Nations around the world want to use gas and sell oil, creating an imbalance that forces strong growth in gas production.

Energy users on every continent except Antarctica are looking for additional gas supplies to help them grow their economies with the least environmental impact. The response is a worldwide rush to find, produce and deliver the plentiful but precious commodity.
Often, it's easier to find than to produce and deliver. Huge reserves lie untapped in Russia, China, Alaska, northern and eastern Canada, Venezuela, offshore West Africa, the Middle East and the Pacific Rim.
Existing and anticipated demand are driving gas producers and nations to find those reserves and move them by pipeline, liquefied natural gas (LNG) carrier and gas-to-liquids (GTL) lines and tankers.
Demand
Gas is taking an increasingly dominant role on the world energy stage. According to the "BP Statistical Review of World Energy" for 2001, the world consumed 64.15 billion boe in 2000.
Within that total, oil is clearly dominant at 25.68 billion bbl, followed by coal at 16.02 billion boe and gas at 15.86 billion boe. Gas passed coal on the list this year, and it is gaining on oil.
In more familiar terms, that world gas consumption amounted to 84.72 Tcf, up 4.8% from 1999, compared with a 2.1% increase for all energy and a 1% gain for oil.
Big gainers on the world gas market were Africa (12.8%); Asia-Pacific (7.8%); the Middle East (5.9%); South and Central America (5.6%); and North America (5.1%).
Moving into the future, the US Energy Information Administration reference case predicts a 2.2% annual average growth for all energy use from 1999 to 2020, with oil consumption rising 1.1% a year and gas use increasing 3.2% a year.
Supply
Supplies are available to meet that demand. According to the BP review, the 5,304 Tcf of proved reserves will last the world another 61 years at present use rates.
Those figures don't include resources tied up in stranded gas from conventional sources, coalbed methane and hydrates. It obviously doesn't include emerging, but not yet deliverable, supplies.
Emerging supplies
In North America, those emerging supplies include the North Slope of Alaska with some 35 Tcf of gas discovered and more probable waiting for a planned US $12 billion pipeline that should be completed by the end of this decade. The United States also is counting on the deepwater Gulf of Mexico and the Rocky Mountain region.
The Mackenzie Delta in the Canadian Arctic has another 9 Tcf ready to go in discovered fields and 6 Tcf committed to another pipeline, also scheduled to make deliveries as quickly as 2008. More resources lie offshore Nova Scotia and Newfoundland on Canada's east coast.
In South America, Venezuela has started a development program and created a new gas agency to develop its 146 Tcf in reserves. In another 2 years, the consortium developing the 11 Tcf Camisea field in Peru will start moving gas through the pipeline now under construction.
Norway and Russia supply much of Europe's gas. Norway continues to find big gas fields such as Kristen, Ormen Lange and Snøhvit, but the big bear in this forest is Russia with 40% of world gas reserves. Its offshore Barents Sea Shtokman field, not yet developed, has estimated reserves of more than 100 Tcf.
Algeria is adding new supplies for its second pipeline to Europe.
Europe could get new gas from deepwater Mediterranean and onshore Egyptian supplies that are coming on stream. but that gas is being prepared for a northern Middle East pipeline network and LNG plants.
Africa has tremendous supplies of gas being flared to produce oil from fields offshore Nigeria and Angola. With a pipeline infrastructure, that gas could benefit local economies.
Farther south, Shell's Kudu field offshore Namibia and Forest Oil's Ibhubesi field offshore western South Africa both have potential reserves of more than 1 Tcf of gas.
Like Russia, the Middle East is a treasure house of gas resources waiting for a way to get out. Led by 460 Tcf of discovered gas in Qatar, the countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates plan a pipeline system with plenty of gas left over to export.
Iran has another 812 Tcf of gas looking for a home. It has built a pipeline to Turkey, but Turkey's depressed economy is having trouble finding ways to use the gas.
In the Caspian Sea region, Azerbaijan, Turkmenistan and Kazakhstan have huge supplies of gas and only a few pipelines capable of moving production out through Russia and northern Iran.
Kazakhstan has plans to raise its gas production from 424 Bcf a year in 2000 to 723 Bcf in 2005 and to as much as 1.7 Tcf by 2015. In the near term, much of that gas would come from Karachaganak field near Kazakhstan's border with Russia, but with the development of supergiant Kashagan field in the Caspian Sea, another 35.3 Tcf of extremely sour recoverable reserves should become available.
In some cases, development stumbles over politics. For example, Turkmenistan would like to be the starting point for gas that would move by pipeline across the Caspian Sea to Baku, Azerbaijan, and on to Erzerum, Turkey, but it doesn't want to give Azerbaijan access to the pipeline for its gas from giant Shah Deniz field.
Eastern Russia would like to sell massive supplies of gas with few markets from giant fields such as Kovytka near Irkutsk to China and link with mostly stranded gas supplies in western China's Tarim Basin.
Sinopec claims potential reserves of 704 Bcf of gas in western Chinese fields and is trying to prove up another 988 Bcf. The Chinese West-to-East pipeline is pending, but construction hasn't started.
Construction is ready to get under way at the $12 billion Sakhalin I project, which will deliver gas from Chayvo, Odoptu and Arkutun-Dagi fields with 17 Tcf of gas off the northwest coast of Sakhalin Island, Russia. Shell's Sakhalin II with 14.4 Tcf of gas is ready in the wings.
Southeast Asian nations have huge supplies of gas, with scattered markets and little infrastructure. That may be relieved with the construction of the planned $7 billion Trans-Asean pipeline project.
Entrepreneurs plan to build a pipeline from giant fields on Papua New Guinea to serve the east coast of Australia.
Many fields in Southeast Asia are so remote from markets, however, it makes more sense to turn to LNG or GTL and export the gas to other parts of the world.
LNG/GTL
Without a solid user market at the end of a pipeline, some companies with huge reserves are turning to LNG to find a market for their gas reserves. Many of those companies also are at least looking at GTL technology as a less expensive and more scalable way to sell gas.
LNG is a money-intensive proposition. It takes massive reserves to support an LNG gasification plant, money to build that plant and add conversion trains, still more money to buy the special ships required to transport the LNG and still more money for a regasification terminal at the user end.
Indonesia, already the world's largest LNG exporter, will grow bigger with the addition of the giant Tangguh project on Irian Jayah, supported by 14 Tcf of gas from Wiriager, Berau and Muturi fields. BP plans two LNG plants for the project.
That project will be in a race with the Sakhalin I gas project to support the largest LNG operation in the world.
Operators in Trinidad have built one LNG train, have two more in the immediate planning stages and room to build two more. Operators still are making 1 Tcf gas discoveries offshore Trinidad and Tobago
Venezuela would like to get into that business, too, with offshore gas supplies adjoining those of Trinidad and with gas it produces with its oil. With 146 Tcf of resources, it has the necessary feedstock.
New gas discoveries in the Mediterranean offshore Egypt have started two LNG proposals (one with two trains) and a gas pipeline.
In the Middle East, Qatar may add a fourth LNG train at Ras Laffen.
Nigeria, with one working LNG plant - the $3.8 billion Bonny plant - and two on the drawing board, is talking about expanding its LNG capacity with a fourth train.
Design work also is under way on Nigeria's Escravos GTL plant with participation by Sasol Chevron, Chevron Nigeria and Nigerian National Petroleum Corp. The country wants to avoid flaring the gas produced .
Bolivia represents a typical situation that can lead to an LNG plant. It has no direct access to the Pacific Ocean, but it has giant gas fields. Much of its gas already moves to Brazil by pipeline, but the Brazilian market is limited. Argentina to the south produces enough gas for its own use and also exports to Brazil. Peru, to the west, could use the gas, but it is developing the Camisea field with plenty of reserves for the country's foreseeable needs.
Chile can't use all the gas Bolivia can produce.
The probable solution will be a gas line from Bolivia across the Andes to a port in Chile, where a private company will convert the gas to LNG, transport it to the west coast of Mexico or California, reconvert it to gas and sell it in the United States.
Among majors pushing new technology, Shell is confident enough about the state-of-the-art of GTL technology that it has contracted with Halliburton KBR to build its first commercial-scale plant. It wants to build four more of the plants by 2010.
BP is more hesitant. It is building a pilot GTL plant on Alaska's Kenai Peninsula. If that works, the company will scale up to full size. Phillips Petroleum already has an LNG plant on the peninsula where it converts local gas for sale to Asian markets.
ExxonMobil also has a pilot plant in Louisiana to be ready for the technology when it becomes commercial.
Conoco is more aggressive. During a presentation in Houston, Texas, Paul J. Grimmer, manager of Conoco's Natural Gas Refining Group, said his company sees 1,435 opportunities around the world for GTL plants. Those opportunities include fields larger than 3 Tcf, oil fields with 3 Tcf or larger gas caps for future exploitation, groups of fields that could be combined into a 3 Tcf project and new exploration. That gives the company 1,435 opportunities for plants in 1,200 fields with stranded gas around the world.

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