Gas, a "Clean", Efficient, Energy Option

The issue of monetizing gas resources is becoming increasingly crucial for producing nations and oil and gas operators alike. Natural gas owes its growing appeal to its numerous advantages:

• It is a clean-burning fuel whose combustion generates no unburned residues, particulates or soot, and releases less greenhouse gas than the other fossil fuels.
• Its high calorific value allows latest-generation power plants to achieve high energy efficiency using cogeneration or combined cycle configurations, limiting both energy consumption and atmospheric emissions. On the strength of these advantages, the share of gas in power generation should rise from 20% in 2004 to nearly 25% in 2030.

Liquefaction, the Key to New Opportunities

One of the main reasons for the emergence of the LNG sector is that it makes transporting gas over long distances both technically and economically feasible. This spells opportunity for both gas-producing and gas-consuming countries:

• Exporting LNG by methane carrier means that huge reserves of gas located far from major consumer zones can be tapped. Liquefaction creates new market opportunities, generating revenues that stimulate the economies of producing nations. In addition, liquefaction often contributes to the reduction of gas flaring associated with crude oil production, thus limiting greenhouse gas emissions.
• The LNG value chain not only promotes the use of an energy source with a smaller environmental footprint than other fossil resources, it also addresses the concerns of consumer nations regarding their diversity of supply while reducing their energy dependence on the countries that supply gas via pipeline.
• Unlike piped natural gas, a cargo of LNG can be diverted en route. This promotes the flexibility that consumer nations need to manage their supply, and enables producing nations to optimize the monetization of their assets. This flexibility has been spurred by the increase in short-term LNG trading tied to market deregulation.
• That same flexibility is proving an advantage for some countries such as Brazil, which are counting on the forthcoming growth of this sector in an offshore context. Transporting the gas by LNG carrier on a regional (as opposed to a transoceanic) scale offers an alternative to the challenging and costly development of pipeline systems.

The Advantages of the Liquefied Natural Gas Value Chain

Presence at Every Link in the Chain: Sales

Most LNG is sold under long-term sales purchase agreements between liquefaction plants and gas marketers and/or power generators. Signing these contracts is a vital prerequisite to building liquefaction facilities, because they determine the economic viability of the plant – an investment of several billion dollars. LNG trading also takes advantage of the spot and short-term markets, which emerged about a decade ago in conjunction with gas market deregulation in Europe and growth in LNG production and transport capacity. These fast-growing trading opportunities provide an increasing degree of flexibility to market players