World gas industry indicators up in 1996

Global Natural Gas Overview [75568 bytes]

World gas production, trade, and consumption continued to grow in 1996, according to the latest estimates by French gas company Cedigaz.

That followed growth in all three gas industry indicators in 1995.

Production

Marketed gas production rose 4.9% to about 2.3 trillion cu m in 1996, with all geographic areas contributing except central Europe, which posted a slight decline (see table). Significantly, the Commonwealth of Independent States (C.I.S.) stemmed its decline in output, with production rising 1.4% to 714.3 billion cu m. Russia accounted for most of the C.I.S. total, with output of 600.3 billion cu m.

In the U.S., gas production reached its highest level since 1981 at 541.4 billion cu m, as severe 1995-96 winter weather pushed prices as high as $2.25/Mcf.

Among European countries belonging to the Organisation for Economic Cooperation and Development, gas production rose by 15.7% from 1995.

Substantial contributions came from Norway, up 34.4% due to the start up of the North Sea's Troll field and the sale of large volumes to European customers.

Trade

Last year brought record international gas trade, Cedigaz reported (see table, preceding page).

Excluding the C.I.S., 429.3 billion cu m was traded worldwide, marking a 10% increase from 1995.

Growth was fueled in part by pipeline imports, which rose 9.3% to 326.88 billion cu m, and in even larger part by expanding liquefied natural gas trade, which accounted for 23.9% of the total and rose 11.3% to 102.43 billion cu m.

LNG trade growth was led by Southeast Asia, where imports grew by 13.2%, with strongest gains in South Korea, up 35.9%, and Japan, up 10%. Correspondingly, exports also jumped, with Malaysia up 36.8% to 17.70 billion cu m. Other big gainers were Indonesia, boosted by exports to Japan, South Korea, and Taiwan, adding a combined total of 71.77 billion cu m to LNG export trade in 1996.

Elsewhere, Australia increased LNG exports to 10.17 billion cu m, with Japan and South Korea as main customers. It also delivered small quantities to western Europe and the Middle East.

France was western Europe's largest LNG importer, lifting 7.58 billion cu m from Algeria. Spain followed with 4.8 billion cu m lifted from Spain and 1.2 billion cu m lifted from Libya.

Trade via gas pipelines was fed by rising Russian deliveries to Europe, up 5.5% overall to 123.9 billion cu m. Central European countries increased their imports by 13.2%, with the biggest gains in Hungary and Romania.

Russian deliveries to OECD Europe grew by only 1.1%. Reduced Russian volumes to France were offset by higher volumes to Germany.

Meanwhile, Russian deliveries to other C.I.S. republics stagnated at about 72.1 billion cu m. Cedigaz estimated that overall intra-C.I.S. trade hovered at about 97 billion cu m.

The start-up of the 858-mile Maghreb-Europe pipeline boosted Algerian exports to Spain and Morocco (OGJ, Nov. 11, 1996, p. 39), while extension of the TransMed pipeline from Algeria led to an 8% rise in gas deliveries into Italy (OGJ, Feb. 10, 1997, p. 34).

Deliveries among European nations saw healthy gains, with Norway leading the pack at a gain of 38.1 billion cu m, up 36.5%, as it supplied 11 buyers on the continent. Another strong gain was the Netherlands' Gasunie, which increased deliveries to European customers by 19% to 45.7 billion cu m.

In North America, high prices slowed growth in Canadian exports to the U.S., which rose only 1.2% to 80.1 billion cu m.

Consumption

Preliminary Cedigaz estimates for worldwide gas consumption showed 4.9% growth to about 2.3 trillion cu m.

This growth came despite a fall in Russian consumption of 0.6% to 337.30 billion cu m.

OECD consumption rose 11.6% to 393.2 billion cu m. Excluding Turkey's growth, OECD demand rose 10%. Cold winter weather and growth in gas-fired power generation boosted OECD demand, with increases for Spain 15%, the U.K. 18%, Germany more than 12%, Belgium's 14.8%, and France 9.2%.

In the U.S., natural gas demand rose by 2.7%, fueled by economic expansion and cold winter weather. In Japan, consumption grew by 9.7%, despite a rise in LNG prices to $3.65/MMBTU from $3.45/MMBTU.