Natural Gas on the Energy Market in 2006
An overview of the global situation
In 2007 the development of international oil markets were again influenced by important factors and the demand continuingly increased last year, too. The raw material demand of China and India emerging dynamically in the past decade further increased similarly to the trends of former years, and a similar increase could also be witnessed in the event of Brazil and the USA.
Experts forecast USD 50-60 per barrel crude oil price for 2007. However, due to the increased demands and the weakening of the American currency the crude oil price set a new record on the international markets. In 2007 the price of the North Sea Brent quality crude oil reached the psychological limit of USD 100 per barrel and broke the record of USD 65 per barrel of the former years – which was already regarded as a record price formerly. Last year’s average crude oil price fluctuated around USD 74/barrel and prices rose further during the first half of 2008.
2 948 billion cubic metres of natural gas – the equivalent of more than 2 600 billion tons of crude oil – was produced and consumed in the world in 2007. This meant a 2.4 percent increase compared to the figures of the previous year. Production increased in each region except for Europe, where a 6.4 percent decrease could be witnessed last year. Approximately 30 percent of the produced natural gas quantity – i.e. approximately 860 billion cubic metres – was traded across borders of the producing countries. So the quantity of the exported natural gas is 40 billion cubic metres more than that of last year’s. The focus of this international trade was still mainly the regions in Europe, North America or Far East/Pacific Rim, however, the new tendency of interregional trade increased further in 2007. Interregional trade accounted for roughly forty percent of cross-border natural gas trade last year.
Pipeline deliveries in 2007 amounted to 609 billion cubic metres, while the quantity of the previous year constituted about 590 billion cubic metres. The quantity of the delivered liquefied natural gas (LNG: Liquefied Natural Gas) was 251 billion cubic metres in 2007, some 7 percent higher than in the previous year.
Russia remained the largest gas exporter, delivering closely one fourth of the total natural gas quantity in 2007. This was followed by Canada, (13 %), Norway (9 %) and several other countries. Amongst the importing countries the USA was the first (nearly with 16 %), followed by Germany and Japan, (11 % each), then by Italy (8 %) and France (6%).
Natural gas consumption
The world’s natural gas consumption increased by an average 3.1 percent in 2007. This increase solely originates in the increase in the USA’s natural gas consumption. Last year the USA’s natural gas consumption rose by 6.5 percent due to the uncommonly cold winter and the increased natural gas demand of the power stations.
Natural gas production
The world’s natural gas production showed a 2.4 percent increase last year. Similarly to the increase in consumption, the USA also played a significant role here: exploitation increased by 4.3 percent at the annual level, making the most significant production increase in the USA’s natural gas industry since 1984. The volume of production decreased by 6.4 percent in Europe; the most spectacularly in the UK. It is already the second year that a significant decrease of exploitation could be witnessed here, reaching 9 percent again in 2007.
Natural gas reserves
Proved recoverable natural gas reserves in the world were estimated at about 177 000 billion cubic metres at the end of 2007, and this estimates were slightly higher than one year before.
58 percent of the proved recoverable natural gas reserves are owned by three countries having by far the largest reserves, namely Russia (25 %) Iran (16%) and Qatar 14 %. Europe’s share is still only about 3 percent. Last year experts estimated the proved recoverable natural gas reserves of Russia to 44 600 billion cubic metres.