Senior executives from the natural gas sector who spoke at Gastech 2014 on Monday said that Asian energy demand will surge in coming decades, creating challenges such as marshalling new sources of gas development and a restructuring of existing models of pricing and delivery.
“We're going to need all sources of natural gas supply to meet Asia's demand," said Pierre Breber, Corporate Vice President with Chevron Gas and Midstream. "LNG is key. We need to develop it under terms that are mutually beneficial for buyers and sellers. Breber added that “a large number of new greenfield LNG developments need to be built”.
Rob S. Franklin, Corporate Vice President with ExxonMobil Gas and Power Marketing, told that cost and environmental factors would drive natural gas and LNG to overtake coal as the world's second preferred power source by 2025, with the 2010 demand level of 215 million t expected to treble to 650 million t by 2040.
Franklin concluded that East African holds great potential, although infrastructure is not yet in place to move gas reserves to market. “It must be built from scratch under regulatory frameworks yet to be implemented,” he said.
Hamad Rashid Al Mohannadi, CEO of Qatar's RasGas, said: "clear and immediate decisions need to be made against an ambiguous backdrop to ensure an adequate supply where and when it is required".
While panelists agreed that the US is likely to become a world leader in shipments of natural gas to the rest of the world, they warned against looking to the US to provide a transferrable gas development model.
Chevron's Breber called circumstances in the US “a fluke”: completely unexpected factors created the situation there [...] You have a lot of infrastructure originally built to import LNG and now it's to export LNG." Breber added that it is unlikely other regions would be able to duplicate those circumstances.
A key challenge, said Peter Coleman, CEO and Managing Director of Australia's Woodside Petroleum, is a mismatch between the lengthy time horizon needed to build supply infrastructure and the relatively short periods of five to ten years during which decisions are made. "We continue to get caught up in these cycles that are too short for the actual investment cycle of our business...we have to keep from being inefficient by over investing in our business cycle." he said.
Adapted from press release by Ted Monroe
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