BAKU, Azerbaijan, Jan.14
By Leman Zeynalova – Trend:
Decarbonising natural gas will become a strategic priority for the gas industry, Trend reports citing Wood Mackenzie.
The company believes that 2021 will be a defining year for the gas and LNG industry.
Policy makers will need to provide clarity on decarbonisation plans, including how they see the role of natural gas, following pledges to achieve climate neutrality, says Wood Mackenzie vice president Massimo Di Odoardo.
Gas players will have to show commitments to decarbonise natural gas, including through carbon capture, utilisation and storage (CCUS) and blue hydrogen, he added.
Wood Mackenzie notes that almost 50 percent of today’s global carbon emissions and 75 percent of today’s LNG demand are covered by countries with carbon neutral goals.
“The resilience of gas in the energy mix will depend upon the pathways policy makers adopt to achieve net-zero targets. The acceleration in coal-to-gas switching is a key theme to watch in Asia as coal accounts for over 50 percent of the region’s energy mix. In Europe, additional coal plant retirals in Germany and Poland could support more gas utilisation in the medium term, similar to what is happening in other European countries. Additionally, firm policies in support of CCUS as well as blue hydrogen, would support gas demand in hard to decarbonise sectors.”
Rystad Energy forecasts that global natural gas production is expected to grow by 24 percent to 4,857 Bcm in 2040, with most additions coming from North America (+410 Bcm versus 2020 production), followed by Russia (+190 Bcm) and the Middle East (+185 Bcm).
“US natural gas production could reach 1,194 Bcm in 2040, driven by output from Marcellus and the Permian. Shale production is however at risk due to the new government. Russia, Iran and Qatar can contribute with substantial output. Europe will be the only region to decline (-74 Bcm) due to lower production from Norway and the Netherlands,” the company said in its latest report.
Rystad Energy believes that global natural gas demand is set to increase through 2040 by 26 percent to a monstrous 4,867 Bcm, with Asian demand being by far the largest addition (+537 Bcm versus 2020), as gas is needed to power the region despite growth in renewables.
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