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Editorial comment

If this year’s World Gas Conference (WGC) were to have been accompanied by a tag line, it would have been ‘Celebrating the Golden Age for Gas.’ This ‘Golden Age’ was frequently referred to, with industry experts maintaining a uniformly positive outlook for the future. Amid forecasts of a huge increase in gas demand, many speakers at the conference pointed out how gas is likely to be at the forefront as the ‘energy of choice’ as global energy demand inexorably grows.


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If energy hungry countries are looking to choose a suitor, gas is well positioned to step in as their Prince Charming: gas is available, clean and an overall safe bet. It has built a reputation on its qualities of stability; gas was there for Japan when the country needed it in the aftermath of Fukushima, and the consensus at the WGC seemed to be that Japan would continue to rely on LNG in the short to medium term at least. With continued rising interest in FLNG and small scale LNG developments, gas has also proved itself to be reassuringly flexible in nature. Small and stranded gas fields will become more readily accessible and commercially viable.

During the WGC, which was held in Kuala Lumpur, Malaysia, Petronas signed an engineering, procurement, construction, installation and commissioning (EPCIC) contract with Technip and Daewoo for the world’s first FLNG facility, which will be moored 180 km offshore Bintulu, Sarawak, Malaysia. The state-run company has also indicated that it will grow its unconventional gas portfolio through its GLNG project in Australia, shared with Santos, Total and Kogas – which aims to convert coalbed methane into LNG. There are a variety of CBM to LNG export projects currently being constructed in Gladstone, Australia. ‘Unconventional’ resources, such as coalbed methane and shale gas, will increasingly become deemed ‘conventional’ as the technologies utilised in harnessing unconventional reserves become more commonplace in the global industry.

However, more easily exploitable reserves mean that more players can get in on the act. Undoubtedly, competition in the LNG sector will become more intense going forward, with suppliers competing for markets in Asia and developers going head to head to exploit reserves. Last year Shell took a final investment decision on its Prelude FLNG project in Australia, which was then set to be the world’s first full-scale LNG project, scheduled for completion in 2017. Now, Petronas’ Malaysian FLNG project, scheduled for completion in 2015, could take the credit for being the first FLNG over the finish line. Shell has, however, insisted that it doesn’t consider itself to be in a ‘race for completion’.

Another of the main topics of conversation at the WGC seemed to be the question of gas’ continued link to the price of oil, and whether it is an outdated mode of pricing. US prices for gas are around US$ 2.5/million Btu while Asian gas prices are around US$ 18/million Btu, and the US, Asian and European gas markets operate largely distinct from each other. There is the possibility that the increase in LNG and shale gas on the market may change the way gas is traded globally. The ‘Golden Age’ of gas will likely have far reaching implications throughout the global energy scene.