Current Status of LNG Reposted

Thread Content

Current Status of LNG The development of oil production since 1849 has generally gone through four stages. From 1859 to 1920, the main product of oil was kerosene, and the world’s total oil production increased to 100 million tons. From 1920 to 1950, gasoline became the main petroleum product; oil consumption grew rapidly, and oil production also increased swiftly, exceeding 500 million tons. The period from 1950 to 1980 was an era of rapid growth for the world’s oil industry. Many large and even extremely large oil fields have been discovered in the Middle East, Russia, and other regions. After World War II, the rapid development of the world economy led to a sharp increase in oil production, rising from 500 million tons per year to 3 billion tons per year. After 1980, world oil production experienced three fluctuations, with a general trend of low growth. Global oil production in 2006 was 3.914 billion tons. 　　In 2006, the world’s remaining recoverable oil reserves amounted to 180.47 billion tons, but they were distributed very unevenly. Of this, the Middle East accounts for 101.26 billion tons, accounting for 56%. There are **93 countries in the world that possess oil reserves**, but only **6 of them have reserves of over 10 billion tons** – Saudi Arabia, Canada, Iran, Iraq, the UAE, and Venezuela. The total recoverable reserves of these 6 countries amount to 118.9 billion tons, accounting for 2/3 of the world’s total. Of these, Saudi Arabia has 35.59 billion tons, and when half of the neutral zone’s amount is added to this, the total comes to 35.93 billion tons, far exceeding that of the other countries. In Canada, the cost of extracting oil sands has dropped below $25 per ton; not only is the technology mature, but it is also economically viable, which transforms the abundant oil sand resources into practically exploitable reserves. As a result, Canada now ranks second in terms of reserve volume, with 24.55 billion tons. 　　In 2006, the distribution of world oil production was also highly uneven. The Middle East produced 1.13 billion tons, accounting for 28.9% of the world’s total production. There are 12 plants with an annual production of over 100 million tons; their combined output amounts to more than 2.3 billion tons, accounting for 58.8% of the world’s total. Among them, Saudi Arabia and Russia have an annual production of over 400 million tons, at 514.6 million tons and 480 million tons respectively. The United States, which accounted for 60% of the world’s oil production before the 1960s, saw its output decline and dropped to 312 million tons. The other countries with over 100 million tons are: Iran (210 million tons), China (184 million tons), Mexico, Venezuela, Canada, the UAE, Kuwait, Norway, and Nigeria. 　　Over the past 10 years, global oil production has averaged an annual growth rate of 2%. The reserves and production of the major oil-producing countries in the Middle East remain relatively stable. They have ample reserves as a foundation and great potential, but the older oil fields with high production levels have begun to decline, and new production capacity must be introduced to make up for it. In the short term, without the discovery and commissioning of large oil fields, it will be difficult to achieve significant increases in production. With oil prices currently high, they are all making active efforts to increase production. 　　In recent years, other regions where oil production is increasing are Central Asia and West Africa. Kazakhstan and Azerbaijan in Central Asia were referred to by Western media in the 1990s as the \"second Middle East\". Explorations over the years have confirmed that the situation in the Caspian Sea is not so optimistic. Kazakhstan’s reserves and production are rising rapidly, with a trend of further growth ； Azerbaijan’s Caspian Sea oil fields may not be able to achieve an annual production of 50 million tons. In 2006, the total oil production of these two countries was 100 million tons. West Africa is primarily the Gulf of Guinea; since the mid-1990s, large oil fields have been discovered continuously in Angolan waters, leading to a rapid increase in oil production. By 2006, production had reached 69.4 million tons, and the country is on its way to becoming an oil producer that outputs 100 million tons per year. This has turned this region (extending northward to Nigerian waters) into a new hotspot for oil exploration worldwide. Moreover, countries in Sub-Saharan Africa such as Chad and Sudan have **successively become new oil-producing nations. 　　The North Sea in Europe was once “blood red” in the 1970s. Since it was the period of the two oil crises, the developed countries in Europe and America were in trouble; yet the discovery of abundant oil and gas resources right on their doorstep made their value increase by a hundred times. Britain and Norway have become countries that produce hundreds of millions of tons of oil and hundreds of billions of cubic meters of gas per year. However, this good fortune did not last long; today, the oil and gas production in the North Sea has passed its peak and is now on the decline. Britain’s annual production peaked at 137 million tons in 1999, and had dropped to 76.6 million tons by 2006. Norway produced 162 million tons of oil in 2001, and 129 million tons in 2006. Europe’s dependence on imported oil is increasing. 　　Overall, the period of rapid development in the world’s oil industry is now in the past. It is no longer possible for oil production to double in just a few years. However, there is no need to be pessimistic. Although oil is a non-renewable energy source, individual oil fields will produce less and less as extraction continues, until they are depleted. However, we are still a long way from the exhaustion of world oil reserves. As early as the 1920s, some people said that oil was about to run out. The fact is that the world’s remaining recoverable oil reserves have been increasing. By the end of 2006, the remaining recoverable reserves had reached 180 billion tons, and even if no additional reserves were added in the future, they would still be sufficient for extraction for 50 years. Globally, it is estimated that oil production could reach its peak between 2030 and 2050, after which it will gradually decline. In other words, global oil production will continue to grow for at least 20 to 40 years, with an annual growth rate likely to be between 1% and 3%. 　　Natural gas will dominate the global primary energy mix. At present, oil remains the world’s largest source of energy. Since a major change occurred in the global structure of primary energy sources in 1967, when oil replaced coal as the primary energy source, oil’s share in the composition of primary energy reached its peak in 1973 at 45.8%. Since then, as natural gas, nuclear energy, hydroelectric power, and other alternative energy sources grew, this proportion has declined slowly, currently remaining at around 34%. But oil and natural gas account for over 62%. This trend is not likely to change significantly. However, natural gas production and supply are experiencing strong growth. Over the next 15 to 20 years, natural gas’s share in the primary energy mix could exceed that of oil. 　　The development of the global natural gas industry has seen basically no major fluctuations. The development of the Monroe gas field in 1925 can be regarded as the beginning of the modern natural gas industry in the United States and indeed around the world. Natural gas production and utilization in the first half of the 20th century took place almost exclusively in the United States. In 1970, the remaining recoverable reserves in the United States amounted to 8.2 trillion cubic meters, with annual production reaching a peak of 595.1 billion cubic meters. That year, global natural gas production was 1009.3 billion cubic meters, with the United States accounting for 59% of it. From the 1950s to the 1970s, the natural gas industry in the former Soviet Union grew. In Western Siberia, major gas fields such as Ulyanoye, Medvezhy, and Zapolian were discovered one after another. The reserves increased rapidly from 8.56 trillion cubic meters in 1965 to 42 trillion cubic meters by 1985, with annual production reaching as high as 815 billion cubic meters in 1990. Of this, the Russian Federation produced 597.9 billion cubic meters, and the United States produced 504.3 billion cubic meters; together, these two countries account for 55% of the world’s total production. However, globally, the increase in natural gas production has been relatively steady. Between 1970 and 2000, the annual increase was between 10 billion and 20 billion cubic meters. World natural gas production exceeded 1 trillion cubic meters in 1970, and surpassed 2 trillion cubic meters in 1991 ； In 2006, the world’s total remaining recoverable reserves were 175 trillion cubic meters, with an annual production of 2.86 trillion cubic meters. World natural gas production has not experienced a period of rapid growth, nor has there been a significant decline similar to that in oil production. 　　Like oil, the distribution of natural gas is also highly uneven. In 2006, the combined reserves of Russia, Iran, and Qatar amounted to 100 trillion cubic meters, accounting for 57.6% of the world’s total. Russia’s reserves amount to 47.65 trillion cubic meters, far ahead of others ； Iran: 28.13 trillion cubic meters; Qatar: 25.36 trillion cubic meters. The reserves of other ** are all less than 10 trillion cubic meters. The United States ranks fourth in terms of reserves, with these amounts having increased slightly in recent years to 5.93 trillion cubic meters. In 2006, the global total natural gas production was 2,865.3 billion cubic meters. Among these countries, those with an annual natural gas production of over 100 billion cubic meters were Russia (641.5 billion cubic meters), the United States (547.7 billion cubic meters), and Canada (171.5 billion cubic meters); together, these three countries accounted for 48% of the world’s total production. Others with an annual production of over 80 billion cubic meters include Algeria (93.1 billion cubic meters), Iran (91 billion cubic meters), Norway (87.6 billion cubic meters), the Netherlands (83.7 billion cubic meters), and the UK (83.2 billion cubic meters). It is predicted that in the coming years, natural gas production in Russia, Iran, Qatar, Australia, as well as in Central Asian countries such as Kazakhstan, Turkmenistan, and Uzbekistan, and in South American countries like Venezuela and Bolivia, will continue to increase significantly. Production in Western Europe and North America remains roughly unchanged or begins to decline. In 2000, Britain’s natural gas production was 108.4 billion cubic meters, and by 2006 it had dropped to 80 billion cubic meters, while Norway’s natural gas production continued to increase. 　　Compared to oil, natural gas has greater potential and momentum for development. By the end of 2006, the global natural gas reserve-to-production ratio was 61.7. That is to say, even if no new reserves are discovered in the future, the existing reserves can be exploited for 62 years. Therefore, there is significant room for increasing natural gas production. Over the next 10 to 20 years, global natural gas production growth will be higher than that of oil. 　　Unlike oil, the increase in natural gas production depends on export capacity. In Russia, Iran and other ** countries as well as Central Asia, pipeline transportation can be primarily used. As early as the 1970s and 1980s, the former Soviet Union had already established a vast gas pipeline network. Moreover, Russia adopted a policy of low domestic prices to encourage extensive use of natural gas; as a result, it consumes 400 billion cubic meters of it annually for domestic use. The United States and Western Europe have also long established natural gas pipelines. In recent years, China and India have experienced rapid economic growth, with their energy consumption rising sharply; they are bound to become world-class natural gas consumers in the future. China is seeking to obtain large amounts of natural gas from Russia and Central Asia, and corresponding gas pipelines will be built. India is arranging to obtain natural gas from Iran and Central Asia. South America is organizing the construction of north-south gas pipelines to transport the abundant natural gas from Venezuela and Bolivia to countries such as Argentina. 　　Qatar in the Middle East, and Australia and Indonesia in the Asia-Pacific region, are the countries where natural gas production is set to increase significantly in the coming period. They transport liquefied natural gas by sea using specialized LNG carriers. In 1964, Algeria built the world’s first natural gas liquefaction plant, with 3 production lines and a designed capacity of 1.7 million tons per year; the actual production capacity was 1.1 million tons per year. Natural gas liquefaction has developed rapidly over the past 10 years. To date, 16 ** have been established, with 30 natural gas liquefaction plants built; a total of 82 production lines have been or will be constructed, giving an annual production capacity of 224.6 million tons. The maximum production capacity of a single production line reaches 7.8 million tons per year. There are 8 natural gas liquefaction plants under construction, with 8 ** each ； There are 39 natural gas liquefaction plants of ** size, with 20 planned for new construction and expansion. It is estimated that by 2012, the global natural gas liquefaction capacity will reach 400 million to 500 million tons per year. Backed by the North Field (which is said to have reserves of up to 20 trillion cubic meters), Qatar is set to become the world’s largest LNG producer/exporter, with production expected to exceed 50 million tons per year by 2010, and possibly reach 100 million tons per year by 2015. The other two major LNG producers/exporters are Australia and Nigeria. Alternative energy sources cannot challenge the dominance of oil and gas. Recently, there has been a strong call within the **community to accelerate the development of alternative energy sources. However, the prominent position of oil and gas is difficult to shake. A fundamental solution to the world’s energy problems relies on technological breakthroughs in nuclear fusion. Nuclear and hydroelectric power together account for only about 10% of the world’s energy supply at present; constrained by uranium and water resources, they cannot replace oil and natural gas. Solar energy holds great potential, but its scale is limited; it accounts for less than 1% at present. As for bioenergy, such as ethanol, it can play a significant role in regions where agricultural resources are particularly abundant. On a global scale, land must first be used to ensure that 5 to 6 billion people have enough food to eat; this does not undermine the position of oil and natural gas. 　　In the future, the key region where significant increases in oil and gas reserves and production are expected to occur will still be the Middle East. Two-thirds of the world’s remaining reserves are concentrated here. While the output accounts for only 40%. Moreover, there is potential for further exploration here. Over the next 20 to 30 years, the Middle East will remain the main region for supplying and increasing production. Especially in Iraq, there are a number of oil fields ready for development; once the situation there stabilizes, production can be increased significantly in the short term. Secondly, there is Africa, including countries such as Libya north of the Sahara. Sub-Saharan Africa, and particularly the seas off West Africa, will remain hotspots for oil exploration in the world today. Once again, the potential in Central Asia lies primarily in Kazakhstan, Turkmenistan, and Uzbekistan; not only oil but also natural gas makes these regions key areas for exploration and development over the past 10–20 years. Furthermore, there is growing interest in the Arctic region. In Alaska, the United States has discovered large oil fields such as Prudhoe Bay, while Russia has found several massive gas fields in the Yamal Peninsula region. Recently, Russia has carried out extensive surveys of the Arctic Ocean shelf, claiming that most of it belongs to Russia. The United States, Canada, and other related countries have become nervous. It is foreseeable that this area will become a focal point of competition among the great powers, as well as a hot spot for oil and gas exploration in the next 10 to 20 years. In short, there are still considerable amounts of oil resources in the world; it is by no means on the verge of depletion. However, exploration is becoming increasingly difficult, which leads to higher costs for exploration and development. This is the fundamental reason why oil prices will continue to rise. 　　The extremely uneven distribution of oil and gas resources has led not only to developed countries such as the United States, the United Kingdom, France, and Italy, which have large multinational oil companies, striving to explore for oil and gas abroad, but also to many developing countries with considerable strength, such as India, Brazil, and Malaysia, which are actively supporting their own oil companies to seek oil overseas. Competition in this field is very fierce. China’s three major oil companies have carried out extensive activities abroad in recent years, and the amount of oil they obtain from overseas has approached 50 million tons per year. Our country **should formulate a series of policies to support and assist enterprises in going abroad to participate in the development of oil and gas resources** ； Our country’s oil companies should join forces and work together to leverage their respective advantages in terms of capital, technology, equipment, talent, and experience, thereby intensifying their overseas activities and achieving greater results. Guangdong LNG project: China’s first LNG pilot project, with a total investment of 29 billion yuan—the Guangdong LNG project (Shenzhen Dapeng LNG project)—completed its construction one month ahead of schedule. The MV Sea Eagle, loaded with 125,000 tons of liquefied natural gas, set sail from Australia on May 16 and is expected to arrive at the Dapeng reception terminal in Shenzhen on May 25. Within the next 3 days, the receiving station will be completely cleared, leaving only professional technicians and Australian experts to unload the cargo into the tanks. The first ship of LNG will be unloaded over a period of 20 days, allowing the temperature of the entire system to gradually drop to the operating temperature of -162°C, while also testing the safety of the system’s installation and the reliability of its operation. 　　The first LNG receiving station will receive its first shipment. As the pilot project for introducing LNG to our country, the Guangdong LNG project was approved in December 1999; construction officially began on December 28, 2003, with completion and operation scheduled for the end of June 2006. This project imports LNG from natural gas projects on the northwestern Australian continental shelf, and contracts are signed in accordance with the internationally standard 25-year \"take-or-pay\" arrangement. Over the 25 years following its commissioning, it will supply 3.7 million tons of LNG per year to Guangdong Province, to be used for power generation in local power plants, as well as for domestic, industrial, and commercial purposes. 　　At present, the construction related to the Shenzhen Dapeng LNG project is nearly complete, and the commercial arrangements and licensing agreements required for the official operation of the project have been largely finalized. The construction of the receiving station and the gas transmission main line has been largely completed; only the accompanying LNG power plant is still under construction. The first shipment of LNG shipped by the Northwest Australian Shelf Transport Company was loaded and dispatched on May 16, 2006. Due to the typhoon \"Pearl\" that occurred during that period, the arrival at the Guangdong LNG receiving station terminal was scheduled for May 25, 2006. On the 26th, both Chinese and foreign parties discussed the clearing and unloading of materials. 　 The two vertical tanks at the receiving station, with a capacity of 160,000 cubic meters each, have been filled with nitrogen to displace the air inside them. 　　Benefiting the Pearl River Delta and its residents, the Guangdong LNG receiving station is located on the east coast of Dapeng Bay in Shenzhen. This station will receive, store, and regasify liquefied natural gas from Australia, with an annual supply capacity of 3.7 million tons in the first phase. The 383-kilometer-long main pipeline will extend from Shenzhen to Dongguan, Guangzhou, and Foshan, supplying natural gas to the gas companies and power plants in these four cities. On site, the author observed that the pipelines with a nominal diameter of 450 millimeters, destined for the Pearl River Delta, had been installed, and their insulation layers were laid out in a very orderly manner. The pipeline on the other side, leading to the west shore of Tai Peng Bay – **, is thinner; the underwater pipeline has already been installed. 　　It is reported that the construction of this gas transmission main line is extremely difficult, as the pipeline passes through various complex terrains such as mountains, water networks, swamps, and beaches, as well as across the lands of over 590 rural villages and nearly 600 organizations and enterprises. 　　With the completion and commissioning of the Shenzhen LNG project at the end of June, a natural gas network along the coast of the Pearl River Delta in Guangdong will be established, creating a gas supply network that serves the cities in the Pearl River Delta. This network will provide natural gas for domestic use in the region, as well as for transportation purposes in the future, and it will also supply clean fuel to power plants. It is expected that by early July, residents in the four cities of Guangzhou, Shenzhen, Dongguan, and Foshan will begin to use LNG, which is clean, environmentally friendly, of high quality, and affordable. Soon after, **residents will also be able to use LNG. 　　Located within the Daya Bay Petrochemical Development Zone on the shores of Daya Bay, and adjacent to the Sino-Shell joint plant, the LNG power plant has completed its construction and is now awaiting the delivery of LNG from the Shenzhen LNG receiving station by the end of June. This 2,100 MW LNG power plant, built at a cost of 8.5 billion yuan by companies such as CNOOC and Guangdong Power Group, will, in line with green and environmental protection principles, provide power and steam services to 11 projects under construction or in the planning stage in the petrochemical area. It will also supply electricity directly to the Southern Power Grid, benefiting the Pearl River Delta region. 　　Exploring diversified energy sources for provinces with high energy consumption. Guangdong is a province with limited energy resources, yet it has high energy consumption. Guangdong relies mainly on energy supplied from other provinces and imported energy; to address the issues existing in its energy development, it is necessary to pursue a diversified approach to energy supply. The moderate development of liquefied natural gas is one of the key components of Guangdong Province’s energy diversification strategy. 　　According to Professor Lai Yuankai from South China University of Technology, the environmental benefits of natural gas power generation are considerable. Moreover, compared with coal-fired power generation, nuclear power, or hydroelectric power, natural gas power plants have lower unit investment costs, higher energy conversion efficiency, shorter construction periods, and greater flexibility in load management; as a result, their economic benefits are likely to become apparent soon. Furthermore, since 90% of Guangdong Province’s primary energy needs to be imported, and peak electricity demand is growing rapidly, natural gas power generation can play an important role in regulating peak loads. 　　On the other hand, Guangdong is facing a great opportunity to introduce LNG. Internationally, the global natural gas market is developing rapidly; the world’s LNG resources are relatively abundant, and the LNG transportation market is well-developed ； Domestically, **there is a focus on the import and utilization of natural gas, and relevant policies are being continuously formulated** ； Within the province, Guangdong Province has strong economic capacity to utilize clean energy sources such as LNG; it has a large market demand for natural gas, and it was at the forefront of introducing LNG across the country. Many **energy companies have expressed a strong desire to strengthen cooperation with Guangdong in terms of LNG resources and to actively participate in the development of Guangdong’s natural gas market. LNG prospects: World LNG demand is projected to be 280 million tons in 2010 and 375 million tons in 2015, with the Atlantic and Asia-Pacific markets accounting for half of each amount. The market demand in the Asia-Pacific region is as follows: Japan accounts for 40%, while new markets such as China, India, and the West Coast of the United States represent 60 million tons. In the Atlantic market, the focus is also on new markets; the United States and the United Kingdom are facing an imbalance between supply and demand due to shortages of pipeline gas, which has led to large-scale imports of LNG. The entry of new markets has had a significant impact on the global LNG trade landscape. The current LNG prices, driven by high oil prices, will also affect this demand. The world has abundant natural gas reserves, and the development of new LNG production capacity can meet demand. In 2015, about half of the supply in the Asia-Pacific region will come from new capacity, of which 40% is already confirmed or under construction. The Atlantic region needed 140 million tons of new capacity in 2015, of which two-thirds has already been secured or is under construction. Over the next 10 to 15 years, 11 new LNG exporting countries will emerge. Although Iran and Russia are behind in their development plans, their huge natural gas reserves are aimed at markets on both the east and west sides. Among the existing exporting countries, Trinidad, Nigeria, Egypt, Qatar, and Australia are rapidly expanding their production capacity. Qatar’s production capacity will reach 70 million tons in 2015, making it the world’s largest LNG exporter. A series of capacity developments in Australia will play an important role in the Asia-Pacific market.