The increasing levels of greenhouse gases in atmosphere have led to more sever global warming issues, and the climate change mitigation becomes urgent in the following decade. As the carbon dioxide from burning fossil fuel is the primary source, decarbonization policies are expected to be made globally to fulfil the Paris Agreement, which may make many fossil fuel resources unburnable and energy infrastructures no longer economic prior to the end of lifetime. These are defined as stranded assets, and as a significant amount of investments would have already been made, financial stability may be threatened during this transition towards the low-carbon economy. Among all energy sectors, natural gas assets are subject to great controversies as natural gas is broadly viewed as the bridging fuel during the energy transition phase. Its demand levels are expected to grow in short-term to compensate the decreasing use of coal and oil, whereas in long-term, gas would still be phased out due to its carbon emission. Such feature leads to higher risks in natural gas assets getting stranded subject to the varying policies, and the potential losses in intensive capital investment could therefore be rather serious. This article aims to analyse the magnitude of potential asset stranding in gas production and transmission industry on a worldwide basis. A detailed examination on the influences from both import regions’ foresights and export regions’ perspectives is conducted. For the import regions, how their imperfect demand projections and their respective contracting preferences could signal the market expansion have been simulated. Regarding the export regions, the perspectives on future market dynamics and prices by natural gas suppliers is the key of investigation. Insights on the possible cooperation between supply and demand sides to mitigate the asset stranding risks are also provided.
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