Natural Gas
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[edit] Natural Gas
Liquid Natural Gas also known as LNG is widely used for cooking, industrial and electricity generation purposes. In recent years LNG has witnessed a widespread rise in imports – largely due to steep rises in the price of natural gas. However that doesn’t stop this ubiquitous form of natural gas from being used widely.
[edit] General uses
The world consumption rose 2.4 percent in 2006, slowing from a rise of 3.2 percent in 2005 [1]. Japan remained the world's largest LNG importer in 2007, at 65.7 million tonnes of LNG, up 5.7% over 2006. South Korea remained the world's second largest LNG importer at 25.6 million tonnes, up 1.2% over 2006. Taiwan's LNG imports were up 6.8% over 2006, Pan EurAsian reported, and China appeared in the reckoning—with imports of 2.9 million tonnes, up from less than 10% of that amount in 2006. [2]. Over the last 20 years, the total consumption of LNG has increased by around 2.6%. Asian demand for LNG imports, including from source countries in the Middle East, has been strong through 2006. It is estimated that LNG imports to the region for the year increased approximately 10 percent to just under than 4,900 bcf.[3].
[edit] Pricing structure
Natural-gas prices have climbed nearly 50% since 2007's third quarter, closing yesterday at US$8.09 per million British thermal units on NYMEX, up US11.2¢.[4] For much of 2006, however, US and UK gas prices decoupled from oil prices, which soared to record highs. [5]
[edit] Current consumption trends
Initial estimates for first-half 2007 show global LNG demand at 8 6 million tonnes, a 6.3 million tonne, or 8%, increase compared to the first half of 2006. Deliveries to the Asia-Pacific region increased by 2.5 million tonnes (10.5%) in second-quarter 2007 as compared to the same period a year earlier, reaching nearly 5 million tonnes by the end of June 2007. European LNG demand continued to collapse, falling nearly 12% in the second quarter, with cargoes making their way to the US instead, leading to a record high level of LNG imports to the Americas, up 64.1 % in the first half of 2007. [6]
[edit] Price forecasts
A leading Investment banker has lowered 2008 and 2009 composite spot natural gas forecasts to $7.25/MMbtu and $7.60/MMbtu, respectively, from $8/MMbtu and $8.25/MMbtu, respectively. These downward revisions are based on the following:
- Stronger-than-expected US gas production growth [an estimated 2.5% in 2008], primarily from increased production from the Barnett Shale in Texas.
- US gas storage volumes that are well above historical levels (surplus of 167 bcf vs. 5-yr average).
- Warmer-than-normal weather this winter, coupled with a positive spring outlook for hydroelectric production.
- A slowdown in US economic growth (UBS senior economist Maury Harris has reduced his 2008 GDP growth forecast to 2%, from 2.4%, in November).
[edit] Major producers
Qatar, the biggest exporter of liquefied natural gas (LNG) in the Middle East, now leads the world in LNG exports. It outpaced its rivals, Malaysia and Indonesia, in the LNG export race in 2006. Qatar was responsible for 15% of the world's LNG exports in 2006. This is expected to be further enhanced as part of an ongoing expansion programme that seeks to raise the LNG capacity to 77 million tons per annum (Mta) by 2010. Qatar is currently producing 30 Mta. [8].
[edit] China’s recent rise
LNG imports by China are expected to increase to 12 billion cubic meters from a not considerable amount recorded in 2005. India is expected to increase its imports by 179% to 16.9 billion cubic meters. While Japan and South Korea dominate LNG imports, accounting for over 56.5% of global LNG trade, in Europe and North America, domestic natural gas production cannot keep up with demand.[9] However; these are not adequate when compared to other energy resources. Also the network of pipelines is constructed in such a manner so as to serve only regional requirements.
[edit] External References
- ↑ http://www.chinadaily.com.cn/china/2007-07/03/content_908631.htm
- ↑ http://www.ogj.com/display_article/319266/7/ONART/none/Trasp/1/Japan,-South-Korea-retain-global-LNG-import-lead/
- ↑ http://www.eia.doe.gov/emeu/steo/pub/pdf/LNG_Jan2007.pdf
- ↑ http://www.financialpost.com/analysis/columnists/story.html?id=3ab52c65-0377-403f-b5f4-f9ecba1b704c&k=8085
- ↑ http://www.pwc.com/Extweb/pwcpublications.nsf/docid/E6E463F7DC8CD969852572CE00173AA2/$File/pe_fundamentals-LNG-2007.pdf
- ↑ http://www.redorbit.com/news/business/1218919/sluggish_european_demand_relaxes_firsthalf_2007_lng/index.html
- ↑ http://www.pennenergy.com/display_article/317566/7/PRARC/none/GenIn/1/MARKET-WATCH:-Crude-futures-price-closes-at-5-week-low/
- ↑ http://www.arabianbusiness.com/495237-qatar-at-top-of-the-lng-table-
- ↑ http://www.abareconomics.com/publications_html/trade/trade_03/natural_gas.pdf
