Asian demand for natural gas will fuel the growth of the LNG industry for “decades to come,” even as the world reduces its dependence on hydrocarbons, predicts one of the fuel’s largest US exporters.

Cheniere Energy’s chief commercial officer Anatol Feygin said the company expects to add $ 7 billion to its Texas liquefied gas facility over the next year.

“We believe Asia will be our industry’s growth driver for LNG demand for decades to come, and China is most of that,” said Feygin.

Cheniere’s investment in Texas is one of several new US LNG projects pending approval as companies rush to add more supply.

The vote of confidence in long-term demand for the supercooled fuel signals a rare area of ​​growth for the oil and gas industry, which is otherwise under pressure to shrink assets as the world moves to cleaner fuels.

In order to achieve net zero carbon emissions by 2050, according to forecasts by the International Energy Agency, natural gas demand would have to peak in the late 2020s and decline by more than 5 percent per year in the 2030s. In this scenario, no new gas fields are required and many of the LNG plants currently under construction or in the planning stage are not needed, according to the IEA.

Global LNG trade would peak in the mid-2020s, but demand will continue to rise in countries like China, where gas will replace coal, until at least 2030, the agency said.

Although coal is still by far the largest source of electricity in China, the government has invested heavily in domestic gas infrastructure as part of an initial phase in Beijing’s efforts to combat air pollution and achieve net carbon emissions by 2060.

“The infrastructure investment China is making for gas from a capital investment, but also from a political and regulatory perspective, is very substantial,” said Feygin, adding that Chinese demand alone has the potential to “double” Cheniere’s business.

A pioneer in US liquefied gas exports, Houston-based Cheniere signed the first long-term contract in 2018 for the supply of American LNG to China – for-tat tariffs for everything from gas to musical instruments.

Cheniere signed its second long-term Chinese supply contract this week, a 13-year contract with a subsidiary of China’s ENN Natural Gas. The deal came when another US exporter, Venture Global LNG, announced it had signed three long-term supply contracts with state-owned Sinopec that will more than double China’s imports of American natural gas.

European buyers have signed similar deals in the past but are unlikely to want such long-term deals given “uncertainty” about the speed of the transition away from hydrocarbons, Feygin said. Nevertheless, he predicted that they would still need supplies in the “medium term”.

“Europe will indeed have very robust demand for imported gas in the 2020s and 2030s, driven by the displacement of dirtier fuels. [and] the symbiosis we believe we will see for the next few decades between natural gas and renewables, ”he said.

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