Industry

To contain the growth of greenhouse gas emissions and make global gas market equilibrium resilient, it is critical to enhance investment in natural gas supply. (Image source: Adobe Stock)

A potential global gas supply shortfall along with the likelihood of failing to meet sustainability goals are highlighted in a new report from the International Gas Union, Snam and Rystad Energy, as energy demand continues to rise

The 2024 Global Gas Report (GGR) released at the ONS Conference, reveals that global gas markets are in fragile equilibrium, with supply growth limited while demand is expected to accelerate to 2.1% by the end of 2024.

Asia continues to be the key engine of the demand growth, while North America and the Middle East are in the lead on the exports.

Should gas demand continue to grow as in the last four years, without additional production development, a 22% global supply shortfall is expected by 2030 the report says, underscoring the urgent need to scale up investments.

Energy demand has continued to rise in developed and developing regions, while coal burning increased more than ever in 2023, remaining the biggest source of global energy emissions. If current energy demand and supply trends persist, 2030 targets outlined in policy driven decarbonisation scenarios will most likely be missed. Despite efforts to enhance efficiency and ongoing industrial decline, Europe has experienced energy demand growth. In North America, energy demand has surpassed 2019 levels and continues to climb, fuelled by the transport sector and AI data centres. Asia's demand is also surging, particularly in the industrial sectors of India and China. Meanwhile, Africa's energy demand is growing faster than in most regions, driven by urban development, though it still falls short of the levels required for full energy access.

Enhanced investment in natural gas needed

To contain the growth of greenhouse gas emissions and to make global gas market equilibrium resilient, it is critical to both enhance investment in natural gas supply and scale up biomethane, carbon capture and storage (CCS), and low-carbon hydrogen technologies, the report says. Natural gas today provides an immediate opportunity to cut emissions from coal by 50% and from oil by 30% through cost-effective switching. Biomethane is a direct substitution for natural gas. Today, its scale is significantly below potential at roughly 1% of the natural gas market, and it is primarily produced in North America and Europe. However, new centres of production are emerging in hubs like China and India. CO2 capture capacity, a crucial technology for a successful energy transition, is also gaining momentum, but needs to be scaled up, as for biomethane and low-carbon hydrogen. These technologies will play a critical role in decarbonising energy supply (especially in hard-to-abate sectors) and ensuring its resilience. Scaling them is essential, requiring urgent investment and enabling policies to start building the growing volumes of project proposals.

IGU president, Mme Li Yalan, commented, “Energy and gas demand continue to grow, driven by improving living standards in the developing world, new demand trends, and ongoing growth in developed regions. We must look for a realistic way to balance these trends with long-term sustainability goals, such as building a diversified energy system, and comprehensive approaches to tackle climate change. Embracing innovative solutions and flexible policies will be key to navigate this highly uncertain energy landscape.”

Snam CEO, Stefano Venier, said, “The energy transition represents a unique challenge for mankind. A journey that will not be linear, marked by great aspirations and many hurdles, from geopolitical tensions to technology disruptions and unforeseeable global economy developments. In this continuously evolving transformation, natural gas and related infrastructure represents a critical element of sustainable resiliency for the global energy system, while new green and low carbon molecules will play an essential role to achieve a just and technologically neutral transition.”

Rystad Energy CEO, Jarand Rystad, added, “Natural gas, now 30% of the fossil fuel mix, is cheaper and cleaner than oil and coal, with emissions significantly lower than both. As global LNG access expands, natural gas is on track to surpass coal by 2030 and oil by 2050.”

The agreement was signed during a special ceremony held in Kuwait City. (Image source: QatarEnergy)

QatarEnergy has signed a 15-year LNG Sale and Purchase Agreement (SPA) with Kuwait Petroleum Corporation (KPC) for the supply of up to 3 million tons per annum (MTPA) of LNG to the State of Kuwait

According to the SPA terms, the contracted LNG volumes will be delivered ex-ship to Kuwait's Al-Zour LNG Terminal onboard QatarEnergy’s conventional, Q-Flex, and Q-Max LNG vessels, starting in January 2025.

The agreement was signed during a special ceremony held in Kuwait City by Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the president and CEO of QatarEnergy, and Shaikh Nawaf Saud Al-Nasir Al-Sabah, deputy chairman and CEO of KPC. The signing was witnessed by senior executives from KPC and QatarEnergy.

Al-Kaabi said, “I am pleased to be in Kuwait, a country that is dear to our hearts, and to build a new long-term partnership between KPC and QatarEnergy, that constitutes a central element in supporting Kuwait’s sustainability goals particularly in the electricity generation sector. It also reflects our commitment to support the future needs of all our clients, foremost of which is KPC.

“Our bilateral relations continue to grow and achieve the aspirations and interests of our peoples under the wise leadership of His Highness Sheikh Tamim bin Hamad Al Thani and His Highness Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah, which underlines the deep brotherly ties and the long-term partnership between Kuwait and Qatar.”

This new agreement is the second long term LNG SPA with KPC, and is considered pivotal in further boosting bilateral trade between the State of Qatar and the State of Kuwait.

The new pump is designed to meet the demanding requirements of the oil and gas industry, among others. (Image source: Michael Smith Engineers)

Michael Smith Engineers Ltd has launched the TPM magnetic coupled peripheral pump, engineered by Dickow Pumpen

The TPM peripheral pump, also known as a turbine pump, is designed to meet the demanding requirements of industries including oil & gas, chemical, petrochemical, aviation, and renewable energy. It operates in a similar way to centrifugal and side-channel pumps, offering the best of both worlds. With its low Net Positive Suction Head (NPSH) requirements, the TPM pump is ideally suited for applications with limited suction head.

The TPM range can deliver flow rates of up to 17 m³/hr and a maximum differential head of 400 metres. With a design pressure of 40 bar and maximum operating temperature of 300°C, the TPM range is built to ensure reliable performance even under the most challenging conditions.

One notable feature of the pump is its ability to handle liquids with entrained gas, enabling continuous operation even during gas release or temporary air ingress. Additionally, its hermetically sealed design makes it ideally suited to handling toxic, explosive, or environmentally hazardous fluids, ensuring safety and compliance with stringent environmental standards.

David Todd of Michael Smith Engineers said, "‘We are delighted to be able to offer our customers this new pump technology from Dickow Pump, whom we have been in partnership with for almost three decades. We are confident this will be as successful as the rest of the Dickow pump range."

U.S. crude production growth is slowing. (Image source: Adobe Stock)

Lower production growth outside OPEC+ will narrow the market surplus in 2025 but is still expected to outstrip global demand growth, according to the latest S&P Global Commodity Insights Outlook

The Outlook expects non-OPEC+ crude oil production growth (including condensate) to be 390,000 bpd lower (829,000 bpd of growth) in the second half 2024 and 570,000 bpd lower (1,117,000 bpd of growth) in 2025 than the previous month’s forecast.

Lower expectations for U.S. crude production growth are the main reason for the downward revision to the non-OPEC+ crude oil production outlook. S&P Global Commodity Insights forecasts U.S. crude growth for the second half of 2024 at 182,000 bpd, which is 174,000 bpd less than previously expected. U.S. crude oil production growth for 2025 is now expected to be 429,000 bpd, a downward revision of 311,000 bpd.

“The reason for the cut in our U.S. supply growth expectation is simple – there has been less upstream activity so far this year than previously anticipated. That is a reflection of expectations for decelerating demand growth and lower prices. The United States is still on track to produce more oil in 2025 than any other time in history. However, the degree by which it surpasses the previous record has reduced substantially,” said Jim Burkhard, vice president and head of research for Oil Markets, Energy and Mobility, S&P Global Commodity Insights.

Potential oversupply

Weaker U.S. supply growth does not necessarily mean higher prices, the analysis says. OPEC+ recently reaffirmed its plans to increase production later this year. With more oil supply from OPEC+ coming, the global oil market is still on track to be oversupplied in 2025, although OPEC+ can alter production policy at any time. Despite the cut to the U.S. outlook, S&P Global Commodity Insights expects crude oil prices in 2025 to be lower, on average, than in 2024.

“The pace of supply growth is slowing, but that coincides with decelerating global demand. Factor in the prospect of additional OPEC+ barrels coming into the mix, and it all adds up to a potentially oversupplied crude market in 2025,” said Burkhard.

The IEA in its latest monthly report also mentions the “marked slowdown in Chinese oil demand growth", projecting global oil demand growth at slightly less than 1 mn bpd in both 2024 and 2025.

The IEA also notes the “Olympic levels of volatility” in the oil markets in recent weeks, with persistent geopolitical tensions in the Middle East and some relatively positive macroeconomic data pushing prices higher in the second week of August following tumbling prices in July and early August.