KUALA LUMPUR (Nov 22): Energy sources such as natural gas is still one of the most viable options to meet future energy demand, said executive vice-president and chief executive officer of gas and new energy business at Petroliam Nasional Bhd (Petronas) Adnan Zainol Abidin.
He said natural gas is needed to fill the demand gap in the market as some countries struggle to cope with higher energy prices amid the reopening of more economic sectors and with operations returning to pre-pandemic levels.
Natural gas also balances the sustainability, affordability and security of future energy demand as the world transitions to a low-carbon future, he said.
"Natural gas and liquefied natural gas (LNG), being the cleanest form of fossil fuels, are well positioned to continue to grow and make up the largest share in the primary energy mix," he said in his opening address at the virtual Malaysian Gas Symposium (MyGAS 2021) on Monday (Nov 22).
Adnan added that natural gas and LNG are also the most versatile sources of energy as they could be used in power, industry, heating, commercial and transportation.
Citing a study by management consulting firm McKinsey, he said gas demand is projected to be resilient until 2050 even in an accelerated energy transition scenario to meet global climate change goals.
In addition, the US Department of Energy has forecast a 40% to 45% jump in global consumption, while the International Energy Agency's World Energy Outlook has also projected for gas to take up a quarter of the primary mix by 2040, according to him.
Adnan reckoned that fossil fuels would continue to play a significant role in the global energy mix in the years to come.
He also noted that one of the biggest misconceptions is that many parties assume renewables would soon dominate the energy mix.
"Yes, the role of renewables will grow but it has its limitations. Energy supply from solar and wind are intermittent as they require an energy storage solution, which today is still costly.
"Other sources of renewable energy such as green hydrogen are still at the nascent stage and have a significantly higher cost of production compared to fossil fuels," he said.
At home, natural gas has played a crucial role in powering Malaysia’s economy for decades, with discoveries in Miri, Sarawak in the 1960s and offshore Peninsular Malaysia in the 1980s.
He said accessibility to natural gas had promoted the country’s fuel substitution to cleaner energy sources, increased energy security, accelerated industrialisation, and provided millions of jobs as well as billions of revenue for Malaysia.
“But as we all know, natural gas as a natural resource is finite. Today, it is more challenging to bring these gas resources on stream at the volume and cost that we used to do before.
“Hence, prolonging and increasing the domestic gas supply has been a strategic priority for Petronas to address the increasing demand for gas.
“To achieve this, we need the domestic market and end users to help create a conducive ecosystem that would continue to spur upstream investments for gas production,” he added.