Gas demand will surge
The annual Gas Exporting Countries Forum has adopted a long-term strategy in view of the ever-growing global demand for energy.
STAFF REPORTER
The 19th ministerial meeting of the Gas Exporting Countries Forum (GECF) convened in Moscow in Russia earlier this month, led by the forum chairman, Alexander Novak, the Russian energy minister, and Gabriele Mbaga Obiang, mines minister of Equatorial Guinea as the alternate.
The meeting was attended by Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, United Arab Emirates and Venezuela as well as the Netherlands, Norway and Oman as observers.
In his opening remarks, Novak said the meeting was critical because of the working plan to be put into effect by the forum for its long-term strategy.
The ministers reviewed the short-term gas market report as well as long-term gas outlook and discussed developments, opportunities and challenges of the market now and in the future.
Abundant resources
According to the GECF Global Gas Outlook 2040, gas resources in GECF countries are abundant. “So much so, that the GECF member countries expect to be willing and able to contribute, with new exports, significant volumes to the growing international trade in gas,” the outlook said.
Markets for gas in GECF countries will grow substantially in the next two to three decades and by 2040, the global demand for gas will increase by roughly 50%, to 5 200 billion cubic metres.
Gas set to displace coal
According to the outlook, Iran is likely to see the strongest growth in GECF countries, followed by Russia, Egypt, Iraq and Nigeria. “Gas demand will play a key role in helping to meet future energy requirements. The global economy is expected to double over the next quarter of a century and energy demand to increase by almost 30% over the same time. The gas market share will increase from just over 21% to 25% over the outlook period, as it gains market share in power generation. As the world economy continues to electrify - global electricity demand increases by 70% between 2015 and 2040 - the generation requirement correspondingly increases and gas offers a least cost source of power in many countries.”
However, while this growth is positive, challenges will emerge. In the longer term, the decarbonisation of the power sector could undermine the position of gas in the absence of offsetting carbon capture and storage technologies. In the short-to-medium term, however, gas can displace coal as the global source of incremental power supply.
Analyses indicate that the gas trade will increase by 66% over the next 25 years, and even more of this trade will be carried by sea, in the form of liquefied natural gas (LNG). LNG trade will more than double.
The volume of gas traded through international pipelines will also grow significantly.
The share of GECF members in global trade is forecast to be 47% in 2040 compared with 43% in 2015, and very close to the average share of 46% for GECF member countries over the last 20 years.
There are sufficient gas resources in GECF countries for our members to be in a position to meet future expected calls from international buyers, while at the same time continuing to support the long-term growth in the role of gas in the members' domestic energy economies.
In 1990, gas represented 37% of GECF members' domestic primary energy; it is expected to reach a share of 51% by 2040. This increase will allow a reduction in coal and oil use, and a corresponding reduction in carbon dioxide emissions, in line with the forum's various INDC commitments under the 2015 Paris Agreement.
Upstream investment
Investment in the upstream will continue to require the lion's share of capital available for the gas business. The investment research indicates an expected global need for US$8 trillion over the period to 2040, of which 85% will be needed in the upstream. This level of investment spending is equivalent to over 10% of today's global GDP (gross domestic product).
The ministers reiterated the importance of cooperation amongst member states to stabilise the gas market and increase the gas market share in the energy mix. They also acknowledged the importance of the Paris Agreement and reiterated their resolve to pursue the promotion of natural gas and its pivotal role in responding to the Paris, but also as an affordable, accessible, reliable and clean source of energy.
The ministers appointed Franklin Khan energy minister of Trinidad and Tobago, as president of the Ministerial Meeting for 2018 and Tarek El Molla, Egyptian petroleum minister as the alternate for the year.
The next GECF meeting will be held on 14 November 2018.
*About GECF: The Gas Exporting Countries Forum (GECF) is an intergovernmental organisation of 24 member states. These members together control over 70% of the world's natural gas reserves, 38% of the pipeline trade and 85% of the liquefied natural gas production. The three largest reserve-holders in the GECF – Russia, Iran and Qatar – together hold about 57% of global gas reserves.
The 19th ministerial meeting of the Gas Exporting Countries Forum (GECF) convened in Moscow in Russia earlier this month, led by the forum chairman, Alexander Novak, the Russian energy minister, and Gabriele Mbaga Obiang, mines minister of Equatorial Guinea as the alternate.
The meeting was attended by Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, United Arab Emirates and Venezuela as well as the Netherlands, Norway and Oman as observers.
In his opening remarks, Novak said the meeting was critical because of the working plan to be put into effect by the forum for its long-term strategy.
The ministers reviewed the short-term gas market report as well as long-term gas outlook and discussed developments, opportunities and challenges of the market now and in the future.
Abundant resources
According to the GECF Global Gas Outlook 2040, gas resources in GECF countries are abundant. “So much so, that the GECF member countries expect to be willing and able to contribute, with new exports, significant volumes to the growing international trade in gas,” the outlook said.
Markets for gas in GECF countries will grow substantially in the next two to three decades and by 2040, the global demand for gas will increase by roughly 50%, to 5 200 billion cubic metres.
Gas set to displace coal
According to the outlook, Iran is likely to see the strongest growth in GECF countries, followed by Russia, Egypt, Iraq and Nigeria. “Gas demand will play a key role in helping to meet future energy requirements. The global economy is expected to double over the next quarter of a century and energy demand to increase by almost 30% over the same time. The gas market share will increase from just over 21% to 25% over the outlook period, as it gains market share in power generation. As the world economy continues to electrify - global electricity demand increases by 70% between 2015 and 2040 - the generation requirement correspondingly increases and gas offers a least cost source of power in many countries.”
However, while this growth is positive, challenges will emerge. In the longer term, the decarbonisation of the power sector could undermine the position of gas in the absence of offsetting carbon capture and storage technologies. In the short-to-medium term, however, gas can displace coal as the global source of incremental power supply.
Analyses indicate that the gas trade will increase by 66% over the next 25 years, and even more of this trade will be carried by sea, in the form of liquefied natural gas (LNG). LNG trade will more than double.
The volume of gas traded through international pipelines will also grow significantly.
The share of GECF members in global trade is forecast to be 47% in 2040 compared with 43% in 2015, and very close to the average share of 46% for GECF member countries over the last 20 years.
There are sufficient gas resources in GECF countries for our members to be in a position to meet future expected calls from international buyers, while at the same time continuing to support the long-term growth in the role of gas in the members' domestic energy economies.
In 1990, gas represented 37% of GECF members' domestic primary energy; it is expected to reach a share of 51% by 2040. This increase will allow a reduction in coal and oil use, and a corresponding reduction in carbon dioxide emissions, in line with the forum's various INDC commitments under the 2015 Paris Agreement.
Upstream investment
Investment in the upstream will continue to require the lion's share of capital available for the gas business. The investment research indicates an expected global need for US$8 trillion over the period to 2040, of which 85% will be needed in the upstream. This level of investment spending is equivalent to over 10% of today's global GDP (gross domestic product).
The ministers reiterated the importance of cooperation amongst member states to stabilise the gas market and increase the gas market share in the energy mix. They also acknowledged the importance of the Paris Agreement and reiterated their resolve to pursue the promotion of natural gas and its pivotal role in responding to the Paris, but also as an affordable, accessible, reliable and clean source of energy.
The ministers appointed Franklin Khan energy minister of Trinidad and Tobago, as president of the Ministerial Meeting for 2018 and Tarek El Molla, Egyptian petroleum minister as the alternate for the year.
The next GECF meeting will be held on 14 November 2018.
*About GECF: The Gas Exporting Countries Forum (GECF) is an intergovernmental organisation of 24 member states. These members together control over 70% of the world's natural gas reserves, 38% of the pipeline trade and 85% of the liquefied natural gas production. The three largest reserve-holders in the GECF – Russia, Iran and Qatar – together hold about 57% of global gas reserves.
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