Additional Upstream Gas Investment Required, Says IEA

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New investments in upstream gas projects will be crucial for the global market to meet growing energy demand while correspondingly meeting emissions reductions targets, the International Energy Agency (IEA) has stated.

Citing its World Energy Outlook 2022 report, the IEA acknowledged that while demand for gas is projected to gradually decrease in the mid- to long-term, investments in upstream activities are critical to meet short- to medium term demand, enabling producers to offset natural declines in legacy fields.

In the report, the organization lays out three different scenarios – the Stated Policies Scenario (STEPS); the Announced Pledges Scenario (APS) and the Net Zero Emissions by 2050 Scenario (NZE) -, all of which require upstream investment.

Investments of up to $280 billion across the entire gas value chain will be required in the STEPS while $240 billion worth of new investments in upstream projects will be needed in the APS to address the current global energy crisis and to meet decarbonization targets. Meanwhile, in the NZE, the IEA indicates that up to $200 billion will be required for the global market to maintain production in existing upstream gas fields and in already approved projects awaiting commissioning.

In the near-term, natural gas prices are anticipated to remain volatile owing to shifts in global supply chains and rising demand in Asia and Europe.

According to the IEA, “The crisis has reminded policy makers and energy consumers of the immediate importance of stable and affordable natural gas supplies. The traditional arguments in favor of gas — its role as a reliable partner to the clean energy transition and its ability to step in to fill the gap left by declining coal and oil — are also being tested.”

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Nicholas Nhede

Nicholas Nhede

Nicholas is an energy sector journalist with a passion on how technology and diversification of the energy mix can be used to address energy sector challenges. Nicholas holds a diploma in Journalism and Communication studies and has been covering energy-related topics including the Internet of Things, distributed energy and digitalisation since 2015.

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