Oil and Gas News

LNG, hydrogen key to global COVID-19 recovery

The International Gas Union’s  (IGU) Global Gas Report 2020 recorded strong growth in 2019, but due to COVID-19 related challenges this year, global gas use is set to fall.

Outlined in the report, a growth opportunity exists in liquefied natural gas (LNG), with imports reaching 482 billion cubic metres in 2019, up 13 per cent from 2018.

IGU expects figures to fall by around 4.2 per cent in 2020, but 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. India is planning to almost double the length of its gas transmission grid, while China will grow its gas network about 60 per cent by 2025,” the report stated.

APPEA chief executive officer (CEO) Andrew McConville said the report found 2019 was a strong year of growth for the global gas industry, 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. 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 and see the industry, both globally and in Australia, play a role in economic recovery,” McConville said.

APGA CEO Steve Davies added that the report set out the same global trends as seen in Australia.

“Direct use of natural gas for high-quality heat will continue to grow, gas-fired power generation has great potential to partner with renewable electricity and gas will start to decarbonise through improved operations and blending with biomethane and hydrogen,” Davies said.

The report finds technology and innovation can play key roles as countries, including Australia, look to significantly reduce their greenhouse gas emissions. 

IGU expect low-carbon gas technologies, such as biomethane, hydrogen and gas with carbon capture could play a major role in the low-carbon transition, with hydrogen catching attention in recent years.

“For hydrogen to achieve its potential, not only will strong policy action be needed to drive scale, but there will also be a significant need for infrastructure investment. Large-scale hydrogen networks will be necessary to connect high quality production and storage resources to users, which can help lower supply costs, increase security, enable competitive markets and facilitate international trade,” the Global Gas Report outlined.

Energy Networks Australia CEO Andrew Dillon said the report recognised the significant role hydrogen and renewable gas would play in decarbonising energy and support economic recovery post-COVID-19.

“The report demonstrates that Australia is punching above its weight on hydrogen research and development. It recognises, however, that we need the right policy settings to support the continued development of renewable gasses, a position Energy Network Australia supports,” Dillon said.