EnergyBiz - January/February 2008 - (Page 42) Global Big Boys in Natural Gas DEV ELOPING LNG R ESOURCES BY K EN SILV ER STEIN Once natural gas was flared around the world as a waste by product of oil production. Now it is becoming a rich asset. A plant produces liquified natural gas in northern Qatar. sOurcE : ap phOTO the big oil companies are investing to bring the product to market as liquefied natural gas, or LNG. It is dedicating billions of dollars to liquefy, transport and then re-gasify natural gas. With predictions that world demand for LNG will triple by 2020 and with prices near $8 per million per British thermal unit, the risks are paying off. In its third quarter financials, Shell Oil says that LNG made a significant contribution to net profit. One division, Shell Petroleum Development, is expected to invest $3 billion over the next six years in Nigeria and all to collect stranded natural gas. The purpose is not just to sell a valuable commodity but to also avoid criticism that it is acting environmentally reckless by burning off gas. The biggest havens for LNG deposits include Qatar, Indonesia, Malaysia, Algeria, Australia and Russia, which are reported to hold 70 percent of global gas reserves. Nigeria, Egypt and Trinidad are well behind those nations. When tallied up, the Middle East holds 41 percent of the world’s natural gas while Russia contains 26 percent of it, says the International Energy Agency in Paris. Developed nations have 9 percent of proven natural gas reserves. Asia is the biggest LNG consumer followed by Europe and the Americas. With the Atlantic LNG market set to equal the Pacific market by 2010, the energy agency says that a global gas market will develop. Prices will keep rising in the near term because of high demand. AS global demand for the commodity races ahead, 42 E n E rgyB i z January/February 2008
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