Many under-construction or planned LNG export projects are not required to achieve the global goal of net zero emissions by 2050, according to the International Energy Agency's (IEA) Net Zero by 2050 report.
LNG export facilities yet to reach the development stage are also not needed under the agency's 2050 net‐zero emissions (NZE) scenario.
LNG trade will increase over the next five years from 420bn m³ in 2020, but then fall to around 160bn m³ in 2050 — a 60pc drop between 2020 and 2050. Pipeline gas trade is expected to fall by 65pc over this period, the IEA said. The NZE sees nearly all LNG exports in 2050 coming from the "lowest-cost and lowest-emissions producers", highlighting the importance of gas producers decarbonising production process, including through use of renewable electricity and carbon capture, utilisation and storage (CCUS) technology.
The scenario also envisages annual investment in new gas and oil projects falling to around $170bn after 2030 from around $350bn in 2021-30.
Gas demand to fall sharply under NZE
The NZE envisages a "major contraction of oil and gas production", with gas demand falling to 1.7 trillion m³ in 2050 from 3.9 trillion m³ in 2020, and with no further oil and gas exploration required beyond that already approved.
The fall in gas demand will come largely from the residential sector, with gas use for heating to drop by 98pc between 2020 and 2050, according to the NZE. No new fossil fuel-fired boilers would be sold from 2025, except when they are compatible with hydrogen. Additionally, gas consumption will be eroded by the introduction and hiking of CO2 prices for gas used to heat buildings, enhanced energy efficiency, the fitting of residential buildings with heat pumps and the use of renewables-based energy systems, such as solar water heaters.
But the decline in gas demand will slow from 2040, with more than half of natural gas use from 2050 accounted for by the production of hydrogen in facilities with CCUS.
The NZE envisages that the sharp rise in electricity demand in buildings — up by 35pc between 2020 and 2050 to 16,000TWh — will mean electricity becomes the "dominant fuel", accounting for two thirds of buildings-sector consumption.
