HomeRegional NewsInternationalNatural gas market to seek flexible solutions

Natural gas market to seek flexible solutions

This is according to a newly released report by EPC firm Black & Veatch, 2017 Strategic Directions: Natural Gas Industry Report.

The report examines how organisations are planning for long-term, sustainable operations that can accommodate rising supplies and deliver them to markets eager to use natural gas as a cheaper and cleaner power generation source.

Natural gas market

The EPC firm explained that key report findings reflect the growing role of the liquefied natural gas (LNG) trade in shifting oversupply from countries like the United States to growing demand centres in Sub-Saharan Africa, Asia, Latin America and India.

“Global LNG activity is impacted by a number of factors including foreign relations, emerging production leaders and available infrastructure,” said Hoe Wai Cheong, President of Black & Veatch’s oil & gas business.

“Some of these issues may be perceived as challenges, but many industry leaders are now keeping a close watch on international events to proactively map out future business opportunities.”

The US-headquartered EPC added: “The report emphasises calls from the industry to fund the infrastructure investments that will be pivotal to accommodating increased LNG imports and exports, including floating LNG (FLNG) applications and natural gas-based combined-cycle plants.”

“Production efficiencies made in recent years have stoked a steady increase in global supply,” said John Chevrette, President of Black & Veatch management consulting.

“However, the ability of emerging markets to absorb this supply, given the lack of terminals, pipelines and other infrastructure, will require collaboration with end users and gas-to-power integration experts.” Read more…

Key report findings

Other key findings include:

  • One of the most dramatic swings from previous years’ surveys is the expectation for sustained lower global crude oil prices between now and 2020. Nearly half of the industry respondents now expect prices to only be between $40 and $50 per barrel. In the 2016 report, merely 7% listed this price range as their expectation. Oil and gas prices have historically been indexed in many markets, signaling a shift in survey respondents’ outlook for the industry.
  • Survey results show that the industry sees building pipelines (32%) and investing in LNG (27%) as the most critical investments for growth.
  • Nearly one-third of respondents (27%) are planning to balance new renewable energy with gas resources.
  • Less than one-third of respondents (32%) are using data to manage risk, with other key management functions like budgeting, strategic planning and daily operations even less reliant on data (30%).
  • Impending final rules from the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) could make business more difficult and increase costs for customers, according to 44% of natural gas storage operators.

The report also analyses how natural gas providers are focusing on finding operational efficiencies, divesting non-core assets and comprehensively strengthening their organisational foundations to remain competitive.

Organisations such as storage operators are also implementing varied strategies to cope with a changing regulatory landscape.

“Those who do not commit to optimising internal processes now, or see the bigger global picture in terms of where the market is headed, risk being unable to capitalise on big opportunities down the road,” added Cheong.


Featured image: Stock

Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.