Earlier this month, I had the opportunity—along with the Houston chapter of the International Association for Energy Economics—to plan a half-day conference that focused on the changes taking place in the North American natural gas market.
One of the points raised at the conference was that the gas market is becoming increasingly global, driven by the decline in gas reserves in North America.
Some gas demand will have to be satisfied by an increase in LNG exports to the region. In response, large-scale projects are being announced that will bring production from areas with massive gas reserves to this market.
Bringing gas to market
For example, Qatar Petroleum (QP) signed separate agreements in October with ExxonMobil Corp. and Qatar Shell GTL, a unit of Royal Dutch/Shell Group, that would result in the world's largest gas-to-liquids project as well as further expansion of LNG export capacity in the Persian Gulf nation (OGJ, Oct. 27, 2003, p. 8).
The LNG exports would be shipped to a regasification terminal in the US at a location yet to be determined. Both projects in Qatar center on new development and processing of gas from its North field, the world's largest offshore, nonassociated gas field.
QP's agreement with Qatar Shell calls for the development of a block in North field to produce 1.6 bcfd of gas over the life of the project and to construct at Ras Laffan what would be the world's largest GTL plant.
QP also signed an agreement to supply ExxonMobil with more than 15 million tonnes/year of LNG to be delivered to the US over 25 years.
These are just a couple of examples of plans for this country's vast gas resources. Other GTL projects and pipeline additions have been planned for Qatari gas as well.
The OGJ worldwide report of proved reserves, which begins on p. 43, shows that Qatar's gas reserves stand at an estimated 910 tcf.
OGJ estimates that 2002 gas production in Qatar totaled 783.7 bcf (OGJ, Mar. 10, 2003, p. 70).
At that rate of production, Qatar's gas reserves life is 1,161 years. Gas production in Qatar will increase in the near term, however, lowering this figure substantially.
Other countries in the Middle East also have high reserves-to-production ratios. Qatar's gas reserves life is second only to Iraq's.
During 2002, gas production in Iraq is estimated at 70.4 bcf. At such a relatively low production rate, the reserves life for Iraq is calculated at 1,562 years.
Calculated using production of 1.56 tcf for 2002, Iran's current gas reserves would last another 602 years.
Saudi Arabia last year produced 1.5 tcf of gas but has smaller reserves than Iran, leaving its gas reserves life at 154 years.
Western Hemisphere
With its large reserves in the Cami- sea gas fields, Peru has a gas reserves life of almost 560 years at its 2002 rate of production and reserves of 8.7 tcf.
Peru's total gas production last year was 15.6 bcf. For the first 10 months of this year, Peru's rate of gas output has not changed, totaling 13.9 bcf.
Production of gas in Peru will soon ramp up, however, with some new projects on the horizon.
In one such project to exploit these gas reserves, Peru LNG SRL, led by Dallas-based Hunt Oil Co. and South Korea's SK Corp., has agreed to sell 400 MMcfd of Camisea gas to Belgium's Tractebel Electricity & Gas International beginning in late 2007 or early 2008.
Peru LNG plans to construct a liquefaction plant south of Lima with an initial capacity of 4.4 million tonnes/year of LNG—about 600 MMcfd of natural gas.
Later, the company plans to develop additional wells, pipelines, and other facilities. Tractebel will ship the LNG from the plant and regasify it in Mexico (OGJ, Oct. 13, 2003, p. 8).
Other South American countries have shorter reserves lives than Peru. Venezuela's gas reserves will last 170 more years with the current rate of production based on its reserves as of Jan. 1, 2004.
Meanwhile, the reserves life is 113 years for Bolivia's gas and 30 years for Brazil's.
The North American countries' gas reserves lives are nearly identical. The US and Mexico each have an R-P ratio of 9 years. Canada, with its steep production decline rates, now has a gas reserves life of just 8 years.
