Natural gas industry faces £300 billion investment deficit annually

Natural gas has never been more important to the global energy mix as it replaces coal and liquid fuels while supporting the adoption of intermittent renewable energy, particularly in developing countries. However, years of underinvestment in oil and gas development risk an imbalance in the energy trilemma of affordability, availability, and sustainability in the years to come.

A $200 to $300 billion annual gap in global investment in natural gas development over the past decade risks supply imbalances with further price spikes globally as demand for natural gas rises in developing countries, Majid Jafar, CEO of Crescent Petroleum, told an audience of business leaders and policy makers attending the International Energy Forum annual Symposium in Riyadh.

The 14th IEA-IEF-OPEC Symposium on Energy Outlooks was held on Wednesday and opened by Prince Abdulaziz bin Salman Al Saud, Minister of Energy of Saudi Arabia. Presented as a joint producer—consumer energy dialogue, the event was co-hosted by Joseph McMonigle, secretary-general of the International Energy Forum; Haitham Al-Ghais, secretary-general of the Organisation of the Petroleum Exporting Countries (OPEC); and Dr Fatih Birol, executive director of the of the International Energy Agency. The discussion focused on conditions of market volatility and a widening gap between energy supply scenarios, making dialogue on energy outlooks and market signals more important than ever.

"Clean burning natural gas is more important than ever as an enabler of the energy transition, replacing coal and liquid fuels for power generation while supporting renewables when there is insufficient sun or wind. But as demand for natural gas rises, a shortfall in investment of about $200 billion to $300 billion annually over the past decade will impact supply going forward,” Jafar said. "We must seek balance in the energy trilemma of affordability and availability as well as sustainability, especially in the developing world, which will be central to achieving prosperity while tackling climate change as a global challenge."

Jafar, who leads the region’s oldest private oil and gas company and is also board managing director of Dana Gas PJSC, noted for example, that while global trade in liquified natural gas (LNG) is projected to grow by 50 per cent by 2040 to approach 700 million tonnes per year, underinvestment in infrastructure and supply is leading to high LNG prices which worsen energy poverty in developing countries in Asia and Africa and spur increased burning of coal, resulting in higher carbon emissions that contribute to climate change.

Crescent Petroleum became one of the first companies in the industry to achieve carbon neutrality across its operations in 2021 and has maintained its neutrality ever since after completing a series of projects to reduce carbon intensity and offset remaining emissions. The milestone was the culmination of years of effort to improve total process efficiencies and become one of the least carbon-intensive companies in the energy sector with a carbon intensity one third of the global industry average.