Here is what’s going on in the natural gas industry around the world:
Egypt has long been a leading natural gas exporter across the world, but with economic upheaval at home, the new government of President Mohamed Morsi has announced that they will begin importing gas to meet the country’s needs.
The move is a response to the reduction in output by local companies, who are fearful of potential unrest spreading in the country.
Gas producers including BG Group said it has curbed production even as demand from electricity plants has increased.
That decision by BG has seen the Morsi government look to build a new natural gas import terminal, which they hope will be completed and ready for use by May of next year.
Royal Dutch Shell has said it was looking at ways to boost production and imports into Egypt.
“We are in discussions with many countries in emerging markets about LNG imports at the moment and Egypt is on the list,” Shell Chief Financial Officer Simon Henry said last month. “Egypt’s economy clearly is growing in terms of its demand for energy, and gas is the first fuel.”
The country has also seen the decline in exports of natural gas as a result of over one dozen attacks on the pipeline running to Israel and Jordan.
The last attack on the Sinai pipeline was in July.
The natural gas pipeline is controversial in Egypt as it delivers gas to both Jordan and Israel. Activists have called for the deal with Israel to be canceled, as gas being sold to the country is well below international rates.
The blast happened east of the northern Sinai city of al-Arish, where it breaks into a separate branch for Jordan and Israel.
The 20-year gas deal struck with Israel in 2005 under Mubarak’s reign entails very favorable conditions for Israel. It is highly-contested among Egyptians who see the deal as a selling-off of its natural resources, besides the objection of exporting to Israel as a matter of principle.
On the other hand, Israel is highly dependent on the gas imports from Egypt, which accounts for 43 percent of its gas supplies.
The Sinai has suffered time and again from a fragile security situation, which was aggravated after the police thinned out in the wake of the January 2011 revolution.
Chevron Corporation has planned an investment of $33 billion on exploration and production activities, including major natural gas-related projects in Nigeria and five other countries, as part of the $36.7 billion capital and exploratory investment programme for 2013.
The company said in a recent statement that notable major capital investments in 2013 include developments in Australia, Nigeria, the United States deep-water Gulf of Mexico, Kazakhstan , Angola and the Republic of Congo .
According to the company, planned capital spending also is directed toward improving crude oil and natural gas recovery and reducing natural field declines for existing producing assets throughout the world.
Upstream spending in 2013 for major capital projects includes further development of Nigeria’s Usan and Agbami deepwater fields and construction and plant commissioning of the Escravos gas-to-liquids facility.
The Chairman and Chief Executive Officer of Chevron, Mr. John Watson, stated that consistent with long-stated strategies, the company would be investing in a portfolio of very attractive oil and gas projects that would deliver volume growth and real value to its shareholders.
“Next year’s programme supports several projects currently under construction, including our Australian LNG projects and United States deepwater developments. As these and other projects come online, we anticipate production will reach our 2017 goal of 3.3 million barrels per day. With our strong balance sheet and industry-leading producing margins, I further expect to continue our pattern of significant stockholder distributions,” he said.
Vice Chairman of the company, Mr. George Kirkland, noted that while investment requirements had grown, oil prices, which directly impact the overall revenue stream, had increased by approximately 80 per cent over the same time period.
Canada’s approval for the Chinese acquisition of Alberta oil company Nexen could mean good things for the country’s LNG potential, those in a similar deal said.
Shareholders in Canadian energy company Progress Energy in August approved of the takeover by Malaysia’s state-owned energy company Petronas. Both companies said they expect to complete the transaction Wednesday.
The Canadian government this week gave its approval for the $15 billion takeover energy company Nexen Inc. by China National Offshore Oil Corp.
“(The CNOOC-Nexen) approval by the Canadian government marks an important step in our plans to develop a liquefied natural gas export business,” Progress Energy Chief Executive Officer and President Michael Culbert said in a statement.
Culbert said the new partnership was moving forward with preliminary work on the front-end engineering design work for its Pacific Northwest LNG project. Progress explained a final investment decision is expected in 2014 and first gas is expected in 2018.
Canadian Minister of Industry Christian Paradis had said in a letter to Petronas that he was “not satisfied” the $6 billion bid was in the national interest.
The discovery of vast amounts of shale gas in the United States has already had a big impact on the country’s energy use—prompting a shift away from coal and helping to reduce greenhouse gas emissions (see “A Drop in U.S. CO2 Emissions” and “King Natural Gas”). By some estimates, China has even more shale gas. But it will be difficult for China to access these resources, which are bound up in shale rock, without significant advances in extraction technologies—including the use of powerful computer simulations of the physical properties of shale deposits.
China has set itself an ambitious goal of obtaining 60 billion cubic meters of shale gas by 2020, enough to produce about 6 percent of all of its energy, up from almost none today. But China faces a number of challenges in developing these resources. Most of the gas is found in arid areas, and the current approach for freeing the gas—hydraulic fracturing—requires a lot of water. What’s more, the geology is different in China than in the United States, which could make hydraulic fracturing more difficult.
“China has a lot of natural gas in shale,” says Julio Friedmann, chief energy technologist at the Lawrence Livermore National Laboratory. “But we don’t know how much of that gas they can produce, and what’s necessary to get it out of the ground; we don’t know how much it will cost to produce.”
New fracking techniques could help. For example, ways to reduce water consumption are being developed in the United States, where some of the shale gas is in dry areas, such as parts of Texas. New water treatment methods are making it possible to recycle more water (see “Can Fracking Be Cleaned Up?”). In the future, extremely fine particles that flow “like ball bearings” might replace much of the water used now, says Franz-Josef Ulm, a civil and environmental engineering professor at MIT. The particles could be pumped into a shale deposit under pressure to fracture the shale, along with just a small amount of liquid.