UK-based Douglas-Westwood is forecasting in a new report that global natural gas production will grow from its current level of 2,600 Bcm/year (91.8 Tcf) to 4,755 Bcm/year (167.9 Tcf) by 2025, averaging an annual increase of 2.75%.

Estimates of capital required for its exploitation range between $25 billion to $40 billion per year, with total expenditures to 2025 estimated at $630 billion. Analysts said that included in the amount would be $520 billion to build infrastructure, with the remainder on exploration and production. Over the next five years, the analysts believe more than $39 billion of the amount will be spent on liquefied natural gas (LNG) plants, carriers and import terminals.

“Natural gas is the only viable fuel that can link the carbon-based global energy supply used today to a renewables-based energy supply that will have to be used in the future,” said Michael R. Smith, author of the study. “It is the only relatively clean alternative to oil and coal, fully supported by commercially effective production and distribution technologies — there is little doubt that natural gas will be the fuel of the future.”

Smith said, “total remaining gas reserves and resources are huge, estimated at 275 Tcm (9,711.5 Tcf), with Russia holding the largest share.” He noted that a significant portion of the remaining gas is “low risk,” and is located in the Middle East and other moderately remote areas. The rest of the gas is “higher risk,” which means the gas is either located in technologically challenging (usually deep or deepwater) reservoirs, or in remote regions, especially Polar regions.

Series editor John Westwood said, “Indigenous supplies are already declining in the three gas importing areas — North America, Western Europe, North Asia — and around three quarters of new gas production will be traded across borders into these three regions.” He said that the international gas supply trade is set to double from around 24% in 2003 to as much as 50% by 2025, a level near which oil trades currently.

Douglas-Westwood also predicts a surge in pipeline building across the world. Pipes now convey approximately 94% of global gas (2,440 Bcm/year or 86.2 Tcf/year), and analysts expect it will increase to about 3,275 Bcm/year (115.7 Tcf/year) by 2025, a 34% increase. This would represent 69% of global marketed gas, according to the study.

“Since 1980, LNG exports have increased by 6.5% per year from 38 Bcm (1,341 Bcf/year) to over 150 Bcm (5,297 Bcf/year),” said Westwood. “LNG is now the world’s fastest growing fuel and growth is expected to average 10% per year so that by 2025 LNG will be conveying 1,240 Bcm (43.8 Tcf/year) of gas equivalent or 26% of total yearly production.”

For more information on the global gas study, visit the web site at www.dw-1.com.

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