Natural Gas on the Energy Market in 2009
Overview of global trends
2009 on the energy market was characterised by the strengthening of trends that first started to develop in the previous year: the global recession resulted in a substantial decrease in consumption and demand, leading to a drop in mineral oil prices.
2009 also saw the end to the steady increase in energy consumption that characterised the previous 27 years. The usage of mineral oil, natural gas and nuclear energy decreased around the world, with coal usage remaining unchanged. Only renewable energy sources and water energy saw any increase in the level of consumption. On a global level, primary energy consumption shrank by 1.1 per cent, with OECD countries suffering a more severe 5 per cent drop. On the other hand, China has continued to substantially increase its consumption by 8.7 per cent.
The global decrease in demand resulted in a price drop. In North America and the OECD countries, the prices of natural gas and coal fell significantly, but the increase in Chinese coal imports prevented coal prices from tumbling in Asia. In 2009, mineral oil prices fell for the first time since 2001, with the annual average price of a barrel reaching USD 60-62. The first half of the year was characterised by spectacularly low oil prices, which seemed to solidify by the end of the year. On the other hand, natural gas and coal prices continued to decrease throughout the year.
Natural gas consumption dropped by 2.1 per cent globally in 2009, with all regions contributing to the decrease. The largest shrinkage occurred in Russia (6.1 %), while the reduction was somewhat less in the United States, at 1.5 per cent), thanks to more favourable prices, which improved the competitiveness of natural gas.
Natural gas production was also characterised by a decrease around the world. The amount of natural gas unearthed fell by 12.1 per cent in Russia, and by 44.8 per cent in Turkmenistan, compared to the previous year. The reduction was not solely due to the drop in demand, but also the change in LNG prices, as liquefied natural gas became competitively priced last year. Thanks to the more intensive prospecting and mining of unconventional reserves, the USA generated the largest increase in production for the third consecutive year in 2009. Production also increased in the Middle East and in the Asia/Pacific region, predominantly thanks to the outstanding figures in Iran, Qatar, India and China.
Natural gas trading
Excluding trading between member states of the former Soviet Union, global natural gas trading fell by 2.1 per cent last year. Trading via pipelines dropped by 5.8 per cent, but LNG trading showed a positive trend (7.6 per cent annually) after the decrease in 2008, which is due to the continued increase in LNG exports by Qatar. Natural gas sales via pipelines also shrank, both between Russia and Europe, and between Canada and the USA. On the other hand, gas trading between the member states of the former Soviet Union was very active last year, with 80.4 billion cubic meters of natural gas being sold, making up 9.2 per cent of global gas trading.
Natural gas production
Globally, natural gas production fell in 2009. In Africa, for instance, the decrease reached 4.6 per cent, mostly due to the fact that Nigeria only produced 25 billion cubic meters of natural gas in 2009, compared to 35 billion in the previous year. On the other hand, the countries that steadily increased their natural gas production in recent years, including the US, Iran, Qatar, India, and China, managed to continue this trend in 2009. In the Asia/Pacific region, two countries increased their production: Australia (by 11 %) and Bangladesh (by 10 %).
The amount of natural gas produced in the European Union was 9.3 per cent lower than in 2008, with Great Britain, Denmark and Germany showing decreases in excess of 10 per cent. Norwegian production also dropped, albeit to a lesser degree.
In Latin America, Trinidad and Tobago has traditionally been a large exporter of natural gas, and managed to increase its production by 16 per cent compared to the previous year. This is due to the fact that once again, the USA purchased a large quantity of LNG from the republic lying along the Venezuelan coast. Production in Bolivia and Brazil, however, fell by 14 and 15 per cent, respectively, while Argentina and Venezuela showed more modest drops.
Natural gas reserves
Securely mineable natural gas reserves were estimated at 187.49 billion cubic meters at the end of 2009, which is nearly 66 billion cubic meters more than in 1989. The ranking of countries with the greatest reserves remained unchanged in 2009: Russia continues to top the list with 44.38 billion cubic meters, or 23.7 per cent of the securely mineable global reserves. Next stands Iran with 29.37 billion cubic meters, followed by Qatar with 25.37 billion cubic meters.
(Source: BP Statistical Review of World Energy, June 2010)