NCDMB targets 100 per cent domiciliation of FPSO integration
The International Energy Association, (IEA), a Paris-based energy think tank, has said that global gas demand is expected to grow by 1.6% a year for the next five years, with consumption reaching almost 4,000 billion cubic meters (bcm) by 2022, up from 3,630 bcm in 2016 in its latest market analysis and five-year forecast on natural gas.
China, the organisation says, will account for 40% of this growth. “Demand from the industrial sector becomes the main engine of gas consumption growth, replacing power generation, where gas is being squeezed by growing renewables and competition from coal.”
Global natural gas market is undergoing a major transformation driven by new supplies coming from the United States to meet growing demand in developing economies and industry surpasses the power sector as the largest source of gas demand growth.
This evolution of the role of natural gas in the global energy mix has far-reaching consequences on energy trade, air quality and carbon emissions, as well as the security of global energy supplies, according to the new report, Gas 2017.
Meanwhile, Nigeria is awakening to this trend as the country’s cabinet last month, approved a national gas policy that aims to reduce its dependence on crude oil by increasing gas exploration and facilities according to the ministry of Petroleum Resources.
The major thrust of the policy is to improve unstable gas supply to the national grid to bring on stream many power plants through better commercialisation of gas. It also aims to separate upstream from midstream operations and to separate gas infrastructure ownership and operations from gas trading.
By dividing the Nigeria Gas Company into separate transport and gas marketing companies and introducing a market-led wholesale gas pricing, after a transitional period, then all the value chain for gas would be fully exploited.
However this forecast by the IEA indicates that the policy needs to be activated with the urgency of now. The United States the world’s largest gas consumer and producer is forecasted to account for 40% of the world’s extra gas production to 2022 due to the remarkable growth in its domestic shale industry.
“By 2022, US production will be 890 bcm, or more than a fifth of global gas output. Production from the Marcellus, one of the world’s largest fields, will increase by 45% between 2016 and 2022, even at current low price levels, as producers increase efficiency and produce more gas with fewer rigs,” says a release by EIA.
While US domestic demand for gas is growing, thanks to higher consumption from the industrial sector, more than half of the production increase will be used for liquefied natural gas (LNG) for export. By 2022, the IEA estimates that the United States will be on course to challenge Australia and Qatar for global leadership among LNG exporters.
“The US shale revolution shows no sign of running out of steam and its effects are now amplified by a second revolution of rising LNG supplies,” said Fatih Birol, the IEA’s Executive Director. “Also, the rising number of LNG consuming countries, from 15 in 2005 to 39 this year, shows that LNG attracts many new customers, especially in the emerging world. However, whether these countries remain long-term consumers or opportunistic buyers will depend on price competition.”
Birol added, “The environmental advantages of natural gas, particularly when replacing coal, also deserve more attention from policy makers.”
US LNG will be a catalyst for change in the international gas market, diversifying supply, challenging traditional business models and suppliers, and transforming global gas security.
Europe could see growing competition between LNG imports and pipeline gas as domestic production declines, creating extra uncertainty on the sources of future supply.
ISAAC ANYAOGU