On the cusp of global golden age for gas
Article by Alexandra Marie Ferraro, Energy Analyst.
“It is definitely a gas golden age, not a question,” Gazprom Deputy Chairman Alexander Medvedev stated as he cited population and consumer technology booms as the main drivers of gas demand at the ADIPEC Global Business Leaders discussion last week. The session, moderated by IHS Markit Vice Chairman Daniel Yergin, tackled whether a golden age for natural gas and LNG is unfolding.
In addition to Medvedev, among the panelists were Occidental Petroleum’s CEO Vicki Hollub, Wintershall Chairman Mario Mehren, and Persero President Director Hendi Prio Santoso. The productive debate covered what it will take to usher in the golden age of natural gas more quickly and for the long-term.
Europe: Affordability was the name of the game as the panel addressed the topic of European gas supply. Wintershall Chairman Mehren invoked high electricity prices and high emissions in Germany following the country’s major push for renewables, stressing that natural gas would have been—and still is—the most cost effective way of lowering emissions. Medvedev furthered Mehren’s point saying that his company and partners’ plans for the Nord Stream 2 pipeline represented a more efficient, economical way of transporting gas to Europe given the shorter route and Gazprom’s existing upstream gas capacity.
“We are on schedule [and] rather sure that both Nord Stream pipelines will be commissioned in the first quarter of 2019,” Medvedev said, considering the recent regulatory obstacles to the project by Poland. “We need to have access to affordable energy and the European Union should not focus on preventing pipelines,” Mehren echoed.
Middle East: Pushing domestic production to meet increasing demand anchored the panel’s discussion regarding the Middle East. Oxy CEO Vicki Hollub believes gas demand will increase in the region, and cutting edge technologies are the way to fulfill that demand. She discussed her company’s partnership to develop the major Al Hosn gas project in the UAE, as well as projects in Qatar and Oman—all of which are destined to supply gas to the region.
The region’s desert climates and unconventional gas have not deterred companies such as Hollub’s; on the contrary, better technologies and strategic partnerships have enabled development in a region with growing local energy demands and economies that depend on hydrocarbon exports. “There is gas here, and there is a need,” Hollub concluded.
US: IHS Markit Vice Chairman then asked whether we should expect to see the US as a global contender in this golden age of gas. Hollub expects to see a “healthy supply” of US gas globally, exporting up to 12 bcm/day in the next 15 years. Medvedev contended that in Europe the liquidity of gas hubs must increase should the continent seek to attract more US LNG. In this vein, Mehren affirmed his belief that a mixture of sources is best, including LNG from the US along with piped gas.
More from ADIPEC: