Natural gas is an important source of energy supply due to its competitive prices, low emissions compared to other fossil fuels, and its role in serving as firm electricity capacity. Historically, most natural gas trade occurred through pipeline networks, but liquefied natural gas (LNG) has been growing rapidly because it can be flexibly supplied to more regions globally. Both pipeline and LNG capacity are set to increase in coming decades, with much infrastructure proposed and under construction. There is a need to understand the long-term evolution of natural gas trade and associated infrastructure.

Previous studies exploring natural gas trade largely do not account for its multisectoral interactions or they do not include detailed representation of natural gas trade infrastructure. Studies have largely focused on the near-term or on individual countries. Here, we explicitly represent LNG and pipeline gas as separate trade pathways in the Global Change Analysis Model (GCAM) – a long-term, global, multisector model representing the interactions of natural gas with other energy sectors and the broader economy. In our model representation, LNG is traded in a global market, while pipeline gas is traded in six regional pipeline networks consistent with current trade patterns. We explore a range of scenarios to understand how alternative trade patterns and transitions to a low-carbon economy might affect the future evolution of natural gas trade.

Low liquefaction and shipping costs have more traded LNG and less traded pipeline gas, resulting in greater trade overall and less reliance on domestically produced gas in regions with more expensive resources. By contrast, trade barriers result in less LNG and pipeline trade and more domestic gas consumption, as well as shifts to other fuels. Scenarios assuming a transition to a low-carbon economy are characterized by underutilized natural gas capacity due to reduced gas demand. By 2050, most underutilization occurs in the Russian, North American, and European pipeline networks, in addition to underutilized LNG capacity. When combined with trade barriers, underutilization further increases. This study lays the foundations to explore investments and premature retirements of capacity in the natural gas sector, within the context of its interactions with the broader economy.