Despite today's global efforts to transition energy systems from fossil fuels, almost every major region is increasing investment in infrastructure to increase the use of natural gas for power generation.
The Zhitong Finance App learned that, according to data from the think tank Global Energy Monitor (GEM), globally, more than $720 billion will be spent on gas pipelines under construction or planned, and another 190 billion US dollars will be used for facilities that process liquefied natural gas (LNG) imports.
The total investment involved (committed to ongoing or planned projects in the near future) shows the strong momentum of the traditional fossil fuel industry, even as clean energy supplies are being deployed at an accelerated pace.
Once completed, these pipelines and LNG import terminals will extend the use of natural gas over the next few years and ensure that fossil fuels will continue to play a critical role in critical power systems beyond 2030.
Large-scale pipeline capital expenditure
Currently, the geographical distribution of natural gas pipelines is mainly concentrated in North America and Europe, accounting for more than 60% of the global pipeline network. But the planned future pipeline capital expenditure will have a greater global impact.
According to GEM data, the six regions of North America, East Asia, South Asia, sub-Saharan Africa, Eastern Europe, and Latin America all account for more than 10% of total global expenditure on gas pipelines being built or planned.
North America is spending the most on current or planned projects, at $106.4 billion. East Asia, which includes mainland China, Japan, South Korea, and Taiwan, followed, with about 102 billion US dollars.
South Asia, sub-Saharan Africa, and Eastern Europe each plan to spend more than $70 billion on gas pipelines, which means that several major economies are committed to expanding the use of natural gas.
Pipeline network expansion
North America's current gas pipeline network is the largest to date, extending over 400,000 kilometers (250,000 miles).
However, in terms of planned pipelines, the continent is only sixth, with just over 11,000 kilometers of pipelines under construction or planned.
This means that once current and planned construction is completed, the North American pipeline network will grow by less than 3%.
By contrast, once the planned 68,000-kilometer pipeline is completed, the East Asian pipeline network will jump by more than 50%. After the completion of the project under construction, the East Asia gas pipeline network will be close to 200,000 kilometers, making it the second-largest gas pipeline region after North America.
The expansion of the East Asian gas pipeline network should lead to a sharp increase in gas users — from homes to factories to industrial plants — who no longer burn other forms of energy.
Once existing projects are completed, the length of the gas pipeline network in South Asia and sub-Saharan Africa will increase further, increasing by 88% and 282%, respectively.
As pipeline networks expand, electricity providers that currently provide consumers with a variety of energy sources may reduce coal supplies and switch to cleaner natural gas, which can help reduce pollution.
But given the high costs of developing and expanding pipeline networks, power producers may also commit to using these pipelines for several years before completely abandoning the use of fossil fuels.
LNG import terminal network potential
The establishment of a global network of liquefied natural gas import terminals is another clear sign that countries are generally committed to increasing the use of natural gas in power generation.
According to GEM data, Asian countries already account for the largest share of liquefied natural gas imports and are also the largest investors in new production capacity, accounting for 74% of the total capital expenditure of the new LNG import terminal.
Of the $190 billion in the global plan, China and India alone account for $109 billion.
However, Germany, Brazil, Italy, the Philippines, and Vietnam each plan to invest more than 4 billion US dollars in liquefied natural gas terminals. According to current development plans, 12 other countries plan to invest more than 1 billion US dollars each.
Coupled with the extension of the pipeline network, these LNG import terminals indicate that in the foreseeable future, even if power companies continue to launch renewable energy supplies, they will continue to commit to using natural gas for power generation.