BAKU, Azerbaijan, Feb.25
By Leman Zeynalova – Trend:
Global natural gas production is forecast to expand by around 1900 bcm by 2050, Trend reports citing the Gas Exporting Countries Forum (GECF).
According to the updated results of the GECF Global Gas Market, marketed gas production is forecast to exceed 5900 bcm of the annual output by 2050, which is around 180 bcm below our previous forecast. The main reason behind this lower forecast is the impact of COVID-19, which has affected both the demand and supply side. Due to the pandemic, investors have been trying to optimise capital expenditure. As a result, some delays will be imposed on projects under construction in the upstream sector and LNG infrastructure projects.
“Although the direct impacts of COVID-19 are expected to be evident through to 2030, the delays will have a knock-on effect through to our outlook horizon. Due to delays in project construction as well as postponement in taking some FIDs, we believe that a delay of around two years will still be apparent even by the end of the forecast period. This lag makes the volume of the production in 2050 lower than our previous forecast. Global natural gas production is forecast to increase at an average annual growth rate of 1.3 percent, which translates into total growth of around 50% by 2050 compared with current levels,” reads the GECF report.
Therefore, even considering the impacts of COVID-19 and other barriers such as the lower price of fossil fuels and an oversupplied market which is expected to last in the medium-term, the long-term outlook for natural gas production is very promising especially when compared to other fossil fuels.
“This positive forecast is underpinned by the varied benefits that natural gas can bring to the energy industry, and from a broader perspective, to the future of humanity. The advantages of natural gas (reliability, affordability, resource abundancy and its potential to be stored and used in varied sectors, as well as its relatively low emissions compared to other fossil fuels), are still the main reasons that demand will increase in niche and established energy markets through switching to natural gas. In addition, advancements in the upstream sector such as technological enhancement in unconventional production and other technological progress in the natural gas supply chain will stimulate the expansion of natural gas to a significant extent over the forecast period.”
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