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Ernst & Young’s latest Business Pulse: Oil & Gas report has highlighted the increasing demand for energy in emerging markets, as one of the top 10 opportunities for growth in the MENA (Middle East and North Africa) natural gas sector.
The report predicts that by 2035 nearly a quarter of the world’s energy will be generated from natural gas, and the rapid growth markets of the Middle East, China, and Africa are all set to experience the largest growth.
Dr. Thorsten Ploss, the MENA Oil & Gas leader at Ernst & Young, said that “natural gas is seen as a potentially cleaner replacement for coal and also as a ready replacement for nuclear power in countries which have phased out nuclear power due to public concerns.
Countries needing to increase power capacity quickly are particularly likely to turn to natural gas, as the construction time for natural gas generating plants is just two to three years.”
Related article: Russia Opens LNG Floodgates
As time goes on the number of major oil discoveries made around the world will fall, and extracting the oil from existing wells will become much harder and more expensive. This will force many international oil companies to shift their focus to producing natural gas, and with the correct regulation in play, governments could already begin to prepare for a world dominated by gas.
Ploss explained that “the abundance of gas and the commensurate interest from non-OECD countries to exploit these resources has resulted in many companies developing significant Liquid Natural Gas (LNG) portfolios.
Learning to operate in LNG is, therefore, essential for companies wanting to thrive in this area and expand the market opportunities for their gas. Over the next few years, natural gas will rise up the list of priorities for companies.”
As populations rise and infrastructure is developed in rapid growth markets such as China, natural gas will play an important part of meeting the increasing energy demand. Ernst & Young believe that for the foreseeable future fossil fuels will still be the largest source of new energy generation, despite the advances in renewable energy sources such as solar and wind.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com