Opening the session, David Holtam, Deloitte/WPC Energy UK National Committee, said: ‘Since the beginning of the Russian war in Ukraine, energy security has become a higher priority for governments. Uncertain project economics have also beset offshore wind projects, particularly in the US, while the adoption of electric vehicles and heat pumps has been slower than anticipated.’

The inauguration of newly elected President Donald Trump in January 2025 and the likely implications for the Paris Accord and the oil and gas industry could also provide additional complications for global adherence to the net zero roadmap.

In the meantime, gas in Europe is likely to continue to play a key role as a gateway fuel to renewables. This is due to a new mood of optimism as the worst concerns of 2022 about the loss to Europe of Russian pipeline gas turned out to have been overplayed.

‘Since the beginning of the Russian war in Ukraine, energy security has become a higher priority for governments. Uncertain project economics have also beset offshore wind projects, particularly in the US, while the adoption of electric vehicles and heat pumps has been slower than anticipated.’ – David Holtam, Deloitte/WPC Energy UK National Committee

Bill Farren-Price, Senior Research Fellow, Head of Gas Programme at the Oxford Institute for Energy Studies (OIES), pointed to the ‘extraordinary resilience’ of the gas markets since Russia’s invasion of Ukraine. In 2019, the European Union (EU) imported 179bn m³ of Russian pipeline gas. But by 2023, this had fallen to less than 26bn m³. The EU has also been able to replace the loss of Russian gas, despite a decline in EU domestic production. This has been through a large increase in LNG imports.

‘There was a massive effort within the EU, particularly on the part of Germany, to ramp up its re-gasification infrastructure,’ he said. Between January 2021 and July 2022, regasification capacity remained static at 210bn m³/y. But thereafter there was a large increase in capacity, starting in September 2022. In that month, the EU increased its capacity to nearly 220bn m³/y. By March 2024, capacity had risen to 265bn m³/y.

Infrastructure expansions were noted at the Wilhelmshaven floating storage regasification unit (FSRU) in Germany, El Musel (Spain), Zeebrugge Onshore Expansion (Belgium), Lemshaven FSRU (Nethetherlands), Lubmin FSRU (Germany), Le Havre FSRU (France), Inkoo FSRU (Finland), Brunsbuttel FSRU (Germany) and Piambino FSRU (Italy).

How important has US LNG been to Europe?
Without the key role played by the US the switch from Russian pipeline gas to LNG would not have been possible. In 2017, US imports into Europe were a miniscule 3bn m³/y, rising to 4bn m³/y the following year. By 2019, US LNG imports into Europe had risen to 19bn m³/y climbing to 25bn m³/y in 2020. The year before Russia’s 2022 invasion of Ukraine, US imports into Europe had risen to 33bn m³/y. Then they more than doubled in 2022 to 71bn m³/y before levelling off at 77bn m³/y in 2023. It was though an element of luck that largely enabled Europe to avoid a full-blown energy crisis in the wake of Russia’s invasion.

‘Chinese gas demand was low in 2022. In addition, there was excess capacity in the UK’s regasification capacity. This, combined with warmer weather and the recent major investment cycle, enabled the EU to stave off the worst of the crisis,’ said Farren-Price.

Meanwhile, if Europe is to make the move away from gas towards renewables, substantial amounts of investment, far and above what has so far been made available, will be required. This in turn will require more than a mere shift in political attitudes. Farren-Price pointed out the International Energy Agency (IEA) has so far been confounded in its forecasts for net zero electricity, which were in no inconsiderable part predicated on announced political targets.

’Despite political support, the targets are not being supported by the reality we see in the market,’ Farren-Price stated. Carbon capture and storage (CCS) is a case in point. ‘There appear to be significant obstacles standing in the way of projects moving beyond the pilot stage to scaling up to commercial plants,’ he added.

He also questioned whether ‘multilateralism’ had run its course. ‘We’ve had one disappointment after another in the quest to tackle GHG [greenhouse gas] emissions at the multilateral level. COP28 was essentially a failure. It effectively said: “Since we can’t reach agreement, each nation should be free to proceed at its own pace”.’

How is Saudi Arabia transitioning from oil and gas? 
One nation taking steps to move its oil and gas industry into the downstream space in line with its ‘2030 Vision’ is Saudi Arabia, according to Mohammad Al Tayyar, Programme Director of the Oil Sustainability Programme (OSP), Ministry of Energy, Kingdom of Saudi Arabia. The OSP, launched in 2020, is designed to sustain and grow the demand for petroleum-derived hydrocarbon materials as a competitive energy source.

Describing the Kingdom’s journey, Al Tayyar said: ‘Saudi Arabia has always been synonymous with oil. But we are shifting from being an oil-producing country to an energy-producing country. That includes efforts on growing our renewable energy, gas, nuclear and everything in between.’ A number of projects are underway under the aegis of Saudi Arabia’s National Renewable Energy Programme (NREP) and Renewable Energy Project Development Office (REPDO).

NREP initiatives include the 300 MW Sakaka solar photovoltaic (PV) project, an independent power producer (IPP) that went online in 2020. It is the first utility-scale solar power project in the Kingdom.

Another renewable energy project that has been developed as part of NREP is the 400 MW Dumat Al-Jandal wind farm. This is the first utility-scale wind power project in Saudi Arabia, and one of the biggest wind farms in the Middle East. Full-scale operations started in 2022.

NREP also developed the 1.5 GW Sudair solar power project, a 1.5 GW solar PV farm in the Riyadh province of Saudi Arabia. In January 2024, ACWA Power announced that the project had become fully operational. The solar power plant is currently the biggest in the Kingdom. ACWA Power is tendering almost 44 GW of renewable projects by the end of 2024.

But as Al Tayyar pointed out, Saudi Arabia’s renewable energy transition goes back to the 1970s, when Saudi Aramco installed its Master Gas System (MSG). This system, which is being expanded, has enabled Aramco over the years to derive value from its range of gas deposits. ‘The concept was to remove flaring and create value from that gas. This enabled us as a country to consider how we could create a more meaningful product slate rather than just flaring this gas,’ he said.

The country is also moving away from a linear carbon economy to a circular economy, according to a framework that was introduced back in 2020. This framework targets: reduce, reuse, recycling and the removal of carbon. ‘This forces us to look at how we can better utilise carbon across these four Rs,’ he added.

A further interesting initiative in the Kingdom is underway to establish the provision of sustainable polymer materials to replace traditional construction materials such as glass, steel and concrete.

‘In 2012, we undertook the task of enhancing energy efficiency in our buildings. The creation of the Saudi Energy Efficiency Center (SEEC) became a central plank. In 2020, we launched a renewable transformation programme. The idea was to create a transparent rendering system to encourage companies to invest and become part of our journey into renewables,’ Al Tayyar continued.

According to the SEEC, the building sector consumes about 29% of the primary energy consumed in the Kingdom. In cooperation with the relevant stakeholders, the SEEC seeks to improve and raise the efficiency of energy consumption in this sector, which covers all governmental, commercial and residential buildings as well as the electrical and electronic systems and devices used.

A landmark project is located in the ancient city and UNESCO World Heritage Site of Diriyah. In 2022, OSP inked a memorandum of understandng with the Diriyah Gate Development Authority (DGDA). It provides both the sustainable polymer construction materials in DGDA’s projects and the required technical and logistics support. The Kingdom is hoping to become a world leader in the provision of this technology.

• Further reading: ‘Fuelling change: the surge of US LNG’. As the start of the 21st century witnessed growing dialogues around climate change and recognition of the need for renewable energy sources, a contrary trend has emerged from the heart of the US: an upsurge in LNG production. This phenomenon not only marks a significant pivot in the US energy narrative, but also casts a long shadow on the global dialogue concerning environmental sustainability and the transition towards greener energy paradigms.
• The Middle East and North Africa (MENA) region lags significantly in terms of renewable energy developments. But a raft of clean power initiatives are underway as COP28 beckons, hosted by the United Arab Emirates (UAE), writes New Energy World Features Editor Brian Davis.