Gas to reach demand parity with coal and oil in 2040

The latest World Energy Outlook has projected a 40 per cent increase in natural gas production by 2040.

The International Energy Agency released the report, stating most growth would come from unconventional sources such as coal seam gas and shale gas.

Such growth would bring natural gas to parity with coal and oil in the global energy mix, at an estimated demand of just below 5.2 trillion cubic metres in 2040.

Outside of North America, currently developing major gas plays in the north-west, Australia will be the world’s major supplier of natural gas.

The report also cites plunging prices as a catalyst for a market rebalance in the oil market, with higher demand and lower growth in supply, suggesting a tightening oil balance would lead to prices around $80 per barrel by 2020.

Overall, world energy demand is tipped to grow by nearly one-third between 2013 and 2040, driven by developing countries, with China and the Middle-East likely to drive the most growth.

However, it has also been addressed that low gas prices will make investment for supply growth a challenging prospect.

APPEA chief executive Malcolm Roberts said Australia was benefiting from rising gas demand in the Asia-Pacific region.

“More than $200 billion has been invested in LNG projects, creating thousands of jobs, export income and new revenue for the Commonwealth and State governments,” he said.

“Australia will be the world’s leading exporter of LNG by 2018.

“The IEA forecasts that steady demand growth over the next 25 years will lead to another major wave of investment in gas production.

“The competition for investment will be intense. If Australia wishes to seize a share of this investment, businesses must continue to lift industry productivity while governments should focus on removing unnecessary regulatory and other costs.”

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