Cedigaz: Global gas trade in 2012 shows mixed trends

Global marketed natural gas production and “apparent” consumption in 2012 grew slowly, according to a new report from Cedigaz, the international natural gas association based near Paris.

In an environment characterized by a “turbulent economic climate, ongoing geopolitical tensions, and security issues in Arab countries,” consumption grew by only 2.2% to 3,348.7 billion cu m (bcm), said the report published last month.

That growth falls short of 2011’s (2.8%) and is lower than the last 10-year average—2.7%/year. Among major producers, North America reinforced its leadership as producer and consumer, while the CIS was the only area showing a production decrease (-1%).

At the national level, the largest production gains were in the US, Norway, China, Australia, Saudi Arabia, Turkmenistan, Nigeria, and Libya. This last was, said the report, an effect of the postwar recovery.

A slowdown in international gas trade—to 1,015 bcm (-0.8%) over 2011—marked 2012. International LNG trade accounted for most of that decrease.

Many producing countries experienced supply constraints and growing competition between domestic needs and exports, which contributed to much of the 2.2% decline in global LNG supply. International pipeline trade dipped marginally in 2012 to an estimated volume of 701.5 bcm.

Whereas intraregional pipeline flows expanded, said the report, interregional pipeline trade dominated by Russian gas deliveries to Europe dropped sharply, by 3.8%. This decline was mainly caused by the pullback in gas activity in Europe and the Commonwealth of Independent States (CIS), which together concentrate the largest part of international gas flows.

Three major developments, however, continued to push up worldwide natural gas consumption in 2012: the impact on gas demand of the Fukushima nuclear disaster in Japan, the long-term dynamic of emerging countries, and the boom of US unconventional gas that bolsters gas competitiveness.

While consumption is estimated up 2.1% among countries that comprise the Organization for Economic Cooperation and Development, under the impetus of the US (+4.4%) and Japan (+11%), southern emerging areas continued to display “buoyant” gas expansion (+5.5%), said the Cedigaz report.

By contrast, CIS consumption decreased sharply by almost 2%. European Union gas consumption continued its decline for the second consecutive year (-3%), although more slowly than in 2011 (-8%).

The contrasted dynamics among the three major global markets—North America, Europe, and Asia Oceania—became even more apparent in 2012, said the report, as illustrated by the “growing divergence of natural gas prices around the globe.”

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