IEA long term forecast relatively to gas demand presents very positive development perspectives, with the share of gas in the world primary energy demand increasing even in “green” scenarios (24% in 2040 in the IEA New Policies scenario, 22% in the IEA 450 scenario versus 21% today).
These perspectives are the consequences of the advantages of natural gas. In particular it features less CO2 emissions and less NOx compared to other fossil fuels, it is abundant and competitive. Natural gas appears indeed as a privileged partner of renewables to lead energy markets towards a less carbonated world.
IEA forecasts that 11 TUSD will have to be invested to fulfill the needs on the gas value chain, 80% of them being dedicated to upstream and LNG. However, before carrying out all these projects (characterized in particular by a long time to market), many challenges will be faced, especially in a low oil price environment.
Two major conditions will have to be fulfilled:
As a conclusion, if those two conditions are met – reduction of upstream costs and proper valuation of natural gas positive contribution relatively to climate change-gas will be able to fully play its role as a major contributor to a less carbonated world.
What other factors need to be considered when investing in E&P and LNG? Let us know your views.
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