regulatory clearance for expanding offshore gas fields, reinforcing its production capabilities and signaling continued support for natural gas projects in global energy strategies.
This report is also available in the following languages : Japanese (天然ガス市場), Korean (천연가스 시장), Chinese (天然气市场), French (Marché du gaz naturel), German (Erdgasmarkt), and Italian (Mercato del gas naturale), etc.
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