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CEDIGAZ,theInternationalAssociationforNaturalGas
Medium and Long Term Natural Gas Outlook 2018
CEDIGAZ, June 2018
SUMMARY
CEDIGAZ Reference Scenario: Main characteristics
2
Main trends (%/year)
Projections on global primary energy demand are based on assumptions on the evolution of the world economy, population, energy and environmental policies and technology.
Falling energy intensity implies a deceleration of global energy demand.
In CEDIGAZ Scenario, price developments enable natural gas to expand its role in the energy mix and also stimulate sufficient investment in E&P and infrastructures to meet rising gas demand.
Medium and Long Term Natural Gas Outlook 2018
Main assumptionsEconomy Global GDP growth of 3.4%/year
Demographics Population growth of 0.9%/year
Environment INDC commitments
Policy Announced National Energy Plans*
Geopolitics Mitigation of current conflicts post ‐2025
Technology • Only current and approved technologies• Rapid improvements of economics of REN• Energy intensity is improving across regions
Pricing • Growing influence of spot pricing• Oil indexation still in force in Asia
*Some National Energy Plans are viewed with caution and key targetscan be delayed when considered too ambitious.
CEDIGAZ Reference Scenario: Main trends (2016 – 2040)
3
Population and economic expansion fuel energy demand growth.
India will record the largest volumetric growth in energy demand over the projection period.
No energy demand growth in OECD Asia and a significant reduction in energy consumption in Europe.
Virtually all the growth in world energy demand comes from fast‐growing emerging economies.
Emerging economies account for around 85% of gas demand growth.
%/year
Medium and Long Term Natural Gas Outlook 2018
Primary regional energy demand growth and contribution of natural gas
4
Unit: Mtoe
Medium and Long Term Natural Gas Outlook 2018
0
500
1000
1500
2000
2500
3000
3500
4000
Natural gas ‐ 2016 Natural gas ‐ 2040
Other fuels ‐ 2016 Other fuels ‐ 2040
0 1000 2000 3000 4000 5000
Oil
Gas
Coal
Bioenergy
Other renewables
Nuclear
Hydro
2016 Growth in 2016‐2040
Primary energy demand by fuel and region
5
Unit: Mtoe
Medium and Long Term Natural Gas Outlook 2018
‐500 1500 3500 5500
Other
OECD Asia
South & Central America
CIS
Middle East
Africa
EU
Other non‐OECD Asia
India
US
China
2016 Change 2016‐2040
Energy demand growth by zone
‐400 ‐200 0 200 400 600
Other
OECD Asia
South & Central America
CIS
Middle East
Africa
EU
Other non‐OECD Asia
India
US
China
Gas Coal Renewables*
Changes 2016‐2040 by zone
The two countries accounting for the majority of energy demand growth – India & China ‐ both start with coal‐intensive fuel mixes but will experience total opposite trends in coal consumption over the outlook period.
China alone accounts for a quarter of the growth of renewables (bioenergy and hydro included).
The EU leads the transition to a lower carbon economy.
* Hydro and Bioenergy included
Prospects for the global energy mix
6
2016: 13.7 Gtoe 2040: 17.3 Gtoe
The declining shares of coal and oil are offset by increasing use of renewables and gas
Medium and Long Term Natural Gas Outlook 2018
27%
32%
22%
5%2%
10% 2%
CoalOilGasNuclearHydroBioenergyOther renewables
22%
28%24%
6%
3%
10%7%
Prospects for energy balance by region
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Unit: Mtoe
CoalOilGas
NuclearHydro
BioenergyOther REN
Growth 2016‐2040Energy: + 1%/yearGas: + 1.4%/year
Medium and Long Term Natural Gas Outlook 2018
Differences in the evolution of the fuel mix across regions stronglyimpact the global energy transition.
0
500
1000
2016 2040
0
500
1000
1500
2000
2016 2040
0
500
1000
1500
2016 2040
0
500
1000
1500
2016 2040
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2016 2040
0
500
1000
1500
2016 2040
0
500
1000
1500
2000
2500
3000
2016 2040
CISNORTH AMERICA
SOUTH & C. AMERICA
EUROPE
AFRICA
MIDDLE EAST
ASIA‐OCEANIA
0
100
200
300
400
500
600
700
800
900
1 000Power generation Industry, feedstock and energy Residential‐commercial Transportation
Natural gas demand prospects by sector
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Bcm
Natural gas demand in 2016 and 2040 by sector
Medium and Long Term Natural Gas Outlook 2018
Natural gas production prospects
9
Bcm2016
2040
Medium and Long Term Natural Gas Outlook 2018
0
200
400
600
800
1000
1200
14002016 2025 2040
North America27%
CIS22%
Middle East17%
Asia‐Oceania16%
Africa6%
South & C. America
5%
Europe7%
North America26%
CIS20%Middle
East21%
Asia‐Oceania17%
Africa8%
South & C. America
4%
Europe4%
The largest production gains are expected in the Middle East (+ 411 bcm), North America (+ 352 bcm) and Asia‐Oceania (+ 305 bcm).
0%
5%
10%
15%
20%
25%
30%
35%
0
1 000
2 000
3 000
4 000
5 000
2016 2025 2040Conventional Coal‐to‐Gas & BiogasShale gas CBMTight Gas Methane hydratesShare of unconventional (%)
Unconventional natural gas prospects
Medium and Long Term Natural Gas Outlook 2018 10
Global production
Non‐conventional gas (coal‐to‐gas and biogas included) provides 62% of supply growth, rising from 823 bcm in 2016 to 1707 bcm in 2040.
Bcm
The bulk of projected unconventional gas production is in the form of shale gas.
Total 2040 = 4927 bcm
Conventional65%
Coal‐to‐Gas & Biogas2%
CBM3% Tight Gas
8% Methane hydrates
0%
North America18%
Asia‐Oceania2%
Other2%
Shale gas22%
Prospects for interregional natural gas trade
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Note: Total net flows between the seven CEDIGAZ regions (North America, South & Central America, Europe, CIS, Africa, Middle East, Asia Oceania), not including trade within CEDIGAZ regions.
Unit: Bcm
Medium and Long Term Natural Gas Outlook 2018
‐1000
‐800
‐600
‐400
‐200
0
200
400
600
800
1000
2016 2025 2040
Europe Asia Oceania South & Central AmericaNorth America CIS AfricaMiddle East
Net importers
Net exporters
63% 50% 38%36%
48%58%
53%47%
44%
Positive numbers denote net imports, negative numbers net exports.
0
50
100
150
200
250
300
350
400 2016 2025 2040
0
50
100
150
200
250
300 2016 2025 2040
Pipeline trade LNG trade
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Note: Pipeline exports from the Middle East and Central Asia to Asia (Iran‐Pakistan‐India pipeline & TAPI) are envisaged post 2025 in Cedigaz Outlook.
Interregional net flows by pipeline and LNG
The largest growth in interregional pipeline flows is represented by CIS’ exports to China.
Bcm
Exports Imports
The largest growth in interregional LNG flows is represented by US LNG exports to Asian markets.
Medium and Long Term Natural Gas Outlook 2018
Exports Imports
Russia’s pipeline exports to China via the Western Route have not been included as the Altai project has been postponed indefinitely.
Global LNG Supply Demand Gap
Medium and Long Term Natural Gas Outlook 2018 13
Delays in the second wave of LNG supply bring a risk of tighter markets in the early 2020s.
Source: CEDIGAZ LNG Service
0
100
200
300
400
500
6002016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
mmtpa
Effective Liquefaction Capacity vs. LNG Demand
North America
Middle East
South & Central America
Europe
C.I.S.
Asia/Oceania
Africa
World LNG DemandOperational & Under Construction Capacities
Required additionalcapacity
Prospects for global energy‐related CO2 emissions
Medium and Long Term Natural Gas Outlook 2018 14
Comparison of scenarios in terms of CO2 emissions
In CEDIGAZ Scenario, CO2 emissions increase by almost 0.4%/year to peak at 35.2 Gt to 2035‐2040.
The growth of global emissions declines more strongly in the long term.
This scenario remains well above the 2°C path despite the deployment of renewables and efficiency, as well as coal to gas switching.
%/year
‐2.5
‐2
‐1.5
‐1
‐0.5
0
0.5
1
1.5
CEDIGAZ(2016‐2040)
BP(2016‐2040)
IEA NewPolicies
(2016‐2040)
ExxonMobil(2016‐2040)
IEA SDS(2016‐2040)
Energy demand
Energy‐related CO2 emssions
CONCLUSION
15
Natural gas demand will grow by 1.4%/year from 2016 to 2040 and gas will expand its role in the energy mix, according to CEDIGAZ Gas Outlook 2018.
Cedigaz Scenario assumes a deceleration of natural gas demand growth over the 2025‐2040 period, due to a stronger push for renewables and energy efficiency, especially in OECD countries.
The growth of natural gas will be backed by the abundance of competitive conventional (Middle East, Russia) and unconventional gas resources (US).
A large part of the future natural gas demand growth is driven by China’s political support for gas use in power and industry.
The strong expansion of LNG supply will help gas to expand in the energy markets, especially in Asia.
The growing importance of LNG trade will accelerate the integration of natural gas markets and will result in a closer linkage between international prices.
Global peak demand for gas is not expected in the foreseeable future.
Due to its environmental advantages natural gas is a key pillar of a gradually decarbonising energy and electricity system.
New low carbon technologies are both sources of risks and opportunities for gas demand growth.
A more rapid deployment of wind and solar and stronger energy savings could further reduce gasdemand growth in the long term.
Medium and Long Term Natural Gas Outlook 2018
CEDIGAZ Publication « Medium and Long Term Natural Gas Outlook 2018 »
is available online:
http://www.cedigaz.org/members/gas‐market‐analysis.aspx
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About CEDIGAZCEDIGAZ is an international association with members all over the world. Dedicated to natural gas information,CEDIGAZ collects and analyses economic information on natural gas, LNG and unconventional gas in anexhaustive and critical way. CEDIGAZ data has been the industry's reference since its foundation in 1961.
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