GLOBAL – The global gas industry is expected to play a strategic role in the recovery of economies globally post Covid-19, and in a cleaner energy future, a new report by the International Gas Union (IGU) has found.

According to IGU’s annual gas report, global demand for gas rose by more than 2% last year only for it to fall by around 4% this year, as the Covid-19 pandemic takes its toll on economies reducing energy consumption globally.

IGU however, noted that the resulting low gas prices, as well as clean air and climate policies, will catalyse a faster migration to gas from other more polluting energy sources, such as oil and coal.

The report noted that this trend was already under way before the pandemic largely due to gas offering a cost-competitive energy option in key sectors including power, industry and transport.

The report showed the rising cost-competitiveness of gas and the increased global access to the commodity will both contribute to the medium-term growth of gas use globally.

According to IGU, liquefied natural gas (LNG) presented a great avenue for growth even as imports reached 482-billion cubic meters in 2019, up 13% from 2018.

While this figure is expected to fall by around 4.2% in 2020, IGU is confident that it could rebound quickly to previous levels as soon as 2021, depending on the persistence and longevity of the pandemic.

Ample natural gas resources exist to support demand growth, but greater gas infrastructure development is needed to support growth in the medium term, the report noted.

India already has plans to almost double the length of its gas transmission grid, while China has intentions of growing its gas network to about 60% by 2025.

The report also found that technology and innovation could play key roles as countries look to significantly reduce their greenhouse gas emissions.

Technologies such as biomethane, hydrogen and gas with carbon capture and storage can all play a key role in emissions reduction.

 2019 was a strong year of growth for the global gas industry, according to the report, as abundant supply and competitive prices underpinned emissions reduction through fuel switching from more emissions-intensive fuels to natural gas.

In 2020, the adverse impact of Covid-19 on the gas market has been significant and the industry now faces challenging market conditions, the report noted. 

Encouragingly, the report finds that continued abundant supply and cost-competitiveness, aided by a growing push for cleaner air and emissions reduction, can lead to a recovery in demand.

This recovery in demand globally is what the report believes will play a role in recovery of many economies globally.

The direct use of natural gas for high-quality heat would continue to grow, gas-fired power generation has great potential to partner with renewable electricity, the report noted.

A number of African countries are already leading the park in the switch towards gas as a primary source of energy in industry and in domestic use.

Ghana pioneered the use of Gas in power production in West Africa when it started using gas to produce about 470MW of power in 2015.

Nigeria and Egypt have also stepped up campaigns for gas utilization with both countries having passed legislation for the promotion of gas-powered vehicles in their jurisdictions.

These developments are thus expected to not only provide cleaner energy alternatives but also to provide increased revenues from gas, create jobs and eventually boost the economies of their respective countries.

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