OPEC Predicts Natural gas To Surpass Oil As Second-Largest Fuel In Global Energy Mix

The Organization of Petroleum Exporting Countries (OPEC) has predicted that natural gas is expected to overtake oil as the second-largest fuel in the world's energy mix by 2030.

This prediction was issued by OPEC in its World Oil Outlook report, which was made public on Monday, October 31.

According to the research, demand for gas is anticipated to rise by 19.6 mboe/d, reaching 56.3 mboe/d in 2045.

In the next years, natural gas is anticipated to displace both coal and conventional biomass use and continue to be a preferred fuel.

Natural gas has a long-term promise based on adequate gas resources and its relatively low CO2 emissions.

Forthis reason, a lot of nations want to increase the proportion of gas in their energy mix.

Natural gas's share of the world's energy mix would rise from 23% in 2021 to about 24.5% in 2045.

The outlook report also stated that OPEC members like Nigeria will drive the increase in global gas consumption.

Due to this, non-OECD nations' share of global gas demand will increase from 55% in 2021 to 66% in 2045.

Natural gas will be crucial in ensuring that more people in Africa have access to modern energy and diminishing the traditional usage of biomass for heating and cooking.

In order to combat climate change, more gas will be used.

According to OPEC, natural gas, the cleanest hydrocarbon, is the ideal regional option for Africa in the fight against poverty and climate change, as well as one of the finest solutions for sustainability.

Particularly in sub-Saharan Africa, natural gas is thought to represent Africa's best chance for a long-term energy supply solution that will help reduce energy poverty and improve quality of life. 

Natural gas can offer African countries accessibility, affordability, and dependability as a source of energy for sustainable development.

The OPEC projection predicts that Africa would produce more than 9% of the world's natural gas supply in 2050, up from 6% in 2020, which bodes well for LNG exports in the continent.

Africa is expected to produce more gas than any other continent, with an average annual growth rate of 2.8%, from 230 bcm in 2020 to 520 bcm in 2050.

This massive development will strengthen Africa's position in the world's natural gas supply and raise the continent's significant contribution to gas production.

Currently, Africa has liquefied natural gas (LNG) liquefaction capacity of roughly 71.1 million tonnes per annum (mtpa) spread among Nigeria, Algeria, Angola, Cameroon, Egypt, and Equatorial Guinea.

Gas projects totaling 18.8 million tonnes per year (mtpa) are being built in Mauritania, Mozambique, and Senegal; 9 million tonnes per year (mtpa) have received a final investment decision (FID) in Congo and Nigeria; and 26.4 million tonnes per year (mtpa) are in various stages of front-end engineering design (FEED) elsewhere on the continent.

In addition, there are 41.2 mtpa of potential and stalled projects and 64 mtpa of proposed projects.

The International Energy Agency (IEA) had previously predicted that by 2025, the continent's natural gas consumption will increase by an average of 3.3% annually.

Algeria, Egypt, and Nigeria's industrial and energy needs are what are mostly driving this.

The growth rate of the sub-region, which averages 6% annually (excluding Nigeria), is driven by the expansion of domestic production in West African nations.

However, the market's entire size will only reach about 14 bcm annually in 2025.

The National Gas Expansion Programme, launched by Nigeria's Ministry of Petroleum Resources in 2020, aims to transform Nigeria into a gas-based industrial nation by establishing gas as an automotive fuel, a resource for industries, captive power, and clean cooking.

If the NGEP is properly executed, Nigeria might greatly gain from natural gas, according to OPEC's forecasts.

Natural gas analyst Kayode Oluwadare told Nairametrics that Nigeria's natural gas resources might be developed with the appropriate financial investments and regulatory changes.

Nigeria currently lacks the capacity to fully develop its gas assets.

Therefore, OPEC's predictions may act as a push for investors to make investments in the nation in order to increase domestic output.