SPENDING on offshore gas exploration and production is predicted to reach a peak of $1.3 trillion – almost £1tr – by 2025, according to a Norwegian risk management group.

The figures would mean a huge increase from $960 billion (£732bn) in 2015.

In its Energy Transition Outlook, DNV GL said a “golden age for gas” would see it overtake oil as the world’s primary energy source by 2026.

The group forecast that liquefied natural gas (LNG) capacity would double by the late 2040s, connecting its shifting sources with changing centres of demand.

It said the world will need less energy from the 2030s onwards but will still require a significant amount of oil and gas in the lead-up to mid-century.

This independent model of the world’s energy system forecasts that rapid gains in energy efficiency will lead to a peak in humanity’s energy demand by 2035 at a level around 15% higher than in 2017.

Global demand for energy is then set to decline, said the group, thanks to increasing and rapid electrification of the world energy mix, in addition to slowing of population and longer-term world economic growth.

Global electricity demand is forecast to rise by 160% by 2050, increasing its demand of final energy demand from 19% last year to 45%.

Renewable sources will increasingly dominate world electricity generation, it said, mainly driven by solar and wind power.

However, despite the rise of electricity generated from renewables, oil and gas will still account for a “significant” 40% of world energy demand in 2050.

The outlook expects natural gas to overtake oil to become the world’s largest source of energy in 2026.

“In a ‘golden age’ for gas, it will retain this position through to mid-century when it will account for a quarter of the world’s energy supply,” said the report.

The company’s forecast model predicts that global oil demand will peak in 2023, while demand for gas, the least carbon-intensive of fossil fuels, will continue to rise until 2034.

“New resources will be required long after these dates to continue replacing depleting reserves, and significant levels of investment will be needed to support this shift from an oil-led to a gas-led energy mix,” it said.

Liv Hovem, CEO of DNV GL – Oil & Gas, said: “Gas will fuel the energy transition in the lead-up to mid-century.

“It sets a pathway for the increasing uptake of renewable energy, while safeguarding the secure supply of affordable energy that the world will need during the energy transition.”