Gas de­mand in trans­port sec­tor to rise 3.5% an­nu­ally to 478bcm in 2050: GECF

Gulf Times - Gulf Times Business - - FRONT PAGE - By Pratap John

Gas de­mand in the trans­port sec­tor has been fore­cast to rise at an an­nual pace of 3.5% over the GECF out­look pe­riod (un­til 2050), much faster than in other sec­tors, achiev­ing about 478bcm in 2050.

Trans­port util­i­sa­tion will ac­count for 8% of global gas con­sump­tion, Doha-based Gas Ex­port­ing Coun­tries Fo­rum (GECF) said in its lat­est out­look.

In 2018, natural gas de­mand in the trans­port sec­tor to­talled 157bcm, con­sti­tut­ing 4% of global gas con­sump­tion. Nearly 56% (87bcm) was re­lated to the us­age in pipe­line trans­port, 44% to the road (58bcm) and marine (11bcm) seg­ments, GECF said in its ‘Global gas out­look 2050’ re­leased in Doha re­cently.

GECF fore­casts show that this ro­bust gas de­mand growth rate will be en­cour­aged by im­por­tant progress in natural gas ve­hi­cles (NGVs), par­tially through pol­icy ini­tia­tives aimed at off­set­ting trans­porta­tion emis­sions, which ac­count for more than 24% of global GHG emis­sions. The In­ter­na­tional Mar­itime Or­gan­i­sa­tion (IMO) reg­u­la­tions are also fore­cast to have an im­pact on gas de­mand in trans­port, as the mar­itime in­dus­try be­gins to switch to Liq­ue­fied natural gas (LNG).

“In spite of the grow­ing in­ter­est of gas ap­pli­ca­tions in the rail­way in­dus­try, de­mand vol­umes in this seg­ment are fore­cast to de­velop at a mod­er­ate pace, while road trans­port will drive con­sump­tion,” GECF noted.

About 214bcm of in­cre­men­tal gas vol­umes to 2050 are ex­pected to stem from the de­vel­op­ment of the global NGV mar­ket. The use of LNG as a marine bunker­ing will be another promis­ing area with ad­di­tional con­sump­tion of 76bcm within the fore­cast hori­zon.

Over­all, global gas de­mand in the land and marine trans­port seg­ments (ex­clud­ing gas used in pipe­line trans­port) is pro­jected to rise by about 300bcm, from 70bcm in 2018 to over 370bcm by 2050. It will cor­re­spond to a growth rate of 5.4% per year, GECF noted.

The in­creas­ing avail­abil­ity of natural gas, to­gether with its eco­nomic and en­vi­ron­men­tal ad­van­tages, make NGVs a very prom­i­nent al­ter­na­tive to diesel and gaso­line-based en­gines in road trans­port. Liq­ue­fied pe­tro­leum gas (LPG) is also widely used across the world. How­ever, be­ing a mix­ture of propane and bu­tane it is not as clean as natural gas, whose main chem­i­cal com­po­nent is meth­ane. Over the last decades natural gas, pre­dom­i­nantly in the form of com­pressed natural gas (CNG), has made re­mark­able progress in var­i­ous sub-mar­kets – pas­sen­ger buses, light com­mer­cial ve­hi­cles (LCVs) as well as heavy-good ve­hi­cles (HGVs) and spe­cial min­ing and haulage com­pany trucks. Surg­ing by al­most 17% per year, natural gas de­mand in the road trans­port seg­ment in­creased from 4bcm in 2000 to about 58bcm in 2018. Ma­jor con­tri­bu­tions to this growth came from Asia Pa­cific (China, In­dia, Pak­istan) and the Mid­dle East (par­tic­u­larly, Iran), while Latin Amer­ica coun­tries (mainly, Ar­gentina and Brazil) ex­pe­ri­enced mod­er­ate rise, stay­ing around the same vol­umes from 2005 to 2018.

In spite of the im­pres­sive growth rate, natural gas rep­re­sents less than 2.5% of the to­tal en­ergy con­sumed in the global road trans­port mar­ket, which is cur­rently dom­i­nated by oil-based prod­ucts — gaso­line and diesel — with a 96% share.

As many coun­tries are ad­just­ing leg­is­la­tion to re­duce the en­vi­ron­men­tal im­pact of trans­porta­tion modes and set­ting tar­gets to mit­i­gate air pol­lu­tion, GECF an­tic­i­pates that the role of meth­ane in this seg­ment will grow over the fore­cast pe­riod, as­sum­ing a higher up­take of NGVs and a cor­re­spond­ing level of gas de­mand. Favourable gov­ern­ment poli­cies and reg­u­la­tory frame­works are ex­pected to be the forces driv­ing in­creas­ing pen­e­tra­tion of natural gas in road trans­port.

The natural gas share of en­ergy de­mand in the global road trans­port mar­ket (es­ti­mated to grow from 2,154mn tonnes oil equiv­a­lent — Mtoe in 2018 to 2,420Mtoe by 2050) — is fore­cast to rise from 2.5% in 2018 to 10% by 2050, while petrol and diesel will go down from 96% to 83%. Over the same pe­riod, elec­tric­ity use is pro­jected to in­crease from 0.3% to 6%, a much more im­pres­sive growth.

Given that EV pen­e­tra­tion into all ve­hi­cle classes is un­der­way, they are con­sid­ered to be a more re­al­is­tic op­tion for the pas­sen­ger, pub­lic trans­port and LCV seg­ments, while the po­ten­tial of NGVs could be much higher in the HGV seg­ment, where trans­port costs are more vi­tal. More­over, en­vi­ron­men­tal reg­u­la­tions are set to be stricter, pro­pel­ling fuel re­place­ment in oil-based prod­ucts.

In this con­text, GECF noted the fu­ture prospects of natural gas will be mostly con­cen­trated in HGVs, driven by an­tic­i­pated re­stric­tions on the use of diesel trucks in a range of coun­tries. The ma­jor­ity of gas de­mand is ex­pected to come from LNGpow­ered trucks thanks to their high an­nual mileage. It is worth men­tion­ing that govern­ments of more than 10 coun­tries in 2017-2019 in­tro­duced for­ward-look­ing sales bans on new diesel or petrol ve­hi­cles for 2025-2040, which rep­re­sents an ad­di­tional push for gas us­age, GECF said.

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