The World Natural Gas Business

Report Highlights

• Through 2005, global natural gas demand by utilization will reach 104 trillion cubic feet (TCF)/year, increasing at an annual average growth rate (AAGR) of 3.0% during the forecast period.
• Global consumption will increase from 85 TCF/year in 2000 to 94 TCF/year in 2005, corresponding to an AAGR of 2.0%, up from the 0.6% witnessed between 1997-2000.
• Demand by transportation will spearhead growth in natural gas utilization, increasing at an AAGR of 7.3% through 2005.
• Primary energy utilization represents the largest demand base and will show an increase in demand at an AAGR of 2.6% over the period.
• Regionally, areas outside of North America and Europe will witness a natural gas consumption increase corresponding to an AAGR of nearly 5.0%.

INTRODUCTION

STUDY GOAL AND OBJECTIVES

BCC Research (BCC) has just completed the study on the world natural gas . The study quantifies the world's natural gas utilization demand scenarios. It assesses the role of natural gas as a primary energy source and a major feedstock for the production of high quality clean power and chemicals, respectively. It quantifies the global demand for natural gas by type of product application and production technology, and the relationships between the major consumers and producers. The international natural gas trade is also evaluated and quantified by type of distribution.

Detail is given to the various technologies involved in producing natural gas including the critical stages of processing and how they relate to the global consumption and demand pattern. The objective of this BCC report is to provide a critical and detailed evaluation of the current status of the global natural gas industry and how deregulation of the industry and recent breakthroughs in conversion and fuel cell technology will make natural gas competitive with liquid crude oil, coal and nuclear generation fuels and/or as a feedstock for methane derived chemicals.

REASONS FOR DOING THE STUDY

Deregulation and restructuring of the natural gas industry in many countries worldwide has led to the development of new markets. These newer markets have changed dramatically how the industry operates. Also, over the past three years, new environmental legislation has come on steam. These factors have affected the demand pattern for natural gas. New technology for power generation in fuel cells and gas conversion in Fischer-Tropsch synthesis are also creating possibilities for monetising remote gas and gas produced in marginal fields. Renewed interest in these processes has created huge investments in the natural gas industry worldwide.

Therefore, the use of natural gas for chemicals and primary energy production is envisaged to make a major advance in the next five years (2000-2005) as even more stringent environmental legislation is enforced. Higher quality power generation and transportation fuels will become mandatory and harmful chemical emissions reduced drastically. Natural gas will offer petroleum refiners, power generation utilities and automakers flexibility to meet international agreements. Therefore, the major reasons for carrying out the study are:

a)  To assess and quantify the current global natural gas market and demand.

b)  To investigate and evaluate the future global use of natural gas as chemical feedstocks and for primary energy production in the period 2000 - 2005.

c)   To assess the various technologies needed to facilitate the supply and use natural gas in the global context.

d)   To evaluate and quantify the international natural gas trade.

e)  To determine the extent of the impact of the natural gas industry on the petroleum, chemical, agricultural, food, energy, environment and transport industries.

f)   To evaluate the economic, industrial and environmental benefits of the use of natural gas.

CONTRIBUTION OF THE STUDY AND FOR WHOM

The role of natural gas as a primary energy source globally is growing rapidly. Over the five-year period through 2005, the use of natural gas a primary feedstock for the manufacture of chemicals and petrochemicals is also expected to make some rapid advances. The three-year period from 1997-2000 witnessed the emergence of new technologies in energy with fuel cells. Resource availability, cost and environmental considerations all indicate strong reliance on natural gas in industrial applications and electricity generation. Natural gas is also replacing other traditional fuels in residential, commercial and transportation end uses as well. Therefore natural gas offers the unique opportunity of making a significant contribution to the global program to reduce reliance on high carbon content fuels and thus facilitate compliance to international agreements. The study will therefore be useful to marketing managers, strategic planners, forecasters, new product and developers, decision makers in the chemical, petroleum and energy industries as well as government agencies, venture capitalists, and those involved in research and development work worldwide.

SCOPE AND FORMAT

The report assesses and evaluates the global demand and utilization of natural gas in the chemical and energy production markets as well as the near term options for its production to meet the forecasted demand. The report is divided into 11 sections.

It begins with an overview of the natural gas industry. The overview describes the importance of the natural gas industry in relation to the overall global economy including a brief history and important indications for the industry. The major products and applications are reviewed and the effect of the gas industry in the future is discussed. Key findings from the study are presented.

The government environmental/energy regulation scene is discussed as it applies to natural gas and describes the environmental regulation changes and agencies involved including industry compliance and quantification of economic effects.

The report then goes on to analyze the structure of the natural gas industry and competitive aspects including the driving forces of the industry. Important strategies for staying competitive and important shifts in the industry are assessed. Trade practices of the natural gas industry and the impact of natural gas on the petroleum and power industries are discussed. Concentration factors, company results/earnings and changes are presented. Other aspects covered in this section include market segmentation/fragmentation, channels of distribution, pricing economics and purchasing influences.

Natural gas markets by product type are evaluated including non-associated gas, associated gas, coal-bed methane, methane hydrates, tight-sand gas and landfill/
digester gas. These are quantified with global and regional forecasts made up to 2005. Natural gas utilization and demand by type of end use applications such as residential, industrial, electric generation, commercial, and transportation is also evaluated and quantified forecasts made to 2005.

The natural gas technology is presented covering patent evaluation and markets and investments by type of technology from production to supply, storage and distribution, and power generation. The economic process and industry giants are assessed including company expertise and know-how and leaders in research and development are also profiled.

World demand for primary energy is considered and looks at the global energy mix, the current fossil fuel dominated portfolio and tracks the changes that will occur over the five-year period through 2005.

The global marketed supply of natural gas is then presented and looks at the production of natural gas by region/country, by source (offshore and onshore) and the reserves/production ratio. It discusses the depletion rate in relation to the ultimate natural gas recovery.

Natural gas processing is increasingly becoming a major part of the world natural gas , as more countries with associated gas look for more economic ways of monetising this resource. This section presents data on global natural demand by type of processing including natural gas liquids.

International aspects of natural gas demand are also considered including trade data and forecasts for the 2000-2005 time frame. The effects of foreign and U.S. investment and technology by country and/or region are quantified. Major overseas companies involved in the natural gas in processing, delivery and other activities are also assessed.

Company profiles of more than 100 companies involved in the world natural gas are profiled with report_highlightss of their major activities in the natural gas including the company name, telephone number, fax number and contact name and number.

METHODOLOGY

In this report both historic and current data have been used in the natural gas demand analysis. The results of the calculations presented here are therefore based on three components: a historic analysis of the global natural gas demand/utilization in the period 1997-2000, estimates for 2000 and forecasted demand for the 2000-2005 time frame. The report also gives estimates of losses in natural gas as a result of transportation and distribution and explains how such losses are being minimized.

INFORMATION SOURCES

Information sources include trade data (national and international), company publicity literature, conference reports, world trade technical journals and interviews with company representatives.