members serve 97% of world’s as market · members serve 97% of world’s as market founded in...

Members Serve 97% of World’s Gas Market

91 Charter Members

56 Associate Members

Founded in 1931

IGU Secretariat

Oslo, Norway

Presidency 2015-2018

Washington, DC USA

A Compelling Vision

“As the global voice of gas, IGU seeks to

improve quality of life by advancing gas as a

key contributor to a sustainable energy future”

www.igu.org

World Gas Conference 2015 a Big Success! Next WGC is Washington, DC in June 2018

3700

COUNTRIES REPRESENTED 90

113 570

What’s Ahead For the Global Gas Industry

NORTH AMERICA

EUROPE & CIS

ASIA

SOUTH AMERICA

Exploit shale resources for positive economic and environmental benefits, continue to earn social license, secure export approvals Decarbonization, integration of gas with renewables, diversify supply sources, security of demand Develop gas resources, indigenous and imports, at affordable prices to fuel growing economies and clean the air Develop plentiful resources, encourage trade, improve regional connectivity, regulatory reform and improve investment climate

USA Triennium Areas of Strategic Importance

COP 21 Paris Positioning Natural Gas as a Solution

• Gas industry supports efforts toward a sustainable future

• Gas and renewables a powerful combination

• Must consider all factors -- sustainability, economic, social and environmental

• Difficult to fuel global economic growth while phasing out fossil energy

“Gas provides the fastest and most economic pathway to a world with both lower carbon intensity and cleaner air”

Making an Impact at COP 21

• Invitation only event on Saturday, 5 December in Paris

• Panel discussion on air quality led by Professor Jason Bordoff of Columbia University

• Media outreach to key publications

• IGU presence throughout event

ihs.com

© 2015 IHS

Presentation

IHS ENERGY

Global Gas: Awash in Supply IGU Global Ambassadors Luncheon

12 November 2015

Mary Lashley Barcella, Director, North American Gas, [email protected]

mailto:[email protected]

© 2015 IHS

Overview

• Abundant global gas supplies are putting pressure on prices, costs,

contract terms, spurring a move to flexible pricing and spot

transactions.

• The global supply surplus stems partly from surplus conditions in North

America where the resource base continues to expand and costs are

dropping.

• Abundant global gas supplies can play an important role in reducing

GHG emissions.

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IGU Global Ambassadors Luncheon

© 2015 IHS 10

Global LNG: Signs point toward a looser market


© 2015 IHS

Global gas snapshot 2015

11

Key regional trends shaping the LNG market

© 2015 IHS

LNG import

growth, but strong

coal competition

“Residual market”

for LNG

Henry Hub–based LNG

exports lead post-

Australian wave

LNG imports

for power

Growing LNG

dependence Supply surge

hitting the market

Nuclear policy

uncertainty

East Africa

stuck on

starting blocks

Russia’s drive for LNG

and pivot East Canadian LNG

stuck on starting

blocks

Gas long

Gas short


© 2015 IHS

LNG supply potential greatly exceeds likely demand

• More than 1 billion tons of new LNG supply has been proposed, of

which nearly 700 million tons would be located in the US and Canada.

140 million tons is currently under construction worldwide.

• Global demand for LNG was approximately 250 million tons in 2014.

IHS Energy expects demand to grow by 166 million tons by 2025.

• In order to meet global demand growth and replace retiring LNG

capacity, about 215 million tons of new capacity will be needed by

2025. 140 million tons is currently under construction, leaving only 75

million tons needed to be built by 2025.

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© 2015 IHS

North American gas supply is plentiful and low cost

• A 2010 IHS study of 17 unconventional gas plays estimated that

those plays contained 1800 Tcf of recoverable gas resources, of

which 900 Tcf could be produced at a breakeven price of $4 or

less.

• The total North American resource base was estimated at over

3400 Tcf.

• A forthcoming update (to be published in 2016) is expected to

estimate a larger resource base and lower costs.

• A recent West Virginia University study points to 782 Tcf of

technically recoverable gas resources in the Utica play, which

was not included in the 2010 IHS study.

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© 2015 IHS

Productivity is growing and costs are declining

• Most production growth in North America is expected to come from the

Marcellus and Utica plays in Appalachia.

• Technological advances have resulted in great increases in productivity

in natural gas development. Initial production rates from gas wells in

the Marcellus play have risen to more than 7 MMcf/d in the past two

years. One well in the Utica play was reported to have an initial

production rate of more than 70 MMcf/d.

• Gas rig counts have declined below 200 in the US Lower 48 (from more

than 1,400 in 2008) but production continues to grow.

• Breakeven costs of new supply have declined as fewer rigs drill more

wells, wells produce more gas, and service companies reduce costs.

• Lower costs and abundant supply are expected to keep Henry Hub gas

prices below $4/MMBtu for most of the next decade.

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© 2015 IHS

Summary

• More than 100 new Intended Nationally Determined

Contributions (INDCs) have now been submitted from nations

accounting for 87% of global GHG emissions.

• IHS estimates that INDCs would reduce annual emissions by

about 10 GtCO2e in 2030 (versus business-as-usual (BAU)

projections). Another 15-17 GtCO2e of reductions would be

required to limit global warming to 2 degrees Celsius.

• Energy transitions consistent with a 2 degree Celsius scenario

are compatible with substantial increase in global gas

consumption over the next 15 years.

• IHS Energy expects the Paris Climate Conference to deliver a

new agreement based on INDCs.

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IHSTM ENERGY

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members serve 97% of world’s as market · members serve 97% of world’s as market founded in...

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