GECF Global Gas Outlook 2050 launched in Doha
The Gas Exporting Countries Forum (GECF) Global Gas Outlook 2050 was launched today in Doha, the State of Qatar. Quantified through the use of the unique and highly granular GECF Global Gas Model, the 4th edition of the Outlook is based on proprietary assessments of the evolution of energy and gas market fundamentals through to 2050.
The GECF Global Gas Outlook is a unique worldwide energy outlook focusing solely on natural gas, which aims to be a global reference for insights into gas markets. The publication represents an impartial view on gas market evolution by highlighting the most likely developments in the medium- and long-term.
In order to have a broader mapping of the uncertainties shaping the development of gas markets multiple scenarios are needed. To this end, the Forum addresses future uncertainties and their possible impact with alternative scenarios through its annual publication of the Global Gas Outlook.
Addressing the unveiling ceremony, H.E. Mr. Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, and President and CEO of Qatar Petroleum said, “While fossil fuels will continue to dominate the global energy mix, natural gas will be the only form of hydrocarbons to increase its share during the next 30 years. Today, the share of natural gas in the global energy mix stands at about 22%. By 2050, this is expected to rise to 27%, according to the outlook, which is being launched today.”
Also addressing to the audience, composed of the Forum Member Countries’ representatives, members of the diplomatic corps, experts and academia, H.E. Dr. Yury Sentyurin, Secretary General of the GECF, highlighted the importance of natural gas and its great potential as energy source for sustainable development due to the efficiency, availability, and eco-friendly nature of the resource.
In addition to these environmentally sound features of natural gas industry ecosystem, H.E. Secretary General informed that the Forum strives to prove itself as an environmental learning and knowledge sharing hub, in particular by implementing the state-of-art practices. For instance, it comes as a positive development, that the current edition of the organization’s landmark forecast was produced at the highest environmental standards – using recycled paper and vegetable inks – for the first time in the GECF history.
To address the Global Gas Outlook key findings and advocate vital importance of natural gas in ensuring global energy security and more sustainable and resilient energy systems, the event continued with a panel discussion, where the GECF analysts elaborated on the publication’s six main chapters.
Chapters I and II introduce key global gas demand assumptions, including economic, energy price and policy assumptions, as well as environmental policy development. Chapter III highlights energy and gas demand trends, followed by supply assumptions in Chapter IV, which include global gas resources, upstream and unconventional production. Chapter V is dedicated to global gas trade and investment outcomes resulting from the equilibrium between supply and demand. It takes into consideration gas market constraints, in terms of supply infrastructure, international supply contracts and gas supply policies (e.g. the satisfaction of domestic gas demand as a priority for some countries). The final chapter features two alternative scenarios devised by the GECF Secretariat: the Carbon Mitigation Scenario and the Technology Advancement Scenario.
It was specifically stressed, that the results are quantified through the use of the Global Gas Model, which is a unique energy model developed in-house at the GECF Secretariat, and which includes different sub- models with each one focused on one segment of the gas value chain (production, pipelines, LNG, shipping, regasification, contracts and demand).
The Model endogenously calculates gas demand curves and gas production profiles country by country based on corresponding assumptions and inputs. All of the sub-models have been calibrated and based on 2018 as the last available year of historical data.
The GECF Global Gas Model is characterized by its uniquely high granularity, encompassing:
• 134 country level forecasts (113 detailed break downs, 21 simplified) with over 60 regional aggregates and a global projection;
• complete energy balance estimates, covering 33 sectors and 35 fuels annually, from 1990 to 2050;
• about 4545 gas supply entities representing gas supply potential at the global scale.
Some specific highlights from the GECF Global Gas Outlook 2050 include:
• Over the next several years, the economy will grow more slowly and we see many risks to economic growth.
• The medium-term economic outlook is impacted by the low price environment for the commodities, US-China trade tensions, Brexit complications, etc., with world trade growth slowing and impacting overall economic growth. We should not ignore some new risks when buyers declare force majeure as the coronavirus constrains commodity and energy markets.
• However, the long-term outlook is healthy according to the key economic indicators, resulting global GDP growth rate will be at 3.2% per year. Population growth and economic growth will drive energy demand.
• In compliance with UN data, the global population is set to grow by 2.2 billion to reach 9.8 billion by 2050, therefore it is expanding the urban population to be a primary energy demand driver.
• It expected that energy markets will undergo significant transformations over the next three decades, as energy accessibility will unlock almost 30% of additional energy demand.
• Natural gas continues to receive positive policy support in several countries as an alternative to polluting and carbon-intensive fuels and a flexible option complementing intermittent renewables.
• Natural gas is set to be the highest in the primary energy mix (27%)
• Fossil fuels will continue to dominate the global energy mix and will amount to 71% in 2050, against 81% in 2018. Oil will remain an important source of energy, but its share is expected to fall to 26%. Coal will drop sharply, providing only 18%.
• Natural gas will be the only hydrocarbon resource to increase its share.
• Natural gas is projected to rise by 1.3% per annum to 5966 bcm by 2050 driven by environmental concerns, air quality issues, coal-to-gas switching as well as economic and population growth.
• The power generation (1.7% per annum) and industrial (1.2% per annum) sectors will be the biggest contributors, accounting for about 66% of additional gas demand volumes to 2050.
• Gas production will rise by 1.3% per annum to 2050, with North America accounting for the largest share of this growth, followed by Eurasia, Africa and the Middle East.
• Production from unconventional resources will become increasingly important, and their share of overall output is expected to rise from 25% to 38% by 2050.
• Gas production in GECF countries will grow by almost 50% by 2050 to over 2.5 tcm, underlining the continued importance of the group.
• Growth in LNG trade is the main driving force and will exceed total pipeline trade by 2050, whereas in 2018 it was only just over half pipeline trade.
• The LNG sector is expected to grow at 2.9% to 1077 bcm by 2050, while pipeline trade will expand more slowly at a rate of 1.2% per annum to reach 1063 bcm by 2050.
• LNG liquefaction capacity is set for a period of rapid growth, doubling by 2050, with many projects scheduled to come on stream in the next 7 to 10 years.
• The USA, Australia, Qatar, Russia and Mozambique are projected to lead the growth in export capacity. With over 120 mtpa of liquefaction capacity under construction and another 260 mtpa planned, the share of LNG exports will rise from the current 37.2% to 45.2% of total exports by 2030, and to 50.3% by 2050.
• Over the forecast period, 9.7 trillion USD is earmarked for investment in the gas sector.