WPC: Executives discuss benefits of gas-sector globalization

Globalization of the natural gas industry is a positive force that can help bridge the economic chasm between the world�s affluent and poor, says Texaco Inc. Chairman and CEO Peter I. Bijur. Bijur was one of several speakers at a World Petroleum Congress session in Calgary Thursday who predicted rapid globalization of the industry and world economy.


CALGARY�Globalization of the natural gas industry is a positive force that can help bridge the economic chasm between the world�s affluent and poor, says Texaco Inc. Chairman and CEO Peter I. Bijur. Bijur was one of several speakers at a World Petroleum Congress session in Calgary Thursday who predicted rapid globalization of the industry and world economy.

He said globalization is driving change at "light speed," not jet speed. It is not just another business development but equivalent to the movement of tectonic plates, he said.

World gas trade is being integrated, and nations are steadily opening their economies to competition and deregulation.

The Texaco CEO said this globalization can help bring �light and literacy� and an improved quality of life to underdeveloped nations. He said the industry can benefit 1 billion people who live on $4 a day or less and the 2 billion for whom electric light or internet access is a distant dream.

Bijur said globalization of the industry is considered a scourge by some. But it is, in fact, a key driver for economic and social improvement. And, he stressed, it is in the best self-interest of the industry to work with governments and other agencies to ensure that globalization succeeds for all nations.

The benefits of globalization and technology have already lifted hundreds of millions of people out of poverty in the past decade, says Bijur.

Gas market liberalization
The Texaco CEO said he can envision a truly international gas market in the foreseeable future, driven by the same forces that have spurred globalization.

Gas market liberalization is advancing around the world. There are now some massive regional gas markets, such as the European Union, which imports 41% of its gas supplies.

Movements of LNG cargoes are beginning to provide trading links between different regional markets, Bijur noted.

The global promotion of an open gas market is perhaps the single greatest step government and industry can take to achieve significant reductions in carbon emissions in the years ahead, said Bijur. He added that technology is vital to achieving this goal.

Texaco is strategically investing in partnerships and joint ventures to commercialize new technologies such as fuel cells and an ovonic hydrogen storage system that could radically change energy systems. He said the emergence of an economy based on hydrogen, the "ultimate" fuel, is inevitable in time.

Linda Cook, CEO Shell Gas & Power, said there are now international and pancontinental gas networks, and the number of cross-border links continues to increase.

Cook agrees that a driving force for broader gas trade is a growing political trend toward deregulation of markets and trade liberalization. For example, she said, Argentina, Germany, and the United Kingdom are opening their markets to competition.

As one example of potential demand growth, the Shell executive said China�a huge market now dependent on high-carbon coal�is beginning to look at solutions such as gas-fired power plants and is encouraging foreign investment.

On environmental issues, Cook said Shell is firmly committed to meeting and exceeding the emission targets set in the Kyoto protocol.

She also cited new technology as another driver for gas expansion and globalization. Distributed generation networks, fuel cells, and microgenerators could change the face of the power industry, says Cook. She compared that potential change to the switch in computer use from mainframes to personal computers.

Gas-to-liquids technology and stationary hydrogen cells also offer great potential, said Cook. She added that electronic commerce will radically change relationships between suppliers and customers when customers can change suppliers with a mouse click.

Algeria's efforts
Abdelhak Bouhafs, chairman and CEO of Algerian state oil firm Sonatrach, says his company is a traditional player in the gas industry and an important supplier to Europe. It is also pursuing a global strategy in both hydrocarbon development and international partnerships.

The company is pursuing a dual strategy of increasing Algerian gas exports to meet increasing demand and helping supply remote markets from gas sources it will have to discover or acquire outside Algeria.

Bouhafs said Sonatrach is developing new gas export estimates that could reach 20-25 billion cu m/year. He said an additional 15 billion cu m/year of export capacity could be added to two existing pipelines between Algeria and Europe simply by adding compressor stations.

Sonatrach is also looking at other options to increase export transportation capacity with partners, said Bouhafs. The main goal, he said, is to extend Algeria�s effective contribution to the expansion of the world gas industry in the 21st Century.

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