Around $7 trillion in global investments in natural gas supply are necessary to ensure enough gas and avoid supply crunches through 2050, according to the Institute of Energy Economics, Japan (IEEJ).
Source: Oil Price
As countries look to cut emissions and shift to gas from coal, these investments will have to go to development of new gas fields, construction of new LNG export facilities, and expansion of existing plants, according to an IEEJ report cited by Bloomberg.
However, in a scenario in which emissions stay at current levels by 2050, the world will need almost $10 trillion to avoid natural gas shortages, the Japanese think tank said.
Earlier this month, the International Energy Agency (IEA) said that the pace at which natural gas demand is set to grow over the coming years is expected to slow.
“After their heyday between 2011 and 2021, the world’s gas markets have entered a new and more uncertain period that is likely to be characterised by slower growth and higher volatility – and could lead to a peak in global demand by the end of this decade,” IEA Director of Energy Markets and Security Keisuke Sadamori said.
Many contrasting outlooks on natural gas demand in the coming years make operators hesitant to invest in new supply, the International Gas Union (IGU) of operators comprising 90% of the global gas market said in a report earlier this week.
“The unprecedented demand uncertainty and insufficient level of investment in natural gas, low-carbon, and renewable gases are putting the energy transition at risk, undermining energy affordability, security, and sustainability,” IGU said in the Global Gas Report 2023 prepared in cooperation with Italian gas grid operator Snam and research firm Rystad Energy.
“It is important to continue investing in gas infrastructure to secure reliable and affordable natural gas supply and accelerate the development of green, low-carbon gas and CCS, considering the key role that molecules will play in the energy mix of the near and longer future,” said Snam’s CEO Stefano Venier.
By Charles Kennedy for OIlprice.com
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