31 January 2023 - 09:56
  • News ID: 468203
GECF to Supply 74% of Global Gas by 2050

TEHRAN (Shana) -- The Gas Exporting Countries Forum (GECF) expects 74% of the world's natural gas production by 2050 to be provided by new projects that will start in the future.

The unveiling ceremony of the seventh version of the 2050 Global Gas Outlook (GGO) was held online on Sunday.

The new version of the GECF Global Gas Outlook has been published in a situation where the world has been facing severe and deep crises in the fields of economy, energy, trade, health, environment and geopolitics in the past three years, and the world's energy system has experienced many ups and downs during this period including the corona pandemic, economic stagnation, lack of investment and geopolitical tensions.

The goal of the 2022 GECF Global Gas Outlook 2050 is to find answers to this critical energy concern of the current time.

This document examines the prospects for demographic changes and economic growth on a global and regional scale, and deals with long-term forecasts of energy supply and demand, natural gas trade and investment.

Additionally, the latest developments in energy regulation and policy and technological developments in the gas industry are covered in this annual report.

In order to clarify the central role of gas in the future of the world's energy system, GECF has designed two scenarios of "sustainability of energy" and "accelerated decarbonization of energy" in the annual report of the global gas outlook, which helps to understand the importance of natural gas for developed and developing countries in the long run.

According to GECF's independent estimates, due to the increase in the cost of upstream capital due to inflation and the jump in the internal rate of return of oil upstream investment as a result of uncertainty about the future of oil demand, oil prices are expected to remain at high levels for the next three decades, so it is assumed that the average price of Brent crude oil should be equal to $75 per barrel during the estimation period of this forecast. In addition, it is expected that the price level of natural gas, especially in the markets of Asia and Europe, will be higher and more volatile than in the past in the 2050 outlook.

22% increase in energy demand between 2021 and 2050

Energy demand is expected to grow by 22% between 2021 and 2050 and reach 17,865 million tons of oil equivalent. The increase in the need for clean energy will strengthen the share of natural gas and new energies in the world's energy mix and make it more diverse. It is estimated that the share of natural gas in the energy mix will increase from 23% in 2021 to 26% by 2050.

The results of the predictions show that the share of natural gas in the energy portfolio will exceed coal in 2025, and by 2043, natural gas will become the most important fossil fuel in the world's energy mix.

According to the estimates of the global gas model, global gas consumption will reach 5460 billion cubic meters by 2050, which shows a 36% growth compared to 2021. Policies to reduce air pollution and replace coal fuel with natural gas in power plants will be the most important drivers of increasing gas consumption in the coming decades.

In the coming years, natural gas will be used mostly in the power plant sector, and it is expected that 43% of the increase in gas demand in the 2050 outlook will be related to this economic sector, although new sources such as blue hydrogen production and the transportation sector are also emerging for natural gas demand.

It is worth noting that most of the world's gas consumption will be related to Asia-Pacific, the Middle East and Africa, and Europe will be the only region that will face a decreasing trend based on the estimates obtained.

In response to the growth in demand, natural gas production will experience an increasing trend, and the world's natural gas production is expected to grow from 4025 billion cubic meters in 2021 to 5460 billion cubic meters in 2050, which represents a 36% growth for this key future energy source. It is estimated that about one-third of the growth of natural gas production in the forecast outlook will be realized in the Middle East, and after that, Africa and North America will occupy the second and third places.

GECF expects that 74% of the world's natural gas production by 2050 will come from new projects that will be started in the future, so strengthening investment in the gas industry, especially in the upstream sector and developing the supply chain, is very important, although the importance of resource exploration should not be overlooked for supplying the growing demand for natural gas in the future. The results obtained from the global gas model show that 27% of natural gas production should be provided from gas resources that have not yet been discovered.

Along with the growth in the consumption and production of natural gas, it is expected that its business will also prosper and by 2050 it will witness a growth of 36% and cross the threshold of 1700 billion cubic meters. This volume of natural gas trade is equivalent to one third of the total gas demand.

According to available estimates, the natural gas trade through LNG will accelerate in the coming years, and in 2025 the volume of global trade through LNG will surpass that of the pipeline. The model outputs show that the volume of LNG trade will almost double between 2021 and 2050.

The most important destination for LNG exports in the long-term future will be Asia-Pacific, and the share of this region in the world's LNG trade will see a limited decrease in the forecast model from 72% to 67%, although its absolute value will increase.

The European Union is also trying to prioritize LNG in its new strategy for gas supply in this region, and in this regard, while increasing the import of natural gas through LNG, it will strengthen the liquefaction capacity and remove the bottlenecks of the existing gas infrastructure. The share of LNG in the total natural gas imports of the European Union is expected to increase from 24% in 2021 to 46% in 2030.

Based on the findings and results obtained from the global energy model, it can be acknowledged that the most prominent message of the energy outlook report in 2022 is the necessity of using all types of energy and technologies to meet the world's demand in addition to achieving the goals of improving air quality and reducing greenhouse gas emissions.

There is no universal model in this regard, and the optimal paths of energy in the future will be determined nationally and based on local conditions and countries' priorities such as geography, natural resources, population, technological and financial capabilities, and the choice of the general public.

The events of recent years have clearly shown how vital investment in natural gas is for the sustainability of the world's energy system. By 2050, the total investment needed to meet the world's gas demand is estimated at $10.5 trillion. In an industry whose annual production drop rate is estimated at 4-5%, the lack of investment means a reduction in supply and an increase in prices, which will lead to inflationary and livelihood pressures along with the growth of carbon prices. This trend can reduce the chance of citizens of developed countries to support governments that support energy transition and create a kind of resistance against them.

The wider effects of this trend in developing countries will add to its unfavorable dimensions. A new revision to energy policies and understanding the importance of investing in the natural gas industry as a fuel supporting new energies and a foundation for the inclusive and sustainable development of the world is considered a positive development for the future of mankind.

Appreciation to the Secretary General and capable staff of GECF

In this ceremony, Amirhossein Zamaninia, Iran's OPEC governor and representative in energy communities, addressed Mohamed Hamel, Secretary General of GECF, Gabriel Mbaga Obiang Lima, the Minister of Mines, Industry and Energy in the Republic of Equatorial Guinea and periodic chairman of the ministerial meeting of GECF, and said: “I would like, on behalf of Iranian Minister of Petroleum Javad Owji and the entire staff of Iran's oil and gas industries, to thank and appreciate the Secretary General and capable staff of GECF for preparing the 2050 Global Gas Outlook report.”

He added: “I am sure that for the development and publication of the 2050 Global Gas Outlook version in 2020, a lot of thought, compassionate efforts and most importantly, generous courage were needed at every stage, and it is clear why the development of this report to this extent takes thought and effort, that's why I think it takes a lot of courage for the Gas Exporting Countries Forum to publish the 2020 Global Gas Outlook, which includes future gas supply, demand, price and trade forecasts. The year 2022 was associated with a lot of uncertainty and chaos in the energy industry.”

Iran's OPEC governor stated: “The global gas outlook 2050 provides estimates of the long-term energy strategy and the key word in this report is "forecast" and this forecast can be obtained from a number of hypotheses about a number of variable factors such as macroeconomic conditions, energy prices and policies in general and the climate change plan. All of these factors are naturally changing, during 2022, they have been accompanied by unprecedented developments such as the confusion of geopolitical issues, the effects of the spread of coronavirus in the world, drastic changes in policies and the implementation of price ceiling plans. The publication of the 2050 Global Gas Outlook report in the background of all these constantly changing factors requires a lot of courage and makes this report even more remarkable.”

News ID 468203


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