Global natural gas demand will grow by 1.4%/y between 2016 and 2040 and will play a growing role in the energy mix at the expense of other fossil fuels, according to the reference scenario in Cedigaz’ latest medium and long-term natural gas outlook for 2018. The scenario incorporates national energy plans and INDC (intended nationally determined contributions) commitments.
The gradual shift from coal and oil to natural gas and renewables will help reduce the carbon intensity of the energy system as electrification and decarbonisation accelerate over the projection period, states the study. The expansion of natural gas markets is supported by both abundant and competitive conventional and unconventional resources, as well as a very rapid growth of spot and flexible LNG trade.
The report suggests the stronger push for renewables and energy efficiency will drive gas demand growth down to 1.2%/y over 2025–2040, compared to 1.8%/y over 2016–2025.
On the supply side, the largest production gains are expected in the Middle East (+411bn cm), North America (+352bn cm) and Asia-Oceania (+305bn cm).
Inter-regional (long-distance) trade is forecast to grow by 3.1%/y between 2016 and 2040, with LNG expanding more rapidly than pipeline gas. The inter-regional LNG trade is anticipated to grow by more than 4%/y.
Higher than previously expected Asian LNG demand, propelled by China, and delays in the second wave of LNG liquefaction projects bring a risk of tighter markets as early as 2022.