Natural Gas Supply Outlook

 Published On: Aug, 2015 |    No of Pages: 70 |  Published By: TBRC | Format: PDF
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This report deals with the supply chain for natural gas, from the production stage, through processing and transportation, to distribution and consumption by industrial and retail customers.

It describes and explains how supply works and its key features in the European, US and Chinese markets.

It then looks at the future for natural gas, under a range of future scenarios covering then next ten years, including an optimistic scenario where increased economic activity has driven up the price of energy, a ‘base’ scenario of activity remaining at recent levels and a negative scenario of low economic activity and energy prices.  In each case it looks at the likely structure of natural gas supply in the different regions.

Shale gas will account for nearly half of total US gas production by 2040. Production volumes will continue to grow because of increased drilling efficiencies and more shale gas fields coming on stream.

The increased production is expected to decrease the country’s dependence on imports from Canada. LNG exports from the US are expected to increase beginning 2016.

Use of natural gas in sectors other than electrical power production is expected to expand in the medium term. The fertilizer and chemical sector industries particularly are expected to start new projects driving long term demand.

Europe is likely to see declining local production and increasing imports from areas such as West Africa the US, Canada and North Africa, resulting in more LNG supply. Thus two thirds of Europe’s natural gas needs are expected to be met by imports by the year 2025. With local production volumes expected to decline, and issues over the security of Russian gas,  LNG imports are projected to approximately double between 2014 and 2020.

Due to the rise in investments in infrastructure, in particular new pipeline projects and the increased use of LNG, gas prices in Europe are likely to increase up to 2020. Prices are expected to stabilise beyond 2020.

Increases in natural gas consumption in Europe will be driven mainly by demand from the residential-commercial and industrial sectors from southern Europe and Turkey in 2015-25.

China’s National Energy Administration (NEA) set the 2020 production target of shale gas at 30 billion cubic meters (1 trillion cubic feet), however TBRC believes much of China’s unconventional gas reserves may prove difficult or impossible to exploit during this time frame.

By 2020, pipelines from Central Asia, Myanmar, Russia and imported liquefied natural gas mainly from Qatar and Australia are expected to play a major role in supplying a large part of China’s gas.

As China tries to wean itself from its use of cheap coal gas is likely to play a larger part in the energy consumption mix. The Chinese government expects to increase natural gas’s share of total energy consumption to around 8% by the end of 2015 and to 10% by 2020. BP plc predicts that China’s natural gas consumption will rise 270% by 2035.
Natural Gas Supply Outlook 2
Introduction 5
Notes on the Scope of the Report 6
Geographical Scope 6
Chronological Scope 7
The Natural Gas Supply Chain 8
The Natural Gas Supply Chain In The North American Market 12
Production 12
Geographies 13
Price 15
Processing 16
Price 17
Shipping 17
Price 23
Distribution 25
Marketing 25
The Natural Gas Supply Chain In The European Market 27
Production 27
Geographies 29
Price 31
Processing 31
Price 32
Shipping 32
Price 35
Distribution 35
Price 36
Marketing 36
The Natural Gas Supply Chain In China 39
Production 39
Processing 42
Shipping 42
Distribution 45
Price 46
Gas Market Scenario Forecasts to 2025 Based on Different Economic Scenarios 48
Natural Gas Supply Chain in the North American Market To 2025 49
North American Natural Gas Supply Chain to 2025 – Medium Economic Scenario 49
North American Natural Gas Supply Chain to 2025 – Positive Economic Scenario 53
North American Natural Gas Supply Chain to 2025 – Negative Economic Scenario 54
Natural Gas Supply Chain in the European Market To 2025 55
Europe Natural Gas Supply Chain to 2025 – Stable Economic Scenario 55
Europe Natural Gas Supply Chain to 2025 – Positive Economic Scenario 58
Europe Natural Gas Supply Chain to 2025 – Negative Economic Scenario 59
Natural Gas Supply Chain in China Market in 2025 60
China Natural Gas Supply Chain to 2025 – Stable Economic Scenario 60
China Natural Gas Supply Chain to 2025 – Positive Economic Scenario 63
China Natural Gas Supply Chain to 2025 – Negative Economic Scenario 63
Appendix 65
Research Methodology 65
Chronological Scope 65
Quantification 65
Terms 65
Abbreviations 65
Currencies 66
Primary Research 66
Research Enquiries 70
The Business Research Company 70

Figure 1: Historical Brent Crude Oil Spot Price($ Per Barrel) 6
Figure 2: Historical Henry Hub Natural Gas Spot Price($ per Million BTU) 6
Figure 3: World Dry Natural Gas Production By Region, Trillion Cubic Feet 1980-2010 9
Figure 4: Gas Supply Chain 9
Figure 5: Natural Gas Processing Plants By Capacity In The US 17
Figure 6: Natural Gas Transmission Path In The US 18
Figure 7: Natural Gas Pipeline Network In The US 19
Figure 8: US Natural Gas Imports, Exports And Net Imports 1996-2014 20
Figure 9: Price Differential Between US Natural Gas Imports And Exports 22
Figure 10: US Import And Export Locations 23
Figure 11: Natural Gas Prices Through The Supply Chain In The US, 2012 24
Figure 12: Natural Gas Distribution Segments 25
Figure 13: LNG Infrastructure And Underground Storage Facilities In Europe 32
Figure 14: Pipeline Network In The Western European Region 34
Figure 15: Europe’s Imports Of Natural Gas By Source 35
Figure 16: Development of European Gas Hubs 36
Figure 17 : Evolution Of Marketed Gas Price By Segment During 2008-12 37
Figure 18 : Proven Geological Reserves In China, 1961-2009 39
Figure 19 : Gas Resources In China 40
Figure 20 : China National Gas Production 2007-2013, tcf 41
Figure 21 : Gas Infrastructure In China 43
Figure 22 : China’s Natural Gas Imports By Source 44
Figure 23 : China Natural Gas Consumption, 2007-2013, tcf 46
Figure 24 : End-Users Gas Prices In Selected Chinese Cities, 2011 47
Figure 25: US Production of Shale Gas Projections To 2025 And Beyond 50
Figure 26 : US Natural Gas Imports and Exports To 2025 And Beyond 51
Figure 27: Expected Growth in Consumption of Natural Gas To 2025 And Beyond 52
Figure 28 : Projected Use of Natural Gas in the US Transportation Sector To 2025 And Beyond 53
Figure 29 : Europe's Natural Gas Supply Sources To 2025 And Beyond 56
Figure 30 : Natural Gas Demand Prospects in Europe To 2025 And Beyond 58
Figure 31 : China's Natural Gas Supply Sources To 2025 And Beyond 61
Figure 32 : Outlook For Natural Gas Supply In China To 2025 And Beyond 62
Figure 33: China’s Natural Gas Consumption Mix To 2025 And Beyond 63

Table 1 : US Proved Reserves And Changes During 2012-13 12
Table 2: Natural Gas Plant Processing During 2010-14 13
Table 3: Number of Gas and Gas Condensate Wells 14
Table 4: Natural Gas Wellhead Price 16
Table 5: Natural Gas Imports And Exports In The US 20
Table 6: US Natural Gas Imports And Exports, A Comparison Between 2013 And 2014 22
Table 7: Natural Gas Prices In The US From 2009 To 2014 24
Table 8 : Price Of Natural Gas Delivered To Residential Consumers In Various US States 26
Table 9: Dry Natural Gas Production In Europe, 2009-2013, bcf 28
Table 10: Dry Natural Gas Consumption In Europe 30
Table 11: Historical Average German Import Price And UK Heren NBP Index 38
Table 12: China National Gas Production 41
Table 13 : Pipeline Tariffs in China 45
Table 14 : China National Gas Consumption 46

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