1. Natural Gas World Market Is Coming Of Age?
George H.B. Verberg
President International Gas Union
GASTECH, Bilbao, March 2005

2. Long Ago....... Natural Gas Was Used To .......
predict the future of gods and mankind....
Apollo temple
Delphi, Greece
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GASTECH, Bilbao, March 2005

3. Not That Long Ago…..:The Gas Industry Started To Serve The Customer!
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GASTECH, Bilbao, March 2005

4. Since than demand has been growing: incremental demand of natural gas till 2010 and 2020….
largest liquefaction train: 7.8 mtpa (Qatar)
148 60
( )
(2002 – 2020)
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GASTECH, Bilbao, March 2005

5. Important driver for natural gas growth: Power Generation (global)
TWh
Fuel market-shares in
power generation
IEA weo 2004
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GASTECH, Bilbao, March 2005

6. CO2 emission from power plants
spread due to type of coal (lignite/hard coal)
and technology (old/new-high-efficiency)
CCGT when wind is low
Sources: life-cycle assessment of electricity generation systems and applications for climate change policy analysis, Meier, 2002, published on website Nuclear Energy Institute; own data; IEA
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GASTECH, Bilbao, March 2005

7. Costs in the LNG chain Average price per ship ($ million) 8 5 6 7 9 1011
1989
1991
1993
1995
1997
1999
2001
2.5% p.a.
Upstream costs ($/boe)
Liquifaction costs transformed
($ per ton of capacity)
From a presentation by BP
(february 2003)
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GASTECH, Bilbao, March 2005

8. Middle East LNG—Setting a New Global Cost Benchmark ($ per MMBtu)
Source: Cambridge Energy Research Associates.
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GASTECH, Bilbao, March 2005

9. Natural Gas in a Liberalised Market: Spot Prices USA
Fluctuerende
Bron AGA
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GASTECH, Bilbao, March 2005

10. LNG prices Japan, USA, EU US gas & oil prices (EIA) Report IEEJ 2003
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GASTECH, Bilbao, March 2005

11. LNG trade history and perspectives15
Bcm
LNG trade as %
of total gas market 11 8 6
History (CEDIGAZ)
Forecast (IEA weo 2004)
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GASTECH, Bilbao, March 2005

12. Five fundamentals for the sound development of the gas industry
SAFETY and Reliability of Infrastructure and Appliances,
Security of Supply,
Competitive Pricing,
Clear Regulatory Framework Indiscriminately by Nature and in Execution,
Sustainability!
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GASTECH, Bilbao, March 2005

13. Importer’s security of supply and LNG
Importers like to diversify their supplies; the only cost-effective way to cope with the security of supply issue,
Also suppliers like to diversify their sales portfolios;
Some 9% of LNG sales are at present spot-sales, and it is expected to grow to some 20% in the coming years.
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GASTECH, Bilbao, March 2005

14. Importer’s security of supply and LNG (2)
Growing LNG trade will enable price arbitration, so prices in the demand regions become more and more inter-linked, it will take time: >5 years
The growing LNG spot market enhances flexibility and competition, at the same time it is an essential tool for the big gas suppliers to push gas prices in the desired direction (a reliable supplier cannot close the valve for a LT-gas contract, but he can do for spot supplies)
Long term contracts will remain Europe’s backbone for pipeline gas and LNG;
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GASTECH, Bilbao, March 2005

15. International LNG trade: connecting markets
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GASTECH, Bilbao, March 2005

16. How to diversify further in Europe ?!
2000 km
3000 km
4000 km
Yamal
Central Iran
sif
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GASTECH, Bilbao, March 2005

17. Structure of the (world)gas market changes..
Russia no longer confined to serve Europe: China and the Pacific Rim and the US are within their reach;
Middle East suppliers will ship their LNG to wherever;
Algeria, Trinidad Tobago, Nigeria serve both sides of the Atlantic Basin;
China sources around the globe (Iran, South America, Australia…)
India imports LNG but wants also pipeline gas (Iranian gas via Pakistan)
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GASTECH, Bilbao, March 2005

18. So for Many Decades to Come...
Enough natural gas, but
Regions of demand are NOT the regions with reserves, so
A lot of long distance transportation and transit,
Through many countries or narrow sea straits
And production areas are more and more difficult and costly
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GASTECH, Bilbao, March 2005

19. The best supply is the saved m3,
What About the Climate..?
The best supply is the saved m3,
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GASTECH, Bilbao, March 2005

20. GAS: Triennium 2003 - 2006 Powers the People Preserves the world
Promoted by IGU
BUSAN,S-Korea,May 23-25,2005, 7th Congress on Information Technology in Energy
AMSTERDAM, June 5-9,2006
WORLD GAS CONFERENCE
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GASTECH, Bilbao, March 2005

21. INTERNATIONAL GAS UNION covers >95 % of world gas sales ‘spokesman’ of the gas industry
Non Members
Membership from 67 countries and 18 Associated Members
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GASTECH, Bilbao, March 2005

22. 23rd World Gas Conference and Exhibition
Thank you
See you in Amsterdam!
23rd World Gas Conference and Exhibition
June 5 –

23. 04/12/2018
GASTECH, Bilbao, March 2005