2 Minute Expert Briefing: ‘Natural Gas on the Rise’

After immersing herself in the natural gas market we asked Katie Rushton, one of our energy analysts, to share her findings in a quick 2 minute briefing.

Here are the highlights from Katie’s latest reports:

The global natural gas market is growing fast due to a number of factors:

  • Gas prices are low relative to other fossil fuels
  • In some emerging economies, supply can not meet demand
  • Liquefied natural gas (LNG) is on the rise as it is easier to transport

This has boosted the market for liquefied natural gas (LNG), making it more international and much larger. So what does this mean for different countries and regions?

Here is a snapshot of the situation in different regions:

The US is the largest producer

NRG Expert’s Global Guide to Natural Gas Utilities 2012 reveals that the United States became the largest producer of natural gas in 2010.  It was also the largest importer. The remaining countries in the top 10 producers are Russia, Canada, Iran, Qatar, Norway, China, Saudi Arabia, Indonesia and Algeria.

 

Europe is a net importer of natural gas

Eastern European countries are reliant on Russia for gas supplies. The rest of Europe has a more diversified and predominantly piped natural gas supply. Only Denmark, the Netherlands and Norway are net gas exporters, with reserves expected to last eight, sixteen and twenty-two years respectively. Overall this means that Europe will continue to rely on imports.

Gazprom dominates the market in the CIS

The CIS region is a net exporter of natural gas. Russia is the biggest natural gas exporter with state utility, Gazprom, dominating the market. Reserves of Russian gas are expected to last another seventy-five years. Increasingly competition to Russian gas is coming from Turkmenistan – a newer entrant to the natural gas market.

Arab Spring created a high degree of uncertainty over supplies

Natural gas is exported from the Maghreb region (Morocco, Algeria, Tunisia, Libya, and Mauritania (and the disputed territory of Western Sahara)), which has been recently affected by the recent Arab Spring, creating a high degree of uncertainty over supplies. Gas reserves in Maghreb are expected to last from twenty-seven years to ninety-two years for Algeria, the biggest exporter. Natural gas produced is supplied to Europe via pipelines and, to a lesser extent, as liquefied natural gas (LNG).

Nigeria has 100yrs or more of reserves

In Sub-Saharan Africa, Nigeria is the dominant player in the natural gas market. It has the 9th largest gas reserves in the world, which are estimated to last over one hundred years. The reserves are largely undeveloped, as the country has focused more on oil than natural gas.

Qatar is now the number one liquefied natural gas (LNG) exporter worldwide

The Middle East is a major region for both gas production and gas consumption.  Iran is the largest natural gas producer but exports are severely restricted by sanctions. Most exports are from Qatar, the second largest natural gas producer, and now the number one liquefied natural gas (LNG) exporter worldwide. Gas reserves in both countries are expected to last more than one hundred years. Other countries in the region have natural gas markets and significant potential markets, especially if infrastructure is developed and natural gas flaring is reduced.

In Asia, transportation distances are large

Overall, the Asia Pacific region is a net importer of natural gas, with some regional variation. Korea and Japan, for example, are major natural gas importers with very little domestic gas production. China and India are major growth markets. The distances that natural gas is transported between exporting countries such as Australia, Indonesia and Malaysia and importing countries are large. Thus, a large amount of natural gas is exported as LNG.  Within the region, deregulation varies considerably.

Production of natural gas in S & C America is limited

Very little natural gas is located in South & Central America, with nearly 66% of the regions’ reserves located in Venezuela. Natural gas production here has been limited, as a large proportion of the natural gas is re-injected to enhance oil production. Trinidad & Tobago and Argentina are the two largest natural gas producers.

The future for this sector promises to hold much interest and potential impact globally. For more information and analysis on the global natural gas market, at both a global and a country level, see NRG Expert’s reports:

>> Global Guide to Natural Gas Utilities (Ed. 1  2012)

>> Global Gas Report (Ed. 1  2012)

To find out more, please call or e-mail us to discuss your specific requirements:

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Toronto:   +1 (416) 840-5847
Toll-Free (US/Canada): 1-888-NRG-XPRT
E-mail:      info@NRGExpert.com

 

 

Background information

Katie Rushton is an energy analyst at NRG Expert. She has spent the last two and a half years immersed in the energy sector and has written these reports to help consultants, analysts, businesses and investors understand the sector. She holds a graduate degree in Biochemistry from the University of Birmingham and postgraduate degrees in Toxicology from the University of Birmingham and Environmental Management from the University of Nottingham. 

NRG Expert is a London and Toronto based energy intelligence and market research publisher. NRG Expert provides up to date information and analysis of worldwide energy markets, including electricity, natural gas, coal, nuclear, renewable energy, water and waste, and all elements of energy infrastructure. 

20 Comments
  1. How does the cost of coverting Gas into LNG affect its commercial competitiveness? Is Compressed Natural Gas a more cost efficient solution? How reliant are we on gas vs other energy sources?

  2. Its expensive to convert gas into LNG, but if the price is high enough and there is sufficient demand then the cost can be justified. It seems that demand is increasing, sufficiently enough, to justify the cost.

  3. Very interesting to see the estimates on the longevity of gas reserves, a big area of discussion currently, useful information!

  4. The gas reserve stats really do put it all into perspective don’t they! Makes you think each time you put the heating on or turn on the stove. Educating the retail maket is one way of elongating the reserve times. That and the likely price incresase as reserves start to diminish! Think this research piece has many potential clients.

  5. LNG is generally used for long-distance transportation of natural gas and piped natural gas is mainly used for the transportation of gas over shorter distances. There becomes a point distance-wise where it is more financially viable to transport natural gas as LNG instead of via pipelines.

    In terms of reliance on natural gas, at the end of 2010 natural gas accounted for 24% of primary energy consumption worldwide. There is, of course, variation at the regional-level, country-level etc. For example, natural gas accounts for around 11% of primary energy consumption in the Asia Pacific region and for 47% in the Middle East. For some countries like Russia the share of natural gas is high (54%) and in China it is low (4%), but increasing. It is worth noting that the use of natural gas is increasing generally worldwide.

  6. Thanks for your feedback Katie

    I didn’t realise natural gas consumption worldwide is as high as 24%!

  7. Worldwide estimates on how long natural gas reserves will last vary. The number of years of natural gas left based on rates of production and reserves is around 59 years, with some variation around this figure. At the country and regional-level the number of years of natural gas left varies considerably. Although, production rates may increase or decrease and new gas discoveries are being made all the time.

    Resources of natural gas that were once considered not financially viable to exploit may become viable with advances in technology. Therefore, it is worth considering both natural gas reserves and resources. The estimated number of years of natural gas reserves left has remained between the mid 50s and mid 60s for at least the past forty years, due to new discoveries and advances in technology.

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