Natural Gas : Information and Updates
February, 2013
Alaya Legal introduces its Natural Gas: Information and Updates, with a view to present in a systematic, organized and comprehensive manner the developments in the natural gas segment across the globe and the Republic of India.
The publication is intended to serve as a canvas for understanding various legal developments in this segment.
Introduction
Natural gas is a natural reserve found all around the world and is extracted in most countries.
Today, a country’s revenues and gross domestic product (GDP) heavily depend upon natural gas reserves and production.
Countries across the globe have been grouped into categories depending on the quantum of proven natural gas reserves present in such countries.
The endeavour is to cover developments in “very high concentration areas” and major developments in all other areas. Developments in the Republic of India are covered separately.
Zoning
The map represents the global scenario of proven natural gas reserves.
Natural gas reserves in the world have been divided into the following categories:
- Very High Concentration – above 100,000,000,000 cu-m
- High Concentration – above 10,000,000,000 cu-m
- Medium Concentration – above 1,000,000,000 cu-m
- Low Concentration – 0 – 1,000,000 cu-m
Very High Concentration Areas are:
- Canada
- Qatar
- USA
- Russia
- Norway
- Iran
The picture remains incomplete without a mention of reserve holders of shale gas basins.
Global Scenario
Statistics
Canada
Canada is the world’s third-largest producer of dry natural gas and the source of most U.S. natural gas imports.
Canada ranks:
- Third in dry natural gas production
- Fourth-largest exporter of natural gas after Russia, Norway and Qatar
All Canadian natural gas exports are presently supplied to U.S. markets through pipelines.
Estimated production stood at 160.1 billion cu-m while consumption stood at 103.3 billion cu-m.
Qatar
Qatar holds the world’s third-largest natural gas reserves and is the largest supplier of liquefied natural gas (LNG).
Qatar’s proven reserves stood at approximately 896 trillion cubic feet (Tcf) as of January 01, 2012.
Qatar possesses nearly 14% of total world natural gas reserves.
USA
Proved reserves of U.S. oil and natural gas in 2010 rose by the highest amounts ever recorded since reserve estimates began in 1977.
The growth was primarily driven by:
- Horizontal drilling
- Hydraulic fracturing
- Shale gas developments
Estimated gas production in 2011 stood at 651.3 billion cu-m while consumption was 689.9 billion cu-m.
Russia
Russia holds the largest natural gas reserves in the world and is the largest producer and exporter of dry natural gas.
Russia exports significant quantities of natural gas to:
- European Union nations
- Turkey
- Japan
- Asian countries
- CIS nations
Norway
Norway is the second-largest exporter of natural gas after Russia and ranks fourth in global production.
Norway possessed 71 trillion cubic feet (Tcf) of proven reserves as of January 2012.
Norway exported approximately 96% of production through pipelines and LNG shipments.
Iran
Iran ranks amongst the world’s top holders of both oil and natural gas reserves.
Iran possesses the world’s second-largest natural gas reserves after Russia.
Natural gas accounts for approximately 54% of Iran’s domestic energy consumption.
Major gas fields include:
- South Pars
- North Pars
- Kish
- Kangan-Nar
Iran produced approximately 5.2 Tcf of dry natural gas in 2010 and consumed approximately 5.1 Tcf.
Market Update
Canada Natural Gas Imports Increase, US Imports Decrease
Canadian natural gas has historically been the primary source of natural gas imports into the United States.
However, since 2001 imports from Canada into the U.S. have steadily declined.
Key reasons include:
- Increasing shale gas production in the United States
- High underground storage levels
- Rising domestic U.S. production
Net imports from Canada fell approximately 7% during the first eight months of 2012.
U.S. exports to Canada have simultaneously increased significantly since 2000.
USA – Net Exporter of Natural Gas by 2020
The U.S. Energy Information Administration released the Annual Energy Outlook 2013 (AEO2013).
According to AEO2013:
- Shale gas production will continue to increase
- LNG exports are expected to begin in 2016
- The United States is expected to become a net exporter of natural gas by 2020
- The U.S. is projected to become a net pipeline exporter by 2021
Russia’s Gazprom $4 Billion Refund to European Clients
Gazprom announced refunds amounting to approximately USD 4 billion to European customers.
The European Commission initiated investigations relating to:
- Anti-competitive behaviour
- Gas pricing linked to oil prices
- Restrictions on free flow of gas across EU
Norway Statoil and Germany Wintershall Supply Deal
Norway’s Statoil entered into a ten-year supply agreement with Germany’s Wintershall beginning January 01, 2013.
The agreement covers approximately 45 billion cubic metres (bcm) of natural gas.
Iran to Earn $400 Billion from Gas Fields
Iran announced that the South Pars and related gas fields could generate annual revenues of approximately USD 400 billion after project completion.
Iran Gas Production Reaches 120 bn Cubic Tons
Iran’s natural gas production in 2012 reached approximately 120 billion cubic tons.
Iran possesses:
- 137.6 billion barrels of proven oil reserves
- 29.61 trillion cubic metres of proven gas reserves
Qatar Exports Rise
International Monetary Fund reports indicate substantial growth in natural gas exports from Qatar.
Natural gas exports exceed crude oil exports in:
- Qatar
- Algeria
- Yemen
Bulgaria to Import Gas from Europe by 2014
Bulgaria planned natural gas interconnectors with Serbia and Hungary to diversify gas supply sources.
Ukraine Moves Closer to Shale Gas Deal with Shell
Ukraine moved closer to a production sharing agreement with Royal Dutch Shell relating to shale gas reserves estimated at 42 trillion cubic feet.
Nord Stream to Increase Gazprom Export Costs
Gazprom’s plans to transfer gas shipments from Ukraine to Nord Stream significantly increased export transportation costs.
Republic of India
Statistics
India possessed approximately 38 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2011.
India produced approximately:
- 46.1 billion cu-m of natural gas in 2011
- 1.8 Tcf in 2010
Consumption stood at approximately 61.1 billion cu-m.
Market Updates
Production Sharing Contracts Signed under NELP-IX
Under the Ninth Round of the New Exploration Licensing Policy (NELP-IX), the Government of India signed 13 production sharing contracts on March 28, 2012.
The contracts covered:
- 2 shallow water blocks
- 11 onshore blocks
The blocks were spread across:
- Assam
- Gujarat
- Madhya Pradesh
- Rajasthan
RIL Advocates Market-Driven Gas Pricing
Reliance Industries Limited stated that large gas reserves require prices above USD 10 per million British thermal units for commercial development.
RIL advocated market-driven pricing mechanisms for future oil and gas exploration.
India Shale Policy
The Ministry of Petroleum and Natural Gas announced that India’s shale gas exploration policy favouring market-determined pricing was under discussion.
The Government identified six basins for shale gas exploration:
- Cambay
- Assam-Arakan
- Gondwana
- KG Onshore
- Cauvery Onshore
- Indo-Gangetic Basin
New Gas Findings
Malaysia
Petronas discovered two major gas reserves in Kuang North and Tukau Tamar gas fields estimated to contain over 4 trillion cubic feet.
Saudi Arabia
Saudi Arabia announced discovery of a gas field in the Red Sea near Dhuba Port in Tabuk region.
Gas from the Tabuk region will be supplied through dedicated pipelines and infrastructure.
Bangladesh
Bangladesh discovered approximately 1 trillion cubic feet (TCF) of additional natural gas reserves in the Titas Gas Field.
The discovery is expected to improve domestic supply and support economic growth.
Sources
- Norwegian Petroleum Directorate
- U.S. Energy Information Administration
- International Energy Agency
- Directorate General of Hydrocarbons, India
- Natural Gas Asia & Europe
- Energy 365
- National Iranian Gas Company
- Economic Times
Did You Know?
If all the natural gas pipelines in the U.S. were connected to each other, they would stretch to and from the moon almost three times.
Disclaimer
