BAKU, Azerbaijan, Sept.4
By Leman Zeynalova – Trend:
Long-term prospects for gas investment are promising, Trend reports citing the Gas Exporting Countries Forum (GECF), Trend reports citing GECF.
“The investment opportunities in the gas industry are shaped by upstream activities and trade infrastructure including liquefaction, pipeline, and regasification as midstream. Prior to 2020, the historical upstream investment between 2010 and 2019 was nearly US$800 billion worldwide, indicating a tremendous accumulative increase of 78 percent compared to the investment volume during the 2000s. A further US$310 billion investment was made on gas transportation and trade infrastructure between 2010 and 2019, showing an increase of 67 percent compared to the investment made between 2000 and 2009.
“Although global investment on the gas markets have slowed down however, according to the GECF forecasts the long-term prospects for gas investment are promising, with some uncertainties:
“Traditionally, growth in demand has been a major factor influencing gas investment both in upstream and trade infrastructure. Nonetheless, in the last few years, the LNG industry has witnessed changes in its project financing structures due to dynamic factors such as ample unconventional sources, and emerging technologies in exploration, and exploitation phases such as floating liquefied natural gas (LNG) terminals to name a few. Advanced technologies increase production efficiency through facilitating economies of scales. This causes capex reduction which provides monetary incentives for investing companies to sanction new projects
“However, in the future a project’s financing for the LNG markets can be structured differently than it was prior to the aforementioned factors. The future financing structures of LNG projects require more innovation and flexibility, as the market could become increasingly fragmented
“Furthermore, there is an expected growth in LNG consumption in the coming decades because of population growth, growing economic prosperity in developing countries such as China and India, favourable government regulations, and actions to reduce air pollution,” said GECF.
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