• Monday, April 15, 2024
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Global LNG demand set to grow 70% by 2050 – Report

$1.3bn owed to IOCs halts new gas investments

The demand for Liquefied Natural Gas (LNG) globally is expected to grow by 70 percent, reaching 700 metric tonnes per annum (MMTpa) by 2050, says a report by Wood Mackenzie.

As Europe moves away from Russian gas and Asia reduces its dependency on coal, demand and investment in liquefied natural gas will continue to rise, said the report titled “Stick or Twist: Should gas resource holders Target LNG Exports or blue ammonia?”

The acceleration of the energy transition means gas resource holders increasingly face a choice: follow the established pathway and develop new LNG export facilities or pivot into developing blue ammonia.

Giles Farrer, head of gas and LNG asset research and co-author of the report, said “Demand for LNG is expected to grow by just under 70 percent over the next 25 years to reach 700 metric tonnes per annum (mmtpa) by 2050.

But neither growth nor revenue is locked in for LNG. As the energy transition gathers pace, gas stakeholders are questioning whether longer-term demand for LNG is so assured.”

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In Wood Mackenzie’s Accelerated Energy Transition (AET-1.5) scenario, the world needs far less new LNG supply. The market will still need 160 million mmtpa of new LNG supply to be developed by 2040, but beyond this time, developers face the risk of declining prices and underutilisation as demand reduces to 500 mmtpa by 2050 under Wood Mackenzie’s AET-1.5 scenario.

Faced with these challenges, holders of undeveloped gas resources are now starting to consider alternative ways to monetise gas exports. Blue ammonia, produced from low-emission hydrogen, generated through gas reforming with carbon capture and combining it with air-sourced nitrogen, has quickly risen to the top of the pile as a credible alternative to LNG for gas monetisation, the report said.