LNG

The Gas Exporting Countries Forum (GECF), the OPEC of natural gas and LNG based in Qatar, has published its Annual Outlook outlining supply and demand forecasts and expects total upstream and midstream investments to reach $8.7 trillion by 2050.

In its sixth edition, the Outlook finds that natural gas can become the fuel of choice in satisfying the growing world energy needs, addressing climate change and improving air quality.

“The GECF Global Gas Outlook 2050 underscores that investment in natural gas is critical for the stability of global energy systems,” declared Mohamed Hamel, Secretary General of the GECF.

“Environmental policies are a key driver of the projections contained in the Outlook. In this context, whilst upholding that natural gas is the cleanest of hydrocarbon fuels, the Outlook explores the state of technologies that will make it even cleaner,” added Hamel.

The GECF comprises 19 countries who together represent 71 percent of the world’s proven gas reserves, 43 percent of its marketed production, 52 percent of pipeline gas and 58 percent of LNG exports.

Asia-Pacific demand

“Global energy demand will rise by 29 percent over the next three decades, with the majority of that increase emanating from growing economies in Asia Pacific and Africa,” said the report.

“Natural gas demand will rise by 46 percent from 3,840 billion cubic metres in 2020 to 5,625 Bcm in 2050. The Asia-Pacific region will represent the largest growth share,” it added.

“The power generation sector will take a frontline place, accounting for 42 percent of the total increase in gas demand. The transport sector and blue hydrogen generation will emerge as significant new areas of gas demand expansion,” stated the GECF.

The Middle East, principally Qatar, will deliver 32 percent of the global gas supply increase and there will be a growing role for deepwater and unconventional natural gas resource developments to meet demand.

The global gas trade is forecast to increase by 45 percent by 2050 and become more integrated and interrelated through LNG expansion.

Trade in natural gas is seen expanding by 1.5 percent per annum between 2020 and 2050 to reach 1,815 Bcm and account for a third of global gas demand.

The report forecasts that LNG will overtake pipeline trade around 2030 to reach 845 million tonnes (1,150 Bcm).

The GECF has 11 full members, including seven LNG producers: Algeria, Egypt, Equatorial Guinea, Nigeria, Qatar, Russia, Trinidad and Tobago, along with pipeline producers Bolivia, Iran, Libya and Venezuela.

It also has eight observer-status member countries. They include five LNG nations: Angola, Malaysia, Norway, Peru and the United Arab Emirates, along with Azerbaijan, Iraq, and Kazakhstan.

Liftings of liquefied natural gas cargoes were steady in the week as European gas benchmark prices rose and LNG futures for the US, Indian and North Asian markets for January and February 2022 gained ground.

Algeria’s Minister of Energy and Mines Mohamed Arkab has held face-to-face talks in Algiers with Total Chairman and Chief Executive Patrick Pouyanné for discussions including future liquefied natural gas projects.

Algerian state energy company Sonatrach, one of the main suppliers of LNG and pipeline natural gas to Europe, said it planned to increase production and sales in the coming year amid upgrades at its liquefaction plants at Skikda and Arzew on the Mediterranean coast and new natural gas discoveries for export in the future alongside industrial development in petrochemicals.

US LNG equipment-maker and provider Air Products posted a rise of 7 percent in fiscal full-year net income to $1.93 billion as it was awarded three major LNG contracts for plants in Mozambique in southeast Africa, Qatar and Algeria.

Algeria, the North African liquefied natural gas producer, has agreed a renewed deal with Tunisia and Italian energy company Eni for the pipeline transportation of more natural gas to southern Europe as the Algerians also prepared to direct new gas finds into industry rather than LNG exports.

Algerian LNG exports have been falling and last year they dropped by 18.2 percent to 10.10 million tonnes compared with 12.34MT the previous year at its two liquefaction plants at Skikda and Arzew on the Mediterranean Coast.

Tunisian Industry Minister Slim Feriani and Eni Chief Executive Claudio Descalzi signed the new agreement to transport Algerian natural gas by pipeline through Tunisia.

The agreement follows another reached with Algerian state energy company Sonatrach in May in relation to the purchase of gas and transport across the Strait of Sicily and completes the contractual framework that allows Eni to import Algerian gas into Italy.

With this agreement, Eni said it was undertaking to operate the Algeria-Tunisia-Italy pipeline for the next 10 years, through its subsidiary Trans-Tunisian Pipeline Company (TTPC), ensuring the necessary reinvestment for modernising infrastructure and taking advantage of the exclusive rights to the entire transport capacity.

Built in the early 1980s and strengthened subsequently over several phases, the trans-Tunisian pipeline consists of two lines, 48 inches wide and around 370km long, from the Algerian-Tunisian border near Oued Saf to the Cap Bon headland. It also has five compression stations.

“With a transport capacity of approximately 34 billion cubic metres per annum, it plays a key role in Italian and Tunisian energy supply and will continue to do so,” stated Eni.

The Italians added that the pipeline contributed to the diversification of sources and to the energy transition in the Italian market.

“The agreement represents a further confirmation of Eni's long-standing commitment to North African countries, not only in hydrocarbon exploration and production, but also in managing transport infrastructure,” added Eni.

Sonatrach Chief Executive Rachid Hachichi also met with Eni counterpart Descalzi to review progress on boosting natural gas output in the North African nation.

Sonatrach reported in early 2019 that several petrochemical joint ventures were under negotiation to monetise its natural gas through channels other than pipeline and LNG exports.

Industry is therefore expected to remain the main driver of natural gas consumption growth in Algeria in the near future.

Residential and commercial demand is set to remain stable, with limited consumption growth owing to gas already having high market penetration in Algeria.

Sonatrach and Eni confirmed the intention to accelerate the development of new oil and gas projects in the North Berkine basin in the Algerian desert that will lead to a significant increase in national production.

The project is composed of two phases. The first is related to oil development and has started up.

The second one, a natural gas project, is scheduled to come on stream by the end of September 2019 with a 180-kilometres pipeline being completed.

French energy major Total and Algerian oil and gas company and liquefied natural gas producer Sonatrach have signed a new gas agreement and concession contract as part of their existing partnership and closer LNG ties through Total’s acquisition of Engie assets.