Interna t i o n a l G a s I n t e r n a t i o n a l
April G a s
S E R A C S A G L A R D U L T NA THE WOR FOR rg o . u .ig w w w
2 0 11
U n i o n
Kuala Lumpur, Malaysia.
25th WORLD GAS CONFERENCE M A L A Y S I A
KUALA LUMPUR
Conducted by the Industry, for the Industry • participation rate of more than 65 countries • average of 3,000 Conference Delegates • record of more than 33,000 Trade Visitors Participate in the world’s BIGGEST and MOST influential gas event, the 25th World Gas Conference, where the who’s who and all that matters in the ever-growing gas sector will be there. The biggest gas event held in Asia since 2003. “Gas: Sustaining Future Global Growth” Kuala Lumpur, Malaysia. 4 - 8 June 2012
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This is Innovation Now
International Gas april
2011
The IGU Magazine Published by International Systems and Communications Limited (ISC) in conjunction with the International Gas Union (IGU). Copyright © 2011. The entire content of this publication is protected by copyright, full details of which are available from the publisher. All rights reserved. No part of this publication may be reproduced, stored in retrieval systems or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior permission of the copyright owner.
International Systems and Communications Limited Park Place 12 Lawn Lane London SW8 1UD England Telephone: + 44 20 7091 1188 Facsimile: + 44 20 7091 1198 E-mail: general@isyscom.com Website: www.isyscom.com
International Gas Union c/o Statoil ASA 0246 Oslo Norway Telephone: + 47 51 99 00 00 Facsimile: + 47 22 53 43 40 E-mail: secrigu@statoil.com Website: www.igu.org
Vision, Mission and Objectives The International Gas Union (IGU) is a
E C O N O M Y: Promote all activities within the
worldwide, non-profit organisation promoting
entire gas chain, which can add to the technical
the progress of the gas industry. Through its
and economic progress of gas;
many member countries representing
C U S TO M E R S : Encourage development of good
approximately 95% of global gas sales, IGU
customer services and customer relations;
covers all aspects of the natural gas industry.
T E C H N O LO GY: Encourage research and dev
elopment towards new and better technologies ● The Vision
for the gas community;
Recognising that natural gas has an important
S A F E T Y: Promote the safe production,
part to play in satisfying the global need for an
transmission, distribution and utilisation
environment-friendly energy source, IGU will be
of gas;
the most influential, effective and independent
E N V I R O N M E N T: Encourage and promote
non-profit organisation, while serving as the
development of clean technology, renewable
spokesman for the gas industry worldwide.
energy applications and other activities, which will add to the environmental benefits of gas;
● The Mission
I N T E R N AT I O N A L G A S T R A D E : Encourage
IGU will actively, directly and through its
international trade in gas by supporting non-
members, promote the technical and economic
discriminatory policies and sound contracting
progress of the global gas industry.
principles and practices;
IGU will work towards improving the
L E G A L : Promote and contribute to the
competitiveness of gas in the world energy
development of legislation concerning:
markets. By promoting the development and
● the establishment of equitable, non-
application of new technologies and best
discriminatory and reasonable environmental
practices, IGU will help optimise the economics
and energy efficiency regulations, and
of the entire gas chain, while emphasising
● efforts to establish appropriate and relevant
sound environmental performance, safety
international standards,
and reliability.
as well as
IGU – serving as a global information
● the promotion of and participation in the
clearing house – will promote transfer of
exchange of information relating to
technology and know-how.
regulatory processes;
In carrying out this mission, IGU will
C O O P E R AT I O N: Enhance partnership with
maximise value to its members and gas
industry and manufacturers, and cooperation
customers.
with governments, policy makers and inter national energy related organisations, and
4
● Objectives
promote the exchange of information among
In striving towards the vision and fulfilling the
members in order to help them in improving
mission, IGU will regarding:
the efficiency and safety of gas operations.
V is i o n,
Mis s io n
a n d
O b j e c t iv e s
the eni award
ideas for a brighter future eni has always promoted advanced scientiďŹ c research, rewarding the most innovative projects and discoveries in sustainable energy. The eni award is a prestigious prize awarded once a year to researchers who stand out internationally for their work on the new frontiers of hydrocarbons, unconventional renewable energies and environmental protection. To build a better future out of today’s brightest ideas.
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© Sempra
Used with the permission of Sempra LNG.
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Contents Introduction Vision, Mission and Objectives
4
Message from the President
10
Message from the Secretary General
14
Countries Represented in IGU
18
IGU Organisation
26
News from the Secretariat
30
Bigger Role for Gas Discussed at 2nd IEF-IGU Ministerial By Erik Gonder
44
A Busy Council Meeting in Qatar By Mark Blacklock
50
Deadlines Approaching for IGU Awards By Jeanet van Dellen
60
News from Organisations Affiliated to IGU 64 Counting Down to IGRC2011 By Robert Badoux and Marie-José Fourniguet
82
25th World Gas Conference is on Track By Zahariah Abdul Rahman
86
Coordination Committee Progress Report 91 Introduction and Key Developments
92
Progress Reports from the Committees
98
Progress Reports from the Task Forces
130
Features
143
The Brazilian Gas Industry By Marcos de Freitas Sugaya, Jorge Paulo Delmonte and Marcos Moreira de Xerez Sobral
146
Cancún Agreement Hailed as a Lifeline By David Adam
154
IGU Joins Forces with Worldwatch for COP16 Gas Symposium By Mark Blacklock
162
The Gas Industry in Mexico, IGU’s Latest Charter Member By Germain Manchon
168
The New Potential of Gas By Walter Thielen and Marc Hall
172
Renewable Gas: Clean Fuels By Elbert Huijzer
176
Trends in Wholesale Gas Price Formation Mechanisms: Results of the 2009 IGU Survey By Mike Fulwood
180
EFET: Promoting Wholesale Gas Markets 188 By Maria Popova The Breakthrough Decade for NGVs By Eugene Pronin, Davor Matic and Manuel Lage Russia’s Initiative in UGS Education and Training By A.E. Arutiunov, S.A. Khan and M.P. Khaydina
194
200
A Fresh Look at the Old World: A Comprehensive Set of Methods to Study European and Russian Gas Markets to 2030 204 By Eric Vambert and Marcos de Freitas Sugaya The Ems Gas Pipeline Tunnel – On Time and Budget By Enno Freese
210
Expanding Northern Europe’s LNG Import Capacity By Sander Lemmers and Peter Boreham
216
GIIGNL’s Information Papers on the Safety and Security of LNG By Tony Acton
222
Publications and Documents Available from IGU
230
Obituaries
232
Events and Acknowledgements
233
The opinions and views expressed by the authors in this magazine are not necessarily those of IGU, its members or the publisher. While every care has been taken in the preparation of this magazine, they are not responsible for the authors’ opinions or for any inaccuracies in the articles. Unless otherwise stated, the dollar ($) values given in this magazine refer to the US dollar.
7
Turning partnerships into prosperity
In the energy business, strong working partnerships are the key to success. At every stage, from gas exploration to distribution, we work closely with our partners. We share with them our technical expertise, employ local people, invest in their communities and work together to find the right markets to maximise the value of our partners’ natural resources. Their potential. Our expertise. It’s a partnership you can rely on. A world leader in natural gas
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Message from the President Dear Colleagues Warm greetings and best wishes for a great year ahead. I am delighted to share with you the latest happen ings in IGU since the last issue of International Gas in October 2010. The past six months have ushered in a host of proactive activities and exciting initiatives. Building on the theme “Gas: Sustaining Future Global Growth” for the upcoming 25th World Gas Conference (WGC2012), we have developed the statement “Natural Gas CARES for the World” as part of our gas advocacy programme. This will be rolled out in the course of the year and is an important step forward in implanting a
Datuk (Dr) Abdul Rahim Hashim, President.
more effective and consistent voice for the global gas industry. Key advocacy messages have been
what is expected of the industry. This calls for
developed to spread the word that natural gas is a
concerted teamwork from IGU members to
clean, affordable, reliable, efficient and secure
develop the gas advocacy message and reinforce
energy source (hence the acronym CARES). IGU
it across the globe. The target audience will not
Council members dedicated a half day during the
only be policymakers, governmental bodies,
2010 Council meeting in Doha to a special
relevant ministries and energy lobbyists but also
workshop to provide their views on and support
the general public, the end consumers of energy.
for the gas advocacy toolkit. At the 2nd IEF-IGU Ministerial Gas Forum, also
10
l Communication at all levels
held in Doha, government and industry leaders
With the growing focus on environmental issues
discussed the key challenges facing the natural
and increasingly vocal calls for the creation of a
gas industry. Important proposals were made on
low-carbon economy, it is opportune for the gas
measures to promote natural gas in an innovative,
industry to take appropriate and quick measures
imaginative and effective way as an essential part
to answer the call for “green energy”. IGU
of the current and future global energy mix. It was
continues to participate actively in international
unanimously acknowledged that there is an urgent
conferences, seminars and work groups, and
need for IGU to lead in delivering a forceful
strives to secure alliances and win-win collabor
message that will reach out to all stakeholders and
ations with relevant world bodies as a means to
encourage them to take positive actions. The gas
promote gas as a sustaining fuel of choice in the
industry has to promote a sound vision of the
coming decades. Communication at all levels is
sustainability of gas now and in the future,
paramount if we are to ensure that gas has its
supported by actions that are geared to deliver
rightful place in the energy mix. IGU’s visible and
M e s s ag e
f r om
t h e
Pr e s i d ent
effective presence at various leading international
interested parties to take the opportunity to join in
events spearheads our vision to be the most
this global event by proposing papers for presen
influential, effective and independent non-profit
tation and/or posters. The National Organising
organisation while serving as the spokesman for
Committee is working hard to make WGC2012 a
the gas industry worldwide.
memorable event and keynote speakers from
To strengthen IGU’s position regionally we have
important oil and gas companies and associations
appointed four distinguished and influential
have already confirmed their participation.
industry leaders as Regional Coordinators for Asia
Response from exhibitors has also been very
& Asia-Pacific, Europe & the Commonwealth of
encouraging with 70% of the exhibition space
Independent States (CIS), Middle East & Africa and
already committed. Moreover, a Youth Programme
North & South America. We wish to place on
is being introduced for the first time at a World
record our appreciation and thanks to the Regional
Gas Conference. This will include a youth carnival,
Coordinators for accepting their appointments.
roundtable forum, digital marketing website,
These new positions will provide vital connections
science centre activities and also a publication on
and access to the major regional gas projects and
“Understanding the Natural Gas Industry”.
gas market developments, and to relevant poli
The year ahead will see IGU’s involvement in
tical, policy and regulatory developments as well
more events and initiatives covering the entire gas
as increased membership opportunities.
value chain around the world. We look forward to your continuing support.
l On schedule
The Triennial Work Programme is on schedule with the Technical Committees and Task Forces fully committed to working on their deliverables for WGC2012. The call for papers for WGC2012 was launched in February and I would like to invite
Datuk (Dr) Abdul Rahim Hashim
Kuala Lumpur will be the venue for the 25th World Gas Conference in June 2012.
Messag e
fro m
the
Pres i dent
11
Message from the Secretary General Dear Reader l Gas advocacy
In the spring of 2010 IGU launched its gas advocacy initiative to address issues relating to the role of gas in a future low-carbon society. The first phase of the gas advocacy work is now complete. The final reports are published on IGU’s website in the Gas Advocacy folder as downloadable PowerPoint presentations. This format makes it easy to copy pictures and adapt
Torstein Indrebø, Secretary General.
them for use in individual presentations. The reports contain facts and pictures which
consequences and the competition between the
illustrate the environmental advantages of gas,
various energy carriers. IGU has a crucial role in
and give good arguments why gas should be
placing gas in the right context to meet these
looked upon as important to the world’s long-term
challenges.
energy supply and not just as a transition fuel. The
The role of gas in a sustainable energy future
aim is to update and complete the presentations in
was also the theme for our 2nd Ministerial Gas
the time leading up to the 25th World Gas
Forum which was arranged together with
Conference in 2012.
International Energy Forum in Qatar in November
I hope that many IGU members and partners
2010, and our joint event with the Worldwatch
will find the presentations useful as a source of
Institute at the UN Climate Change Conference in
information about the advantages of gas when it
Mexico in December 2010. Presentations from
comes to security of supply, cleanliness and
both events can also be downloaded from IGU’s
affordability, and use them as flexible tools in
website.
communicating with the world at large. Along with the need to cut greenhouse gas emissions, the world needs more energy for a
On June 2, 2011 it will be 80 years since IGU was
population which is expected to increase from
established in London by its seven initiators:
6.7 billion at present to about nine billion in
Belgium, France, Germany, Great Britain, the
2050. This will require huge investments. The gas
Netherlands, Sweden and Switzerland. Norway
industry is very capital-intensive with a lifetime of
and the USA were observers. Manufactured gas
several decades for the installations. This type of
was the basis of the industry at that time. Natural
long-term investment calls for stable political and
gas arrived in greater volumes in the 1960s when
fiscal conditions. Energy policies worldwide in
many large gas fields were discovered.
recent decades have become increasingly impor
14
l IGU’s 80th anniversary
Today IGU and the gas industry have become
tant to the markets in that they have had a
truly global with increasing trading operations,
growing influence on risk profiles, environmental
and gas transport by pipelines and LNG carriers
M e s s ag e
f r om
t h e
Se c r e tary
General
all over the world. The industry has gone through
gas and to fulfil IGU’s vision of becoming the
major changes since IGU was established and gas
industry’s most influential non-profit organisation
has strengthened its position as an important
while serving as the spokesman for the gas
energy source worldwide.
industry worldwide.
The membership of IGU has risen significantly
I wish IGU a happy 80th anniversary!
and now comprises 109 members from 73 countries, representing about 95% of the world’s gas market. Efforts to promote the gas industry’s interests are continuing on a broad front by IGU’s members and its leading bodies. This is necessary to realise the full potential of natural
Torstein Indrebø IGU and the gas industry have seen major changes. (left ) Manufacturing gas in London in the early 20th century. (below left ) Laying Russia’s first gas pipeline in 1945. (below ) Exporting LNG from Bintulu in Malaysia.
Messag e
fro m
the
S ecretary
General
15
Š iceberg: Getty Images / D. Allan
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Our energy is your energy
Countries Represented in IGU Algeria
Equatorial Guinea
Macedonia
Slovenia
Angola
Estonia
Malaysia
South Africa
Argentina
Finland
Mexico
Spain
Australia
France
Monaco
Sweden
Austria
Germany
Netherlands, The
Switzerland
Belarus, Republic of
Greece
Nigeria
Taiwan, China
Belgium
Hong Kong, China
Norway
Thailand
Bosnia and Herzegovina
India
Oman, Sultanate of
Timor-Leste
Brazil
Indonesia
Pakistan
Trinidad and Tobago
Brunei
Iran
Peru
Tunisia
Bulgaria
Ireland
Poland
Turkey
Cameroon
Israel
Portugal
Ukraine
Canada
Italy
Qatar
United Arab Emirates
China,
Japan
Romania
United Kingdom
Kazakhstan
Russia, Federation of
United States of America
Croatia
Korea, Republic of
Saudi Arabia
Venezuela
Czech Republic
Latvia
Serbia
Vietnam
Denmark
Libya
Singapore
Egypt
Lithuania
Slovak Republic
People’s Republic of
Countries represented in IGU 74 Charter Members and 35 Associate Members
18
Cou n t r i e s
R e p r e s e n t e d
i n
IG U
charter members Algeria Association Algérienne de l’Industrie du Gaz – AIG Angola Sonangol Gás Natural Argentina Instituto Argentino del Petróleo y del Gas Australia Australian Gas Industry Trust
Belarus, Republic of Beltransgas Belgium Association Royale des Gaziers Belges
Brazil Associação Brasileira das Empresas Distribuidoras de Gás Canalizado (ABEGAS) Brunei Brunei Energy Association c/o Brunei LNG Sdn Bhd
Japan The Japan Gas Association
Egypt Egyptian Gas Association Equatorial Guinea Sociedad Nacional de Gas G.E.
Lithuania Lithuanian Gas Association
France Association Française du Gaz (AFG)
Macedonia Macedonian Gas Association
Greece Public Gas Corporation of Greece (DEPA) S.A. Hong Kong, China The Hong Kong & China Gas Co. Ltd
Ireland Irish Gas Association – Bord Gais Eireann
China, People’s Republic of China Gas Society
Israel The Israel Institute of Petroleum & Energy
Croatia Croatian Gas Association
i n
Latvia JSC Latvijas Ga¯ze
Finland Finnish Gas Association
Iran National Iranian Gas Company (NIGC)
Canada Canadian Gas Association
Korea, Republic of Korea Gas Union
Libya National Oil Corporation
Indonesia Indonesian Gas Association (IGA)
Cameroon Société Nationale des Hydrocarbures
Kazakhstan KazTransGas JSC
Eurogas
India Gas Authority of India Ltd (GAIL)
Bulgaria Overgas Inc.
R e p r e s e n t e d
Denmark Dansk Gas Forening – Danish Gas Association
Germany Deutsche Vereinigung des Gasund Wasserfaches e.V. (DVGW)
Bosnia and Herzegovina Gas Association of Bosnia and Herzegovina
Cou n t r i e s
Italy Comitato Italiano Gas (CIG)
Estonia Estonian Gas Association
Austria Österreichische Vereinigung für das Gas- und Wasserfach (ÖVGW)
20
Czech Republic Czech Gas Association
IG U
Malaysia Malaysian Gas Association (MGA) Mexico Asociación Mexicana de Gas Natural, A.C. Monaco Société Monégasque de l’Électricité et du Gaz (SMEG) Netherlands, The Royal Dutch Gas Association – Koninklijke Vereniging van Gasfabrikanten in Nederland (KVGN) Nigeria Nigerian Gas Association c/o Nigeria LNG Ltd Norway Norwegian Petroleum Society (NPF) – Norwegian Gas Association Oman, Sultanate of Oman LNG L.L.C. Pakistan Petroleum Institute of Pakistan
© PIERRE-FRANÇOIS GROSJEAN.
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charter members (continued) Peru Perúpetro S.A.
Slovenia Geoplin d.o.o. Ljubljana
Poland . Polskie Zrzeszenie Inzynierów i Techników Sanitarnych (PZITS) – Polish Gas Association
South Africa CEF (Pty) Ltd Spain Spanish Gas Association – Asociación Española del Gas (SEDIGAS)
Portugal GDP – Gás de Portugal, SGPS, S.A.
Sweden Swedish Gas Association – Energigas Sverige
Qatar Qatar Liquefied Gas Company Ltd (Qatargas)
Switzerland Schweizerische Aktiengesellschaft für Erdgas (SWISSGAS)
Romania S.N.G.N. Romgaz S.A. Russia, Federation of OAO Gazprom
Taiwan, China The Gas Association of the Republic of China, Taipei
Saudi Arabia Saudi Aramco
Thailand PTT Public Company Ltd
Serbia Gas Association of Serbia
Timor-Leste Secretariat of State for Natural Resources (Government of the Democratic Republic of Timor-Leste)
Singapore Power Gas Ltd Slovak Republic Slovak Gas & Oil Association
The IGU Secretariat is hosted by Statoil at these offices in Sandvika, Oslo.
22
Cou n t r i e s
R e p r e s e n t e d
i n
IG U
Trinidad and Tobago The National Gas Company of Trinidad and Tobago Ltd Tunisia Association Tunisienne du Pétrole et du Gaz (ATPG) c/o ETAP Turkey BOTAS¸ Ukraine Naftogaz of Ukraine United Arab Emirates Abu Dhabi Liquefaction Company Ltd (ADGAS) United Kingdom The Institution of Gas Engineers and Managers United States of America American Gas Association Venezuela Petróleos de Venezuela S.A. (PDVSA) Vietnam Vietnam Oil and Gas Group (PetroVietnam)
2010
2011
2012
Solar power
and, for when the sun isn’t out...
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Natural gas Sunflowers have the right idea. To derive the maximum benefit from sunlight, they turn their faces to follow
the sun! Although the photovoltaic cells in solar panels aren’t yet quite that clever, they’re delivering progressively higher energy yields. They can now even generate power when the sun goes in. But what happens at night, when the earth is facing away from the sun? Will we all be shivering? No! Not with a stable energy partner in natural gas. Solar power and natural gas can thus work in tandem for decades to come. The result of our readily available natural gas:
...energizing the future.
2025
2026
2027 . . .
w w w.gas terra.nl
a s s o c i at e m e m b e r s Bayerngas (Germany)
Instituto Brasileiro de Petróleo, Gás e Biocombustíveis – IBP (Brazil)
BG Group plc (United Kingdom) BP Gas, Power & Renewables (United Kingdom)
Izgaz – Izmit Gaz Dagitim San. Ve Tic A.S¸. (Turkey) Liander (The Netherlands)
Bursagaz (Turkey)
N.V. Nederlandse Gasunie (The Netherlands)
Cheniere Energy Inc. (USA)
Origin Energy Limited (Australia)
Chevron Corp. (USA) China National Petroleum Corporation (China)
Petróleo Brasileiro S.A. – Petrobras (Brazil) Russian Gas Society (Russia)
ConocoPhillips Company (USA)
RWE Deutschland AG (Germany)
DanaGas (UAE)
Shell Gas & Power International B.V. (The Netherlands)
Det Norske Veritas (Norway)
Société Suisse de l’Industrie du Gaz et des Eaux – SSIGE/SVGW (Switzerland)
E.ON Ruhrgas AG (Germany) ExxonMobil Gas & Power Marketing (USA) Gaslink – Gas System Operator Ltd (Ireland) GasTerra (The Netherlands) . GAZBIR – Association of Natural Gas Distributors of Turkey GDF SUEZ (France)
Sonorgás (Portugal) Spetsneftegaz NPO JSC (Russia) Taqa Arab Company for Energy (Egypt) TBG – Transportadora Brasileira Gasoduto BolíviaBrasil S/A (Brazil) Thyssengas GmbH (Germany)
IGDAS¸ – Istanbul Gas Distribution Co. (Turkey) Indian Oil Corporation Ltd (India)
TOTAL S.A. (France) Vopak LNG Holding B.V. (The Netherlands)
OR G AN I SAT I ONS AFF I L I ATED TO I G U Energy Delta Institute (EDI) Foundation IGU Research Conferences (Foundation IGRC) Gas Infrastructure Europe (GIE)
GERG – Groupe Européen de Recherches Gazières/European Gas Research Group GIIGNL – Groupe International des Importateurs de Gaz Naturel Liquéfié/International Group of LNG Importers
Cou n t r i e s
R e p r e s e n t e d
International Pipeline & Offshore Contractors Association (IPLOCA) Marcogaz
Gas Technology Institute (GTI)
24
International Association for Natural Gas Vehicles (IANGV) including its regional affiliates
i n
IG U
Pipeline Research Council International, Inc. (PRCI) Russian National Gas Vehicle Association (NGVRUS)
IGU Organisation 2009–2012 IGU Council IGU Management Team
President
Vice President
Executive Committee
IGU Secretariat
Coordination Committee
Secretary General
IGU Research Conference (IGRC) Task Force 1 Building Strategic Human Capital Task Force 2 Nurturing the Future Generations Task Force 3 Geopolitics and Natural Gas
P GC A
PG C B
WOC 1
W OC 2
Strategy
Sustainability
Storage
Exploration and Production
PG C C
Gas Markets
W OC 3
Transmission
This photograph was taken at the Executive Committee (EXC) meeting which was held in Doha, Qatar, in October 2010. From left to right in the first row are: Carlos Eduardo de Freitas Brescia, Colin Lyle (who was substituting for Andrew Wagg), Gro Mjellem (who was substituting for Jan Rune Schøpp), Yves Tournié, Ieda Gomes, Jérôme Ferrier, Datuk Abdul Rahim Hj Hashim, Ernesto López Anadón, Evgueni Riazantsev, Khaled AbuBakr and Jorge Delmonte (who was substituting for João Carlos de Luca).
PGC D LNG
WOC 4
Distribution
PGC E
Marketing
Programme Committees (PGCs)
WOC 5
Gas Chain
Utilisation
ig u
o rg a n i s ati o n
Working Commitees (WOCs)
From left to right in the second row are: Ho Sook Wah, Walter Thielen, Daniel Paccoud, Georges Liens, Antoni Peris Mingot, Kapyoung Ryu, Marcel Kramer, Milos Kebrdle and Torstein Indrebø (IGU Secretary General, not a member of the EXC). From left to right in the back row are: Domenico Dispenza, Kenji Ikejima, Mel Ydreos (who was substituting for Shahrzad Rahbar), Yongjang Xia (who was substituting for Wang Guangjun), Man Fai Sham (who was substituting for James Kwan), David N. Parker and Omar Maaliou (who was substituting for Yamina Hamdi). Alaa Abu Jbara sent his apologies.
26
Outgoing
IGU Management Team
Datuk (Dr) Abdul Rahim Hj Hashim, President (Chairman) (Malaysia)
Mr Jérôme Ferrier, Vice President (France)
Mr Ernesto López Anadón, Immediate Past President (Argentina)
Mr Ho Sook Wah, Chairman of the Coordination Committee (Malaysia)
Mr Georges Liens, Vice Chairman of the Coordination Commitee (France)
Mr Torstein Indrebø, Secretary General
I G U E X ECUT I V E CO M M I TTEE Mr Nordine Cherouati, Algeria
Mr Walter Thielen Germany
Mr Alaa Abu Jbara Qatar
Mr Ernesto López Anadón Argentina
Mr Domenico Dispenza Italy
Mr Evgueni Riazantsev Russia
Mr Carlos Eduardo de Freitas Brescia, Brazil
Mr Kenji Ikejima Japan
Mr Antoni Peris Mingot Spain
Ms Shahrzad Rahbar Canada
Mr Kap-young Ryu Republic of Korea
Mr Colin Lyle United Kingdom
Mr Miloš Kebrdle Czech Republic
Datuk (Dr) Abdul Rahim Hj Hashim, Malaysia
Mr João Carlos de Luca Instituto Brasileiro de Petróleo, Gás e Biocombustíveis, Associate Member
Mr David N. Parker United States of America
Mr Jérôme Ferrier France
Mr Ho Sook Wah Malaysia
Mr Khaled Abubakr, Taqa, Associate Member
Mr Georges Liens France
Mr Marcel Kramer The Netherlands
James Kwan IGU Regional Coordinator for Asia-Pacific
Mr Yves Tournié Total, Associate Member
Mr Daniel Paccoud France
Mr Runar Tjersland Norway
Mr Wang Guangjun, China National Petroleum Corporation, Associate Member
Ms Ieda Gomes BP Gas, Power & Renew ables, Associate Member
ig u
or g ani sation
27
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Yemen LNG Company
News from the Secretariat
The new Associate Members are ExxonMobil Gas & Power Marketing from the USA, Origin Energy Limited from Australia and RWE Deutschland AG from Germany.
The IGU Secretariat’s main activities since the last
Our new members are encouraged to sup-
edition of the IGU Magazine (October 2010) are
port and take part in IGU’s activities, and to
detailed below in news items and information
benefit from the wide network and the valuable
from the Secretary General (TI), Director (HR),
discussions during events. TI/CO
Senior Advisor & Press Contact (EG), Advisor to the Secretary General (JvD) and Advisor to the Secretary General (CO).
l Vacancy for Secretariat secondee
The term of Jeanet van Dellen, seconded to IGU l Four new IGU members
by N.V. Nederlandse Gasunie, will end in
During the 2010 Council meeting, IGU was
November 2011. We invite members to consider
pleased to welcome one new Charter Member
seconding a person with a few years’ experience
and three new Associate Members.
in the field of energy to the IGU Secretariat in
The new Charter Member is Mexico repre
Oslo. The position will expose the candidate to a
sented by the Asociación Mexicana de Gas
wide area of responsibilities and give them experi
Natural, A.C. (Mexican Natural Gas
ence of a unique international environment. IGU
Association).
will cover the candidate’s job-related expenses,
The staff of the IGU Secretariat are, from left to right, Erik Gonder (Senior Advisor & Press Contact), Jeanet van Dellen (Advisor to the Secretary General), Torstein Indrebø (Secretary General), Hans Riddervold (Director) and Carolin Oebel (Advisor to the Secretary General). Åse Nicolaysen (Administration Assistant) is seated.
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including travel costs, while the employer of the secondee must cover salary and other costs related to the assignment. The secondment period will normally be for two years. TI l LNG17 launches,
LNG18 host elected The triennial LNG conferences are organised jointly by IGU, the Gas Technology Institute (GTI) and the International Institute of Refrigeration (IIR).
Preparations for LNG17 are well underway.
The American Gas Association is the host of the 17th International Conference & Exhibition on Liquefied Natural Gas (LNG17),
Ian Little, Chairman of the Australian Gas Industry Trust (right ) and Ernesto López Anadón, Chairman of the LNG16 Steering Committee (left ) at the LNG18 contract signing.
which will be organised in Houston, April 16-19,
organisations around the world. In this context,
2013. For more information visit: www.lng17.org.
efforts have been made by IGU to establish a
The LNG17 Steering Committee, chaired by
clear and coherent message on the role natural
Jack Lewnard of GTI, and Programme Committee,
gas can and should play. A workshop facilitated
chaired by Dr Nirmal Chatterjee of Air Products &
by Michael Stoppard from IHS CERA was org
Chemicals, held their first meetings in Houston in
anised at the April 2010 Executive Committee
November 2010. At the same time Australia was
meeting in Jimbaran and some of the issues and comments raised were:
elected to host LNG18 in Perth in 2016. TI
l There are differences in the perception of gas
between different regions and economies – l IGRC – 2011 in Seoul, 2014 in
particularly when looking at developed versus
Copenhagen
emerging economies; l The industry in general is seen more as a
The next IGU Research Conference (IGRC) will take place in Seoul, Korea, October 19-21. Please
policy-taker rather than a policy-shaper; l The message of the industry regarding natural
see pages 82-84 for more information. At the IGU meetings in Doha last October, the Danish Gas Technology Centre on behalf of the Danish Gas Association was elected to host the IGRC in 2014. It will take place in Copenhagen,
gas has changed over the years – from bridg ing fuel to complementary fuel, pointing to a diminished role for natural gas; l Shale gas could be a “game changer” and this
unconventional gas source needs to be fully
September 17-19, 2014. JvD
exploited from a security of supply as well as price stability standpoint;
l Gas advocacy
l There is a need to communicate better and
Since the last World Gas Conference in Buenos
establish the vision for natural gas in a
Aires, an increased recognition of the role of
decarbonised world.
natural gas has been noted, not only within the natural gas industry itself, but also amongst other
In June 2010, PFC Energy, Washington DC, USA, was appointed to undertake a study on gas
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I G U ’ s g a s a d v o c a c y i n i t i at iv e
Natural Gas is clean. Natural gas produces less nitrogen oxide than coal, and more than 50% less CO2. Gas produces no sulphur and no solid waste Natural gas promotes sustainable transport. Natural gas vehicles can improve air quality and energy efficiency in large cities.
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Natural gas is the affordable choice. Modern gas-fired plants have a capital cost that is half that of coal, one-third the cost of nuclear and one-fifth the cost of onshore wind.
Natural gas is available now. Gas is readily available from a variety of sources, both pipeline and LNG. The environmental benefits of gas can be realised immediately.
Natural gas does not require subsidies. Unlike heavily subsidized renewable technologies, natural gas use allows countries to affordably reduce their emissions.
Natural gas is versatile. Gas can serve as a flexible partner in power generation for intermittent energy sources like wind and solar, facilitating the phase-in of renewables.
International Gas Union
Se c r e ta r i at
The Voice for the Gas Industry Worldwide www.igu.org
Natural gas is efficient. Modern gas-fired power plants are 40% more efficient than coal plants. Natural gas saves time. Gas-fired plants require less construction time than nuclear or coal plants.
Natural gas is abundant. Global production will increase over the next 20 years, with growing supplies from both conventional and unconventional resources. Natural gas is safe. The natural gas sector has the best safety record in the industry.
It is time to act. It is time to choose Natural Gas.
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the
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advocacy to help IGU to ensure a proper under standing and perception of natural gas amongst the various stakeholders. The Gas Advocacy Report contains the key messages and identifies the main stakeholders. The five main message categories underline that natural gas CARES for the world, as it is Clean, Affordable, Reliable, Efficient and Secure.
& Figures”. Its main purpose is to provide input to efforts promoting natural gas more actively towards external stakeholders. It is structured as a tool kit for IGU members, offering factual information as an excellent basis for presentations made by members in different countries around the world. For individual presentations the relevant slides can be integrated in line with the most appropriate
Sustainable Development Work Group (SDWG) In the context of advocating the sustainable pro perties of natural gas, the Sustainable Development Work Group (SDWG), which was established at the 2009 Council meeting in Buenos Aires, has
communication strategy for the respective region and considering the specific stakeholders to be addressed. In certain regions reference to the “Triple A” slogan – Abundant, Affordable, Acceptable – might be a powerful message. HR/CO
also prepared a report on climate and gas. Com piled by Bert Panman, Dick de Jong and Terence Thorn, the title of this report is “Natural Gas, Facts
l 2nd IEF-IGU Ministerial Gas Forum
The 2nd IEF-IGU Ministerial Gas Forum was held in Doha, Qatar, November 30, 2010, under the theme “The Role of Natural Gas in a Sustainable Energy Future”. The Forum was a further important step in strengthening the global dialogue between natural gas producing and consuming countries, and delegates welcomed the offer by France to host the 3rd IEF-IGU Ministerial Gas Forum in 2012. In Doha, government and industry leaders discussed the changing dynamics of the gas markets and the key challenges facing the natural gas industry from a low-carbon perspective. For a detailed report, please see pages 44-47. EG/JvD l COP16 gas symposium
IGU sees the UN climate change conferences as important arenas for informing public servants and other delegates about the contributions of the gas industry to a low-carbon economy, and for addressing gas issues from a climate perspective. Following the successful gas event during COP15 in 2009, IGU decided to organise a similar event at COP16 in Cancún, Mexico. This time IGU colla borated with the Worldwatch Institute, which is an Qatar’s Deputy Prime Minister, HE Abdulla Bin Hamad Al-Attiyah (l e f t ) greets Datuk Rahim Hashim (c e n t r e ) and Torstein Indrebø (r i g h t ) at the 2nd IEF-IGU Ministerial Forum.
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independent US-based international research organisation focused on energy, resource and
environmental issues. The IGU-Worldwatch gas symposium was held on December 5, 2010, and is covered in more detail on pages 162-166. EG/CO l IGU Gas Awards
IGU is inviting submissions for this Triennium’s Gas Awards and encourages you to send in pro posals. The deadlines for submission are July 1 for the IGU Gas Efficiency Award and September 1 for the IGU Social Gas Award. You can find out more on pages 60-61 or by visiting the IGU website (www.igu.org/knowledge/ gas). If you have further questions please contact Jeanet van Dellen in the IGU Secretariat at jvde@ statoil.com. JvD l IGU visits AGA
Statoil’s Senior Vice President for Climate, Hege Marie Norheim, was one of the speakers at the IGU-Worldwatch gas symposium during COP16.
IGU visited US Charter Member the American Gas Association (AGA) in Washington DC in
market developments that included both political and
November 2010. The IGU delegation consisted
business related issues. In particular, they pointed
of the President, Coordination Committee (CC)
out that shale gas developments had dramatically
Chairman and Secretary General.
impacted the supply side of the American gas
AGA had prepared a wide-ranging programme
market and brought down gas prices. This
which included meetings with many key organisa
development had in turn led to rerouting of LNG
tions and institutions influencing the US energy mar
that was originally destined for the US market,
kets. Experts in AGA gave an overview of US gas
thus impacting the global gas supply picture.
IGU is inviting submissions for this Triennium’s Gas Awards.
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l New interactive map online
IGU has worked with the Energy Delta Institute (EDI) to develop a new version of the Interactive World Gas Map which provides statistics and qualitative information about the gas market worldwide. Clicking a link on the home page of www.igu.org takes you to the map and you simply scroll over it to home in on the region and country you want. EG l World Shale Gas Conference An IGU delegation visited AGA’s headquarters in Washington DC last November. From left to right are: Jay Copan (Executive Director of LNG17), Ho Sook Wah, Datuk Rahim, David N. Parker (AGA President & CEO) and Torstein Indrebø.
IGU was the co-organiser with AGA and the CWC Group of the inaugural World Shale Gas Conference & Exhibition which took place in Dallas-Ft Worth, USA, November 2-5, 2010. There were over 450
The programme included a meeting with
participants from 35 countries. IGU was represented
the American Natural Gas Alliance, the Interstate
by the President and Secretary General whose
Natural Gas Association, the World Bank and
presentations are available on the IGU website.
the Worldwatch Institute. The topics covered a
Key themes that arose from the conference
wide range of areas including cooperation
agenda included:
about improving the image and knowledge of
l Gas is good but gaining and maintaining
the natural gas industry in both developed and
public image is critical.
developing nations.
l Natural gas is set to play a bigger and more
TI
central role in the world energy mix; shale gas will have a crucial role to play in this picture. l Shale gas is truly a revolution, unlocked by
technology with further room for advances; the story is by no means over. l Global development will be uneven depending
on geology, vigour of the exploration effort, infrastructure, fiscal terms, regulatory maturity, commercial strategies and societal attitudes. l The question still remains, however, as to how
long will it take and at what cost can shale gas be produced outside North America. l Most importantly to fully and efficiently exploit
shale gas, the long term mid-cycle price needs to be higher; a figure of $5-$6 per MMBtu was mentioned. l Realising the full potential requires community Torstein Indrebø for IGU and Robert Badoux for EDI shake hands on the Interactive World Gas Map agreement.
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and government support while full disclosure must be addressed at all stages.
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Datuk Rahim addresses the World Shale Gas Conference.
l Shale gas players should be responsive to
stakeholder concerns and collaborative in developing sound regulatory frameworks. l For smooth development, the shale gas industry
needs coordinated industry communications
and education aimed at understanding the full implications of this new resource base. l The development of shale gas on a global scale
will open up fresh opportunities for collabor ation, cooperation and new types of partnership rarely witnessed on the scale envisaged. The 2011 World Shale Gas Conference & Exhibition will take place in Houston, USA, November 7-10. For more information please contact Sally Shaw, sshaw@thecwcgroup.com. EG l IGU at international events
World Energy Congress The 21st World Energy Congress was held in Montreal, Canada, September 12-16, 2010. IGU had a stand that promoted WGC2012 and the Union in general, while the Secretary General chaired a session on energy supply bottlenecks. Together with Shahrzad Rahbar, Chair of the Canadian Gas Association, and Mel Ydreos, Chair of IGU’s Task Force 3, he also participated in a Torstein Indrebø, Mel Ydreos and Jeanet van Dellen at the 21st World Energy Congress.
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CNBC international broadcast session on energy opportunities and gave interviews to TV stations.
Rosa Elvira Herrera (Huancano, Pisco)
Camisea have been working five years for a clean, economical and environmental friendly energy source. As the main natural gas pipeline carrier, TgP is proud to be part of the most important energy project in PerĂş.
www.toronja.com.pe
SHE IS FIVE YEARS OLD, AND HAS BREATHED CLEAN AIR HER WHOLE LIFE.
Central European Gas Congress The Polish Chamber of the Natural Gas Industry organised the Central European Gas Congress 2010 in Wisla, Poland, October 26-28. Hans Riddervold, Director of the IGU Secretariat, addressed delegates on the topic of “Natural Gas in the Energy Policy of the EU and V4 Countries”. The “V4” or Visegrad Group is a regional grouping of the Czech Republic, Hungary, Poland and Slovakia. International Oil & Gas Forum Naftogaz, the Ukrainian Charter Member of IGU, Erik Gonder addresses the 14th International Oil & Gas Forum in Kiev.
organised the 14th International Oil & Gas Forum in Kiev, November 2-4, 2010. IGU Senior Advisor, Erik Gonder, addressed delegates with a speech
INGAS
on “The Role of Natural Gas in the Sustainable
INGAS took place in Skopje, Macedonia, October
Future” and also gave an overview of the various
8-9, 2010. High-level representatives discussed
initiatives launched by IGU on this issue.
the energy politics of the Balkans focusing on the role of natural gas and on investment and oper
Qatar celebrates 77 mtpa LNG capacity
ating strategies. The Secretary General contributed
The Secretary General took part in the celebration
with a presentation underlining the abundance,
to mark Qatar’s LNG capacity reaching 77 mtpa,
affordability and acceptability of natural gas.
reconfirming the country’s position as the world’s leading producer of LNG. The event was held on December 13, 2010, at Ras Laffan Industrial City, under the patronage and presence of HH the Emir of Qatar, Sheikh Hamad Bin Khalifa Al-Thani, and was hosted by HE Abdulla Bin Hamad Al-Attiyah, the Deputy Prime Minister and at the time also Minister of Energy & Industry. Some 1,200 VIP guests from around the world attended, including the 23 countries to which Qatar currently exports LNG. China City Gas Forum The CC Secretary, Ungku Ainon Ungku Tahir, gave a presentation at the 3rd China City Gas Forum, which was held in Shenzhen, China, December 9-11, 2010. Themed “Green Energy, Green City and Green Future”, the forum was organised by
Torstein Indrebø and Alaa Abujbara, Chairman of IGU’s Programme Committee D, at Qatar’s LNG celebration.
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China Gas Association and China Gas Society and hosted by Shenzhen Gas Corporation Ltd.
UNECE Working Party on Gas The Working Party on Gas of the UN Economic Commission for Europe (UNECE) held its 21st annual session in Geneva, Switzerland, January 18-19. On the agenda were five key studies which are being undertaken by the UNECE Member States. They deal with gas market liberalisation, regulation of the gas industry, the use of gas in transport, underground gas storage and LNG. Jeanet van Dellen, Advisor to the Secretary General, presented IGU’s activities in the field of gas advocacy and contributed to the roundtable on the use of gas in transport.
Ungku Ainon addresses the 3rd China City Gas Forum in Shenzhen.
Handelsblatt 2011 conference From January 18 to 20 in Berlin, Germany, the German newspaper Handelsblatt held its 18th
Held annually, the forum is aimed at promoting
Annual Conference focusing on energy topics. A
dialogue and information exchange between city
high-level selection of speakers from politics, non-
gas companies and government as well as
governmental organisations and the industry
addressing the development of the city gas
discussed the latest developments in the energy
industry in China.
market in Germany. A focus was on the
During the Handelsblatt conference, Torstein Indrebø participated in a panel discussion (above ) and met delegates including Klaus Schäfer (o p p o s i t e ), Chairman of the Board of Management of E.ON Ruhrgas.
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b e lo w
Torstein Indrebø and Klaus Schäfer at the Handelsblatt conference.
market – the implications for Europe’s gas industry”. Other panellists were Dr Agnus Cassens (Shell Upstream International), Stefan Judisch (RWE Supply & Trading GmbH), Klaus Schäfer (E.ON Ruhrgas AG) and Jens Schumann (Gasunie Deutschland). IndoGas 2011 The President, CC Chairman and Secretary General were present at the 5th IndoGas Conference & Exhibition with the theme “Clean Energy for Sustainable Development”. The event was endorsed by IGU and took place in Jakarta, Indonesia, January 24-27. implications of the “Energy Concept” presented by the German government in September 2010. The Secretary General participated in a panel discussion on “Revolution in the world energy
Topics discussed included the question of how Indonesia’s natural gas industry could be expanded. CO
response to new opportunities for natural gas.
Bigger Role for Gas Discussed at 2nd IEF-IGU Ministerial
Both sessions were moderated by the Right Honourable Tim Eggar, Chairman of Nital Solar and a member of IGU’s Wise Persons Group.
By Erik Gonder
IGU President, Datuk Rahim Hashim, under lined the necessity of enhanced dialogue among
The 2nd IEF-IGU Ministerial Gas Forum was held
all gas stakeholders. He pointed to the importance
in Doha, Qatar, on November 30, 2010, under
of “improved alignment of business strategies and
the theme “The Role of Natural Gas in a
energy policies to meet the global energy chal
Sustainable Energy Future”.
lenge of bringing clean and reliable supplies to a
HE Abdulla Bin Hamad Al-Attiyah, Qatar’s
growing population, and at the same time ensure
Deputy Prime Minister and at the time also
sustainable economic growth”.
Minister of Energy & Industry, hosted the Forum,
Torstein Indrebø, IGU Secretary General, said
which was attended by representatives of govern
that “given its availability, environmental qualities
ments from gas producing and consuming
and advances in technology, natural gas is an
countries, the gas industry and international
essential part of the global solution to climate
organisations.
change, in particular as a substitute fuel in the
The Forum was organised under the Chatham
power sector”. He highlighted the role of natural
House Rule as a pair of panel sessions, each
gas in a sustainable energy future as an
followed by roundtable discussions involving all
“enabling” or “dual” fuel to back up intermittent
participants. The morning session discussed dev
renewable energy sources. “Natural gas is more
elopments in global gas markets and the role of
than a bridge, it’s a destination fuel,” he declared.
natural gas in a sustainable energy future, while
IEF Secretary General, Noé van Hulst, called on
the afternoon session looked at the industry’s
the industry to take the long-term view and con
The Forum was attended by representatives of governments, the gas industry and international organisations.
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tinue to invest in the gas value chain despite uncertainties surrounding the global economic downturn and current market conditions character ised by a gas glut and relatively low prices. Reflecting on recommendations from the 1st IEF-IGU Ministerial Gas Forum, calls from IEF Ministers, the G8 and G20, van Hulst noted that IEF, in cooperation with its JODI (Joint Oil Data Initiative) partner organisations is working on the extension of JODI to cover natural gas. The intention is to launch a Gas-JODI Database in 2011 with the aim of helping to improve gas market data transparency to the mutual benefit of producers and consumers. IEF and IGU noted that projected expansion
From left to right on the podium are: HE Abdulla Bin Hamad Al-Attiyah, Qatar’s Deputy Prime Minister; Datuk Rahim Hashim, IGU President; and Torstein Indrebø, IGU Secretary General.
and lengthening of gas supply chains gives impetus to a growing need for focus on global energy dialogue and that “multilateral agreements
years; a surge in supply volumes coupled with
and intergovernmental solutions will be
weak demand resulted in a global gas over-
increasingly needed to support or bring forward
supply. However, gas demand is expected to
new infrastructure, to jointly explore and exploit
resume growth in both emerging and traditional
new gas reserves, and to help establish robust and
markets in the coming years and decades. The structure of global gas demand has
secure markets to the benefit of all parties”. The important role to be played by the evolving
changed as developing countries have begun to
cooperative relationship between NOCs and IOCs
use more natural gas and the traditional markets
was also emphasised.
have seen their demand level off or decline. The projected increase in gas demand in the next
Government representatives and industry leaders discussed key challenges facing the
decades is expected to come primarily from non-
natural gas industry and how it can help develop
OECD countries, with Asia and the Middle East
a sustainable response to climate change. They
playing a leading role. The surprising development of unconventional
emphasised the need to create predictable rules and regulations in order for the industry to act
gas resources in the US has dramatically altered
efficiently in their operations and investments, for
the global market and is expected to have a
a sustainable use of resources and a sound use of
significant impact on the gas outlook not only in
available human capital. The discussion focused
North America but in other parts of the world as
on the following major areas.
well. However, outside the US, it is still very uncertain how much shale gas can be developed.
l Gas markets
Gas demand in many producing countries has
Natural gas consumption and trade have been
been growing sharply over the past two decades
growing steadily over the past two decades and
and will continue to grow. This trend has impli
gas has strengthened its position in the world
cations for producing countries as well as energy
energy mix. Natural gas markets were affected by
markets globally, as increasing domestic demand
a confluence of major forces during the past two
impacts exports and reduces export revenues.
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l Natural gas – a responsible choice for a
sustainable future For many decades to come future fossil fuels will continue to account for a substantial share of the global future energy composition and natural gas will continue to play a significant role in global energy demand; its share will increase substantially, as demand will continue to increase especially for power generation sector, in parti cular in emerging and developing countries. Given its availability, environmental qualities and advances in technology, natural gas is an essential part of the global solution to climate change. The natural gas industry has the scale, technology, and HE Abdulla Bin Hamad Al-Attiyah with Jean-François Cirelli, Vice Chairman & President of GDF SUEZ (l e f t ), and Datuk Rahim Hashim (r i g h t ).
resources to reduce CO2 emissions. This positive
Beside its importance as a supplier to the world
energy future should be highlighted much more
market, the Middle East is emerging as an
strongly in international fora and debates.
important centre of demand growth.
contribution that natural gas is making in climate change mitigation and delivering a sustainable
Due to a number of political, technical, economic
There is an urgent need to ramp up energy
and market-related factors, the expected period
efficiency and energy saving, in particular in
leading to a substantial renewable energy base will
developing countries, to curb demand growth and
be lengthy and will require significant subsidies.
also tackle the issue of phasing out, over the
Natural gas can be an “enabling fuel”. It can play
medium term and in a socially acceptable way,
a role of a “dual” fuel to renewables by enabling
unsustainable fossil fuel subsidies.
increased deployment of energy supply from inter
The global spot market is gaining maturity
mittent renewable technologies. Natural gas is abun
leading to a more liquid market with greater
dant, affordable and environmentally acceptable.
potential for narrowing regional price differences.
Hence, towards a sustainable energy future, natural
However, the increase in shale gas production has
gas is more than a bridge, it’s a destination fuel.
reduced US imports of LNG, with adverse impacts
The importance of communication and cooper
on the globalising trends of the gas markets. Is
ation between policymakers and the gas industry
this temporary or permanent?
to reach common goals of a sustainable energy
Spot gas prices have fallen in the world’s two
future was acknowledged.
major spot markets, widening the gap between
The need to reduce gas flaring was underlined
gas prices in long-term oil-indexed contracts and
as an issue for the industry to address so as to
spot gas prices. Adjustments are being introduced
better communicate the strong potential of the role
in long-term contracts to reflect spot market
of gas in a sustainable energy future.
conditions and hybrid spot/oil indexed formulas
46
are included in long-term contracts. However,
l Investment
long-term oil-indexed contracts are likely to
Worldwide, gas resources are more than sufficient
remain predominant as they underpin huge
to meet projected demand for the coming decades,
upstream and infrastructure investments.
subject to adequate investments. The gas industry is
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capital-intensive and huge investments through the
bring forward new infrastructure, to jointly explore
entire value chain are needed to compensate for
and exploit new gas reserves, and to help esta
the natural decline of existing gas fields. According
blish robust and secure markets to the benefit of
to IEA forecasts, the cumulative investment required
all parties. This will require long-term cooperation
over the period 2010-2035 amounts to $7.1 trillion
between gas producers and consumers, and
or around $270 billion per year.
transit countries.
The challenge facing the industry is to take the
Driven by long-term economic considerations,
long-term view and continue to invest in the gas
the interests of national (NOC) and international
value chain despite uncertainties surrounding the
(IOC) oil companies are more likely to converge in
economic downturn and current market conditions
the natural gas business. Stronger partnerships,
characterised by a gas glut and relatively low prices.
multifaceted cooperation and innovative arrange ments between NOCs, IOCs, and services
l Gas market transparency
companies will be needed, particularly for the
The 1st IEF-IGU Ministerial Gas Forum held in
challenges of developing remote and difficult gas
Vienna in 2008 echoed and welcomed the call of
resources. In this regard, the 2nd IEF NOC-IOC
IEF Ministers to extend JODI to natural gas. IEF, in
Forum (to be held in Paris, April 7-8, 2011) was
cooperation with its JODI partner organisations
recognised as an important platform to facilitate
and GECF, initiated the extension work in 2009.
this cooperation.
The Gas-JODI Database is expected to be launched in 2011. It will provide a more accurate
l 3rd Forum in 2012
picture of market conditions and hence will benefit
Continuation of the IEF-IGU Ministerial Gas Forum
gas market players.
is a very useful tool for discussion among all stake holders and the offer by France to host the 3rd IEF-
l Natural gas – a vector for cooperation
IGU Ministerial Gas Forum in 2012 was welcomed.
and dialogue Multilateral agreements and intergovernmental
Erik Gonder is Senior Advisor & Press Contact in
solutions will be increasingly needed to support or
the IGU Secretariat.
In the afternoon panel session from left to right are: Philippe Boisseau, President Gas and Power, Total; Thomas R. Walters, President, ExxonMobil Gas & Power Marketing; HE Abdulla Bin Hamad Al-Attiyah; Tim Eggar, Moderator; Hans-Peter Floren, Member of the Board of Management, E.ON Ruhrgas; Rune Bjørnson, Executive Vice President, Natural Gas, Statoil; and Gertjan Lankhorst, CEO, GasTerra.
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A Busy Council Meeting in Qatar
IGU and natural gas more actively by organising
By Mark Blacklock
Sook Wah explained that since then seven
events, participating in conferences and cooperat ing with international bodies. The 2009 Council meeting had approved its establishment, and Ho members had been recruited (see box) with the
The 2010 Council meeting covered important
Secretary General, Torstein Indrebø, in the chair.
ground including the accession of four new
“We would like to thank them for their support,”
members. It was held at the Four Seasons Hotel in
he said.
Doha on October 21, following sessions of the
The UN Climate Change conferences are
Coordination Committee and the Executive
clearly a priority for the work group and Torstein
Committee. The whole event was hosted by
Indrebø briefed delegates on preparations for the
Charter Member Qatargas, and was attended by
gas symposium during COP16 being organised by
140 delegates and 24 accompanying persons.
IGU in conjunction with the Worldwatch Institute.
The day’s business was opened by IGU’s
(This was held six weeks after the Council meeting
President, Datuk (Dr) Abdul Rahim Hashim, who
and is covered on pages 162-166.) He also
asked delegates to approve the minutes of the
reported that a joint publication with Charter
previous Council meeting, which had been held
Member Eurogas was being prepared entitled
immediately prior to the 24th World Gas
“The Role of Gas in a Sustainable Energy Future”.
Conference in Buenos Aires in October 2009.
Ho Sook Wah took the floor again to introduce
Delegates were then briefed on a series of
the four new Regional Coordinators. Two of these
developments including the second IEF-IGU
were present – Marcel Kramer (Europe & CIS) and
Ministerial Gas Forum, which was held a month
Khaled Abubakr (Middle East & Africa) – while
after the Council meeting (see the report on
João Carlos de Luca (North & South America) was
pages 44-47).
represented by Jorge Paulo Delmonte and James Kwan (Asia & Asia-Pacific) by Man Fai Sham.
l Sustainable development
Datuk Rahim thanked the Regional Coordinators
Ho Sook Wah, Chairman of the Coordination
for taking on their new responsibilities and then
Committee, introduced the new Sustainable
asked Ernesto López Anadón, IGU’s Immediate
Development Work Group, which aims to promote
Past President, to give a report on LNG16 in his
M E M BERS OF THE SUSTA I NABLE DE V ELOP M ENT W OR K G ROUP
50
A
Secretary General (Chair)
Mr Torstein Indrebø, Norway
Chairman of the Coordination Committee
Mr Ho Sook Wah, Malaysia
Chairman of PGC A – Sustainability
Mr Juan Puertas, Spain
Member nominated by the US Charter Member (AGA)
Mr Steven Kline, USA
Member of the Executive Committee
Mr Wang Guangjun, P.R. China
Member of the Executive Committee
Mr Carlos Eduardo de Freitas Brescia, Brazil
Member of the Executive Committee
Mr Evgueni Riazantsev, Russia
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capacity as Chairman of the Steering Committee.
for event organisers,” he said, “and we are also
As reported in the last issue of the IGU Magazine,
looking for new arenas such as the CNBC TV
the travel plans of many LNG16 delegates and
debates on energy opportunities.”
speakers were hit by the volcanic ash cloud which
Ernesto López Anadón then took the floor again,
paralysed air traffic in northern Europe from April
this time in his capacity as Chairman of the IGU
15 to 20, 2010, and the event had to be reorg
Research Conference (IGRC) Policy Committee, to
anised at the last minute. In the end, some 60% of
update delegates on preparations for IGRC2011
the people registered managed to attend. “All-in-
in Seoul (see pages 82-84). He also announced
all we had a successful conference in spite of the
that Denmark’s offer to host IGRC2014 in
difficulties,” said Ernesto López Anadón.
Copenhagen had been accepted. The hosts will
The President went on to announce that IGU’s Wise Persons Group would be expanded to
above and b e lo w
The 2010 Council meeting was held in Doha, Qatar.
be the Danish Gas Association and the Danish Gas Technology Centre.
include Dr Kandeh K. Yumkella, who is DirectorGeneral of the UN Industrial Development Organisation (UNIDO). He also chairs UN Energy and the UN Secretary-General’s Advisory Group on Energy and Climate Change (AGECC). The only representative of the gas industry in AGECC is Statoil’s CEO Helge Lund, who was instrumental in bringing Dr Yumkella on board the IGU body. “We are very pleased that Dr Yumkella has agreed to join the Wise Persons Group,” declared Datuk Rahim, “and we are proud to have the support of all these highly respected individuals”. Next up was the Secretary General, who detailed the conferences and events representa tives of IGU had participated in since the previous Council meeting. “IGU is a very attractive partner
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Looking further ahead, Datuk Rahim reminded delegates that the deadline for applications to take on the IGU Presidency for the 2015-2018 Triennium
Datuk Rahim then asked the CC Chairman to talk about IGU’s advocacy programme. “Gas appears to be losing ground against
would be January 15, 2011, while Torstein Indrebø
other fuels for the lack of a consistent and effective
explained that the application procedure had been
voice,” declared Ho Sook Wah, who explained
simplified and that instead of asking for letters of
that a number of issues had been identified, most
support the Secretariat would visit each applicant
particularly regional differences in the perception
and carry out a quality check.
of gas, the fact that the industry was more a policy taker than a policy maker, and that the old
l Communications and advocacy
description of gas as a bridging fuel suggested a
Opening the presentation on the development of
diminishing future role. “We have decided to ask
IGU’s communications strategy, Datuk Rahim said
PFC Energy to assist in developing a message,” he
that one of the messages of WGC2009 was the
said “and this advocacy programme will involve
need for the gas industry to raise its lobbying
every member of IGU. We will ensure that gas has
game. “The fuel without a voice will now get one,”
a voice.” He handed over to Terence Thorn to give
he declared.
delegates a detailed briefing on what will become
“IGU needs to adapt its communications strat egy to the challenges of the time,” said Torstein
a comprehensive final report. Terence Thorn is the President of JKM Consult
Indrebø before giving the floor to Erik Gonder who
ing and a gas industry veteran who amongst other
is in charge of communications in the Secretariat.
roles chaired the then Working Committee 9 dur
“We need to be more visible and we need to
ing IGU’s 2000-2003 Triennium. His key point was
talk not just to our own people but to the general
that far from being a mere transition fuel, gas has a
public as well,” declared Erik Gonder. “It’s also
permanent role in a sustainable energy economy.
clear we need more contact with the policymakers
”Natural gas does not support renewables; they
and regulators, while we try to work actively with
do not happen without natural gas,” he declared.
the press and to comment on gas events around
Other issues he highlighted included the need to
the world.” He said that as well as IGU represen
tackle those who claim gas is too expensive, the
tatives getting out and meeting people, it was
fact that when reaching out to people it is impor
important to develop the Union’s website and
tant to develop stories and images rather than just
publications strategy, and that to this end a survey
recite facts and figures, and the desirability of
had been sent out to IGU’s contact persons.
showcasing the industry’s technical achievements.
He outlined recent initiatives including the
He also suggested that carbon capture and
relaunch of the online interactive map with the
storage (CCS) should be considered for gas-fired
support of the Energy Delta Institute, which is one of
power stations not just coal-fired ones. He ended
IGU’s affiliated organisations, and the joint pub
with an appeal to delegates: “I need your
lication with Associate Member BP of the “Guide
feedback about what works in your area.”
book to Gas Interchangeability and Gas Quality”. At this point, Ieda Gomes who is the Head of New Ventures at BP Gas Marketing and chairs
The last item of business in the first session was a report on WGC2009 and a review of the 20062009 Triennium by Ernesto López Anadón.
Task Force 1, was invited to talk briefly about the
52
joint publication which she lauded as, “An oppor
l WGC2012
tunity to develop something where the result is
After the coffee break, Ho Sook Wah updated
more than the sum of the parts”.
delegates on the progress of the Technical
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Committees and announced that the call for papers for WGC2012 would be launched on February 1, 2011. There was a video address from the new Chairman of the NOC for WGC2012, Datuk Anuar Ahmad, who could not attend the meeting in person, and then Zahariah Abdul Rahman, CEO of WGC2012, took the floor to update dele gates. She said that some 5,000 participants were expected and that 10,300 m2 of exhibition IGU President Datuk Rahim addresses Council delegates. He is flanked by the Secretary General, Torstein Indrebø (l e f t ), and Vice President Jérôme Ferrier (right ).
space was available. The inter national delegate fee has been set at $3,200 with an earlybird discount of $500 for those booking by the end of 2011, while members of the Malaysian Gas Association will be eligible for a special rate of 3,000 ring git. She explained that the con ference and exhibition venues and the main hotels are all within walking distance of each other as part of the WGC2012 Concept Village which also
The Chairman, Ho Sook Wah (r i g h t ), and Vice Chairman, Georges Liens, of the Coordination Committee
includes a shopping centre. Following Zahariah Abdul Rahman’s presentation, the Council formally approved the concept for WGC2012. l Strategic Statement and
new members IGU’s 2010 Strategic Statement “Natural Gas for a Sustainable Energy Future” was presented to the Council, after which the Immediate Past President, Ernesto López Anadón (left ) and Honorary President, Hans Jørgen Rasmusen.
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President invited three of the four applicants for membership
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to make short presentations (RWE having sent its apologies for not being able to send a represen tative). Delegates then approved the application of the Asociación Mexicana de Gas Natural to become a Charter Member, and of ExxonMobil Gas & Power Marketing (USA), Origin Energy (Australia) and RWE Deutschland (Germany) to become Associate Members. As Bangladesh left the Union at the end of 2010, IGU now has a total of 109 members (74 Charter and 35 Associate) from 73 countries. The Secretariat continues its efforts to increase membership under IGU’s marketing plan, which has identified a number of countries and companies of particular interest. l Other business
As the most senior honorary official present,
Delegates approved IGU’s accounts for 2009 and
Hans Jørgen Rasmusen closed the main proceed
the budget for 2011, which includes an increase
ings and asked for a vote of thanks for the host.
in the annual membership fee. After having been frozen for several years at €4,500 it will now
l Afternoon session
increase to €5,000. Delegates also approved four
Following lunch the Council reconvened for the
new members of the Executive Committee: Yamina
third session, which followed the regular format
Hamdi (Algeria), Kenji Ikejima (Japan), Kap-young
of having a presentation from the host country
Ryu (Korea) and Andrew Wagg (UK). (After the
followed by a roundtable and general discussion.
meeting Algeria proposed that Nordine Cherouati
The theme for the roundtable was “Improving
would succeed Yamina Hamdi in 2011 and the UK
IGU’s Advocacy of Natural Gas”.
proposed Colin Lyle to succeed Andrew Wagg.) Jeanet van Dellen, Advisor to the Secretary General, updated delegates on IGU’s Gas
elopment of Qatar’s LNG business. He said that
Efficiency and Social Gas Awards, while Jay
a ceremony was planned for the end of the year
Copan talked about the preparations for LNG17,
to mark the achievement of an annual capacity
of which he is Executive Director. LNG17 will be
of 77 million tonnes (it was held on Qatar’s
held in Houston, April 16-19, 2013. There were
National Day, December 18), and that the market
also briefings by Jean Vermeire, President of the
split for 2011 would be 40% to Asia, 35% to
International Group of LNG Importers (GIIGNL),
Europe and 35% to North America. He rounded
Jack Lewnard, Vice President and Chief
off by declaring, “This is not the end; we will
Technology Officer of the Gas Technology Institute
continue to expand”.
(GTI), the writer as editor of the IGU Magazine,
56
Alaa Abujbara, Marketing Director of Qatargas, started the proceedings with a review of the dev
Next up was the IEA’s Senior Gas Expert, Anne-
and Dagmar Tomljenovic´. She was representing
Sophie Corbeau, who discussed the short-term
Charter Member the Croatian Gas Association,
impact of the economic downturn on gas demand
host of the 2011 Council meeting which will be
and examined the longer-term role of gas in the
held on October 6 in Dubrovnik.
future energy mix. “Gas will increasingly be used
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b e lo w
Datuk Rahim introduces the panel for the afternoon session.
to back up wind implying a need for flexibility in
enough to promote the benefits of what he called
transmission and storage,” she said. On the
“the blue fuel”.
supply side she highlighted the growth of LNG
Finally, Ben Cahill, Manager, Markets &
capacity, “Australia seems to be the new Qatar”,
Country Strategies Group at PFC Energy, looked
and the exploitation of unconventional gas, “UCG
at building an effective communications strategy
is definitely a global game changer”.
for the gas business. He stressed that a strategy
David Rimmer, Shell’s General Manager LNG
needs to be tailored to each region, it is important
CIS & Europe, talked about the need to promote
to ensure consistency of messages, partnerships
gas, highlighting that it is “abundant, affordable
should be used effectively and both the public
and acceptable”, what he called the three ”A’s”.
as well as policymakers should be targeted.
He said that the power generation sector has the
He talked about the need to evaluate the cost-
key role in terms of future gas demand, and
effectiveness of advertising campaigns, how
echoed Terence Thorn’s point from the morning
best to make use of IGU resources and how
session that CCS should be demonstrated in gas-
aggressively to target other fuel sources, and
fired power stations. “Replacing old coal-fired
introduced the acronym “CARES”, standing for
power stations with gas is the cheapest and
Clean, Affordable, Reliable, Efficient and Secure.
quickest way of meeting emissions targets,”
“Feedback from IGU members can shape this
he declared, and urged greater engagement
approach,” he said, “it’s important to understand
with stakeholders as part of a comprehensive
which messages will resonate”.
advocacy programme. Sergey Balashov, Deputy Head of Gazprom’s
Datuk Rahim closed the session by thanking the speakers and reiterated the call for feedback from
International Business Department, reinforced
members to help finalise IGU’s advocacy programme.
David Rimmer’s message, saying that the gas
The day was rounded off with a farewell dinner
industry was losing out to the coal and oil lobbies.
in Doha’s Museum of Islamic Art.
He said that gas is plentiful and offers the best combination is terms of cost and environmental
Mark Blacklock is the Editor-in-Chief of
friendliness but that the industry is not doing
International Systems and Communications.
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DR K ANDEH K . YU M K ELLA JO I NS I G U ’ S W I SE PERSONS G ROUP One of the important announcements during IGU’s 2010 Council meeting was the news that Dr Kandeh K. Yumkella had agreed to join the Wise Persons Group. Biography
Dr Yumkella is the Director-General of UNIDO, a specialised agency of the United Nations mandated to foster sustainable industrial development in developing countries and economies in transition. At the same time, UNIDO helps to protect the environment by supporting clean and sustainable technology. Dr Yumkella was elected to the post of DirectorGeneral in December 2005, and re-elected for a second four-year term in December 2009. Before assuming his current position, Dr Yumkella had worked in various high-level policy positions in UNIDO, and was Special Adviser to two previous Directors-General. He also served as Director of the Africa and LDCs Regional Bureau and as Representative and Director of the first UNIDO Regional Office in Nigeria. Prior to joining UNIDO, Dr Yumkella had served as Minister of Trade, Industry and State Enterprises of the Republic of Sierra Leone; as an Assistant Professor and Lecturer at the Michigan State University and Assistant to the Dean in the College of Agriculture at the University of Illinois. He has a Bachelors degree in Agriculture, a Masters in Agricultural Economics and a Doctorate in Agricultural Economics. Dr Yumkella is an active member of the UN system Chief Executives Board and is the current
Chair of both the UN Secretary-General’s Advisory Group on Energy and Climate Change (AGECC) and the UN-Energy Coordination Group. He is a strong believer that the most effective way to fight poverty is to strengthen the pro ductive capacities of countries and people, enhance their adaptive capabilities to use modern technology and devices, and to com mercialise new knowledge. He has advocated pro-poor industrial and agribusiness develop ment as sustainable means of wealth and job creation, and the economic empowerment of the poor. Working with IGU
After joining IGU’s Wise Persons Group, Dr Yumkella declared: “In order to achieve a goal of universal access to energy by 2030 we will need a change of pace and scale of actions on the ground and political commitment. A massive undertaking in infrastructure develop ment is required and this will need to include all forms of modern and clean energy techno logies. IGU and its members are well placed to help in the necessary technology expertise, know ledge sharing and private sector engagement.” His first public appearance on an IGU plat form was as a speaker at the Gas Event during COP16, which is reported on pages 162-166. Dr Yumkella’s colleagues in the Wise Persons Group are Professor Dr Coby van der Linde, Director of the Clingendael International Energy Programme, the Right Honourable Tim Eggar, Chairman of Nital Solar, and Dr Daniel Yergin, Chairman of IHS CERA. Kandeh K. Yumkella (far left ) is the new member of IGU’s Wise Persons Group joining Coby van der Linde (third left ), Tim Eggar (second left ) and Daniel Yergin (left ).
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Global Expertise | Innovative Technology | Measurable impact
l The idea – what is the “new“ element;
Deadlines Approaching for IGU Awards
l Costs of project implementation; l Benefits/savings of gas which have been/will be
realised by the project;
By Jeanet van Dellen
l Current project phase; and l Project implementation.
If you have not already done so, now is your
In addition a CV of the project author covering
chance to submit nominations for IGU’s Gas
no more than one A4 page should be included.
Efficiency and Social Gas Awards for the 20092012 Triennium.
The deadline for submissions for the IGU Gas Efficiency Award is July 1, 2011. They should be
IGU sponsors these Awards because energy
sent to: igugasefficiencyaward@igrc2011.com, for
efficiency and increasing the awareness of gas
the attention of Robert Badoux, Secretariat of the
efficient behaviour play a key role in achieving
IGRC2011 Technical Programme Committee (TPC).
a more sustainable energy future. The Awards
The first selection of the award submissions will
will be presented at the opening ceremony of
be made by a committee with experts from the
the 25th WGC in Kuala Lumpur, Malaysia on
TPC at IGRC2011 in Seoul, Korea in October
June 4, 2012.
2011. This expert committee is chaired by Marc Florette, Senior Vice President Research and
l IGU Gas Efficiency Award –
Innovation of GDF SUEZ. The three best proposals
submissions deadline July 1
will be forwarded for final evaluation and selection
Under the motto “Gas Efficiency – Leading into
of the winning proposal to the Evaluation
a Sustainable Energy Future” IGU is calling for
Committee consisting of:
new ideas and projects aimed at obtaining
l Datuk Rahim Hashim, President of IGU;
greater efficiency in the use of natural gas. IGU
l Nobuo Tanaka, Executive Director of IEA;
considers energy efficiency to be one of the
l Prof. Dr-Ing. Rainer Reimert, Engler-Bunte-
Institut, Karlsruhe University, Germany;
most important ways in achieving a more sustainable energy future, reducing greenhouse
l Ho Sook Wah, Chairman of the IGU
Coordination Committee; and
gas emissions, enhancing security of supply and
l Torstein Indrebø, Secretary General of IGU.
reducing energy-related costs.
The submissions will be evaluated according to
IGU members can propose projects related to gas efficiency that come from the gas
the following criteria:
industry, the academic sector or public or private
l Innovation: what is new about the proposal
(technology, process, methodology);
institutions. Submissions can have all kinds of backgrounds (technical, economic, etc.)
l Improved efficiency;
provided that they are new. They may already
l Energy savings;
have been published or implemented but not
l Cost feasibility (realised benefits/savings of
project vs. project costs/investments);
earlier than two years prior to the date of submission to IGU. For projects not yet
l Practical applicability; and
operating the submission has to detail how and
l Contribution to the image of the gas industry.
The decision by simple majority of the
when a project will be implemented.
60
Submissions should be no more than five A4
Evaluation Committee is final and will be made in
pages in length including a half page non-
February 2012. The Secretariat will inform the
technical abstract and elaborate on:
winner of the result in March 2012.
D e a d li n e s
A p p r oac hi n g
f or
IGU
Aw a r d s
l IGU Social Gas Award – submissions
The submissions will be evaluated according to
deadline September 1
the following criteria:
Under the motto “Encouraging Gas Efficient
l Innovation: what is “new” about the proposal;
Behaviour” IGU is calling for new ideas and
l Educational and behavioural aspects;
projects aimed at stimulating people to use gas
l Energy savings;
more efficiently. The proposed projects must have
l Cost feasibility (realised benefits/savings of
been implemented but not earlier than two years before the date of submission to IGU. IGU members can propose projects from both the public and private sectors including those
project vs. project costs/investments); l Practical applicability; and l Contribution to the image of the gas industry.
The decision by simple majority of the
developed by public authorities, schools, univer
Evaluation Committee is final and will be made in
sities, social institutions, professional associations
February 2012. The Secretariat will inform the
and companies. Submissions should be no more
winner of the result in March 2012.
than five A4 pages in length including a half page non-technical abstract and elaborate on:
l Prizes
l The idea – what is the new element;
For each Award there will be a cash prize of
l Educational method and behavioural results;
$5,000. In addition, the authors will be invited
l Costs of project implementation;
to WGC2012 with free registration for the con
l Benefits/savings of gas which have been
ference and travel (economy class) including
realised by the project;
accommodation expenses. Both winning projects
l Current project phase; and
and their authors will be featured in the autumn
l Project implementation.
2012 edition of the IGU Magazine and on the
In addition a CV of the project author covering
IGU website.
no more than one A4 page should be included. The deadline for submissions for the IGU Social
l Wider aims
Gas Award is September 1, 2011. Anyone who is
Apart from the direct benefit of fostering energy
also submitting material for WGC2012 can use
efficiency, organising these Awards helps to raise
the conference website (www.wgc2012.com).
IGU’s profile as a socially responsible organi
Those people who are only submitting proposals
sation, strengthen ties with academia, public sector
for the IGU Social Gas Award should send them
bodies and industry, and promote gas as part of
to: igusocialgasaward@wgc2012.com, for the
the solution to a sustainable energy future.
attention of Mrs Naiara Ortiz de Mendíbil Romo,
All IGU members are encouraged to nominate
Secretariat of IGU Programme Committee (PGC)
entries for this Triennium’s Awards and should you
A – Sustainability.
require any further information please do not
The first selection of the award submissions
hesitate to contact the Secretariat or visit:
will be made by a sub-committee of experts from
l www.igu.org/knowledge/gas (both awards);
PGC A – Sustainability in January 2012. This
l www.igrc2011.com/igu-gas-efficiency-award
expert committee is chaired by Juan Puertas, Director of Engineering and Technology of Gas Natural Fenosa. The three best proposals will be
(IGRC2011 and IGU Gas Efficiency Award); l www.wgc2012.com (25th World Gas
Conference and IGU Social Gas Award).
forwarded for final evaluation and selection of the winning proposal to the same Evaluation
Jeanet van Dellen is the Advisor to the Secretary
Committee as for the Gas Efficiency Award.
General and can be contacted at jvde@statoil.com.
D eadl i nes
Approach i ng
for
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Aw a r d s
61
News from Organisations Affiliated to IGU
European gas industry. Marcogaz and GERG are both affiliated to IGU and participate actively in the Union’s work. EGATEC2011 is hosted by the Danish Gas Technology Centre (DGC), which is also very active in IGU committees and conferences.
In this issue we have reports on EGATEC2011,
The organisers are grateful to IGU for sponsor
which is organised under the joint auspices of the
ing the event and especially to IGU President
European Gas Research Group (GERG) and
Datuk (Dr) Abdul Rahim Hashim for giving the
Marcogaz, from Gas Infrastructure Europe (GIE),
opening keynote speech. The conference is the
NGV Global (International Association for Natural
successor to the European Forum Gas.
Gas Vehicles) and the Pipeline Research Council
The conference programme is built on the
International (PRCI), while the International Group
theme “Gas Innovation for a Greener Europe”.
of LNG Importers (GIIGNL) has contributed an
Natural gas will increase its importance in
article to the features section.
Europe’s energy mix in the foreseeable future and will play an important long-term role in a less
l European Gas Technology Conference –
carbon-intensive energy system. The conference
EGATEC2011
examines how natural gas and other energy gases
By Peter I. Hinstrup
(e.g. biomethane) combine to create a greener
The European Gas Technology Conference –
gas system without relaxing strict requirements in
EGATEC2011 – will take place in Copenhagen,
terms of security of supply, efficiency and safety.
Denmark, May 12-13.
EGATEC2011 is very much in line with IGU’s
EGATEC2011 is organised under the joint aus
natural gas advocacy programme.
pices of Marcogaz and GERG, together represent ing the complete technological branch of the
In addition to Datuk Rahim, Anders Eldrup, CEO of DONG Energy, Denmark, Simon Blakey, Special Envoy of Eurogas, and David Caroll, CEO of the Gas Technology Institute, are giving keynote speeches. The technical sessions look at the latest technology and discuss the strategy of the natural gas industry. Key issues include: l Smart gas: a reality for the gas industry? Gas &
electricity, smart metering, smart gas grid, auto matic meter reading. l Biomethane technology for a greener Europe.
Biogas upgrading, injection, synergies with natural gas, GoBiGas-project, contaminants in biogas. l Opportunities for the gas industry in carbon
capture and storage (CCS). Gas-fired power plants with CCS, transport and storage of CO2. l Asset management, a new approach. Asset
management, pipeline inspection, automatic aerial surveillance of pipelines.
Copenhagen is the venue for EGATEC2011.
64
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O r ga n i s ati o n s
Aff i li ated
to
IGU
l New green gas technologies for domestic and
l GIE and the Changing Gas World
commercial use. Gas heat pumps, renewable,
By Abel Enríquez and Astrid Dolak
micro-CHP.
Gas Infrastructure Europe (GIE) represents the
A special roundtable on “Natural gas in the
interests of the infrastructure sector of the natural
renewable energy world” will be chaired by Marc
gas business covering operators of transmission
Florette, Senior Vice President of Research &
systems, storage systems and LNG terminals. GIE
Innovation at GDF SUEZ. Other panellists will be
currently has 66 members in 26 European coun
the President of GERG, Enrique Palomino Bilbao,
tries and one of its objectives is to voice the views
Hisao Watanabe (Senior Executive Officer, R&D
of members vis-à-vis the European institutions, the
and IT, Tokyo Gas), Bjarke Pålsson (CEO,
regulators and other stakeholders. Its mission is to
Naturgas Fyn, Denmark) and Jeremy Bending
actively contribute to the construction of a single,
(Director of Distribution Network Strategy,
sustainable and competitive gas market in Europe
National Grid, UK).
underpinned by a stable and predictable regu
GERG will hold its 3rd Academic Network Event in connection with EGATEC2011 and this means that 20 posters on the latest gas R&D work will be
latory framework as well as by a sound investment climate. After the Third European Energy Market
presented by their authors during the conference.
Package came into force, new developments and
Special prizes will be awarded to outstanding
challenges in the energy world led to changes
papers. In addition there will be a small exhibition
in the structures of companies and consequently
of gas-related services and equipment.
also to the bodies representing the interests of those companies. As a Third Package require-
GERG and Marcogaz events
ment the European Network of Transmission
GERG will celebrate its 50th anniversary in con
System Operators for Gas (ENTSOG) was founded
nection with EGATEC2011. A special presentation
out of GTE in December 2009 and now works as
will be given on “How R&D and GERG have been
a standalone organisation. Its aim is to deliver the
helping the introduction of new gas technologies
obligations of the Third Package as defined in the
during the last 50 years”.
Gas Regulation and therefore to further the
Marcogaz will also hold its annual general assembly in Copenhagen the day before
completion of the internal gas market. GIE continues to focus on policy developments
the conference.
in the energy sector and works towards securing a level playing field for the best development of
See you in wonderful springtime Copenhagen
gas infrastructure in the European market, while
The conference organisers cordially invite you to
bringing together the broader view of all infra
join them in Copenhagen for a landmark confer
structure operators.
ence that will clearly demonstrate the commitment
Energy will stay at the top of the European
of the European gas industry in creating a greener
agenda in 2011. The President of the European
Europe through gas innovation. And while the
Commission (EC) recently called energy policy the
focus is on Europe, delegates from the rest of the
next “great European integration process” whilst
world are of course warmly welcome.
energy was one of the two main themes of the first European Council this year. The Energy 2020
Peter I. Hinstrup is the President of the Danish Gas
Strategy is being discussed as well as the Energy
Technology Centre (www.dgc.dk). For information
Roadmap 2050 and new Energy Infrastructure
and registration visit: www.egatec2011.dk.
Instruments. The EC is indeed right in its
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Technip: LNG from design to delivery Technip, in JV, has completed construction of the world's six largest LNG trains (7.8 Mtpa each) through EPC contracts with Qatargas 2 (Trains 4 and 5), RasGas 3 (Trains 6 and 7) and Qatargas 3 and 4 (Trains 6 and 7). With these projects, Qatar will become the world’s largest LNG producer with some 77 Mtpa. Through its Yemgas JV, Technip has also completed a major lump sum turnkey contract with Yemen LNG Company Ltd (YLNG) for the country's first LNG plant. YLNG Train 1 started-up in October 2009, Train 2 in April 2010. Both have been producing steadily ever since. At the other end of the scale, Technip is building a 2-train mid-scale liquefaction plant in China. In the floating LNG (FLNG) market, Technip in consortium, signed in July 2009 a frame agreement for 15 years with Shell for the development of FLNG solutions and projects. Shell awarded Technip another 2 contracts for the Prelude project FEED, and the unit construction terms, if the Prelude project receives FID. In December 2009, Petrobras awarded Technip a FEED contract for a proposed FLNG (design competition). Preparing the next generation of onshore LNG plants, Technip is performing engineering studies, pre-FEED's and FEED's, for several projects in Australia, Russia, and elsewhere. Continuous R&D activities allow Technip to offer innovative solutions for the benefit of investors in LNG production plants: Efficient Nitrogen Removal process applied in several Middle East projects CryomaxŽ. Deep NGL extraction integrated into the liquefaction scheme Highly efficient refrigerant evaporators and condensers in association with tube manufacturer Wieland Increased LNG production with the MLP gas phase sub-cooling cycle Cryogenic pipe-in-pipe, flexible pipe and offshore transfer systems that can greatly simplify marine infrastructure.
Technip is a world leader in the fields of project management, engineering and construction for the oil & gas industry, offering a comprehensive portfolio of innovative solutions and technologies. With 23,000 employees around the world, integrated capabilities and proven expertise in underwater infrastructures (Subsea), offshore facilities (Offshore) and large processing units and plants on land (Onshore), Technip is a key contributor to the development of sustainable solutions for the energy challenges of the 21st century. Present in 48 countries, Technip has operating centres and industrial assets (manufacturing plants, spoolbases, construction yard) on five continents, and operates its own fleet of specialised vessels for pipeline installation and subsea construction. The Technip share is listed on Euronext Paris exchange and over the counter (OTC) in the USA.
54 Mtpa of new LNG capacity
Thanks to our engineering, procurement and construction management teams, our Clients, our suppliers and our partners, Technip has completed multiple parallel LNG projects in the period 2008 - 2010: the world’s six largest LNG trains in Qatar the two-train Yemen LNG export terminal
www.technip.com
communications to call energy “the life blood of
gas demand will increase significantly. Additional
our society” and the energy infrastructure “the
natural gas infrastructure provides the flexibility
central nervous system”.
which is required.
Gas infrastructure: highway to a low-carbon
their “central nervous system” even better and to
economy
contribute to the functioning of a sustainable,
Europe’s gas infrastructure links sources and
competitive and secure EU gas market. This will
markets allowing diversification and competition in
undoubtedly mean reducing CO2 emissions in an
gas supply. This infrastructure based on market
equitable way across the EU. But a low-carbon
demand is the foundation of the current inter
economy does not have to mean an economy with
connected European gas system and the basis of
less gas. Decarbonisation is a requirement of the
an efficiently functioning and integrated energy
energy produced and does not contradict a con
market. It accommodates increased competition
tinued use of natural gas.
GIE and its members are committed to make
Natural gas is the cleanest, most efficient and
between sources and suppliers of gas. This com petition in the wholesale market ensures more
versatile of the fossil fuels, making it a unique
choice and more efficient price setting for
choice in the path towards a lower carbon energy
end customers.
mix and sustainable future. More importantly, the
To ensure the functioning of the European gas
abundance of natural gas, its competitive cost of
market over the next decades, new infrastructure
supply, its immediate availability and the flexibility
and interconnection capacities will need to be dev
to enable renewable energy clearly favour it as the
eloped to enhance market integration, accommo
best source to address emission reductions at the
date declining domestic production and provide
lowest cost.
the necessary back-up for renewable energy pro duction. Even if gas demand in the EU does not
Activities of GIE
reach the same growth rates as in previous
In addition to its various activities on policy dev
decades, significant gas infrastructure develop
elopments and the goal to promote natural gas
ment will still be needed for flexibility and security
and gas infrastructure, GIE is a key stakeholder in
of supply purposes.
the European Gas Regulatory Forum. This
Against this backdrop, it is important to high
so-called “Madrid Forum” addresses the key issues
light that gas infrastructure development is not
relating to the creation of an internal market for
driven by the level of overall gas consumption,
energy in the European Union. GIE is a permanent
but by the capacity needed to meet peak demand,
member of the Gas Coordination Group, the
and the latter is expected to increase significantly
European platform with the goal to facilitate the
as a result of the rise in installed gas-fired
coordination of security of supply measures at
power generation.
Community level. GIE is represented in the
We are moving towards an EU market where
Thematic Network on Critical Energy Infrastructure
renewable energy is subsidised and promoted.
Protection and gives its members a platform to
Due to their operational features, gas-fired power
exchange information on security issues relating to
plants have proven to be an affordable back-up
gas transport throughout Europe. Every year GIE organises a conference
for renewables. However, as long as new combined-
68
cycle gas turbines (CCGTs) are necessary to com
focusing on important energy and gas
plement the power intermittency of renewables,
infrastructure topics, which always attracts
both the need for flexibility and the expected peak
many market players. More than 300 delegates
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attended last year’s conference in Vienna, which focused on security of supply and related issues. The 2011 Annual Conference will be hosted by National Grid and South Hook LNG in Edinburgh on June 23 and 24. Speakers from across Europe will discuss how to facilitate the building of necessary gas infrastructure as a highway to a low-carbon economy. GIE is in constant liaison with other associations including ENTSOG, Eurogas, the European Federation of Energy Traders (EFET) and Marcogaz. With IGU, GIE signed a cooperation agreement to become an affiliated organisation in June 2006 on the occasion of the 23rd World Gas Conference. GIE and its members participate in most IGU events to ensure that the important role of the natural
GIE’s 2010 conference was held in Vienna, June 24-25.
gas infrastructure is recognised in IGU’s work The Aggregated Storage Inventory Levels (AGSI)
and its related activities. Representing the interests of the infrastructure
data platform is a voluntary initiative of GSE
industry in the natural gas business, GIE is also the
members to publish the storage working gas
umbrella organisation for its three subdivisions:
levels, as well as injection and withdrawal rates, in
Gas Transmission Europe (GTE), Gas Storage
an aggregated format per hub area. This initiative
Europe (GSE) and Gas LNG Europe (GLE). Within
provides the market with the information it needs
GIE, these subdivisions also carry out their own initiatives and activities. Aggregated Gas Storage Inventory Publication of Daily Gas Storage data grouped by Hub Area
Gas Transmission Europe The GTE activities have been transferred to
GIE MEMBER
ENTSOG. GIE will continue to develop lobbying
NBP
activities for all the infrastructure operators
TTF (EUROHUB)
in Europe, including transmission system
PEG
operators (TSOs).
PSV GERMANY
Gas Storage Europe
BAUMGARTEN
GSE focuses on the promotion of the gas storage
IBERIAN
business as a main contributor to security of
ZEE
supply and flexibility, especially in a low-carbon economy with intermittent electricity production. In recent years, GSE has also been contributing to both the transparency and security of gas supply to Europe whilst ensuring a proper investment framework in the EU.
GSE publishes a daily gas storage inventory by hub area.
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69
on a daily basis whilst protecting commercially
GSE also interacts strongly with the EU institu
sensitive information. GSE recently presented the
tions and EU regulators. For example,when the
latest AGSI developments to the Gas Coordination
European Regulators’ Group for Electricity and
Group and for more information, please visit
Gas (ERGEG) carried out a public consultation
http://transparency.gie.eu.com.
related to its proposal to amend the Capacity
The information provided by GSE on its
Allocation Mechanism & Congestion Management
transparency platform is complemented by the
Procedures (CAM & CMP) provisions from the
GSE map and GSE investment database.
Guidelines for Good Practices for Storage System Operators, GSE published a position paper outlining the main findings and conclusions of the GSE questionnaire on CAM & CMP practices. The conclusions of this study were presented at the Madrid Forum last year. Gas LNG Europe The importance of LNG as a significant contributor to security and diversification of supply in the European gas market is increasing. GLE is con tinuing efforts to promote recognition for LNG infrastructure activities at European level as well as the proper legislative and regulatory framework for the LNG industry in Europe. While doing so, GLE seeks to ensure that LNG business specificities are taken into account in any future EU regulatory developments. In November 2008, as part of its regular cooperation with other stakeholders, GLE became a co-signatory of the “Protocol for the coordination of activities and the exchange of information among LNG organisations”. Signatories (including IGU) seek to share useful information and coordi nate their activities so as to create synergies and avoid overlaps. Apart from periodical interactions with EU institutions and national regulators, and apart from the active contribution to several regulatory developments and fora in the EU (e.g. the ERGEG study on CAM & CMP for EU LNG Terminals and presentation to the Madrid Forum), GLE has recently published a well-received study on LNG supply disruption scenarios. This study was
GLE focuses on Europe’s LNG infrastructure – the Enagás receiving terminal in Cartagena.
70
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developed following an invitation from the Gas Coordination Group to carry out LNG disruption
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SNC-LAVALIN CONSTRUCTION DESIGNING AND BUILDING FOR SAFETY, QUALITY AND SUSTAINABILITY
SNC-Lavalin’s oil & gas activities cover the full spectrum relating to the production, transportation, processing, upgrading and delivery of conventional energy resources, chemicals, petrochemicals and synthetic fuels.
www.snclavalin.com
scenarios simulations. The GLE LNG Disruption
Despite outstanding improvements in vehicle
Task Force finished the risk analysis of the whole
efficiency and massive growth in the use of
LNG gas chain considering three different
alternative fuels and powertrains, hybrids in
scenarios (no LNG from Algeria, no LNG from
particular, emissions continue to rise. This is simply
Nigeria and no LNG from Qatar) and assessing
a result of the increasing vehicle population
the final impact of those interruptions on the EU
around the world.
gas market. The final results for the supply disrup
At the NGV India conference held in Mumbai
tion analysis (including the network simulation),
in November 2010, delegates heard projections
together with the main conclusions, were jointly
from vehicle manufacturers that annual vehicle
presented by GLE and ENTSOG during the Gas
sales will double by 2015 to more than 4 million
Coordination Group Task Force meeting held on
units per year. Some estimates suggest that by
November 9, 2010. This study, together with the
2030, the total vehicle population in India will
GLE map and the GLE investment database are
exceed 300 million vehicles. That is at the extreme
available at the GIE website.
end of the growth spectrum but growth continues everywhere, making some of the efficiency gains a
Future cooperation
hapless struggle.
GIE represents the vast majority of gas infrastruc
Meanwhile, governments around the world
ture operators in Europe and is a well established
continue to come to grips with the challenges of
promoter of natural gas in the energy world of
reducing greenhouse gases. The focus seems to
the future.
be on cost and, to a large degree, avoidance.
In this context GIE is keen to cooperate with
The perception appears to be that greenhouse
other energy associations, institutions and bodies
gas reductions create economic disadvantage.
to contribute to achieving energy sustainability in
As a result, climate change strategy seems to
the future.
be a battle to see who can be disadvantaged the least.
Abel Enríquez is Executive Secretary and Astrid
This has created unprecedented changes to
Dolak is Vice Executive Secretary of GIE
energy industries worldwide. For the natural gas
(www.gie.eu).
industry the major opportunity has clearly been in electricity generation. This sector requires large
l NGV Global Pushes the NGV
investments but in general these are proving to be
Greenhouse Advantage
well justified.
By Brett Jarman
There is one major opportunity however, which
While the greenhouse advantages of natural gas
to date has been flying under the radar of govern
vehicles are generally well known, what isn’t really
ment decision-makers and the majority of the gas
appreciated, even by the natural gas industry, is
industry worldwide, particularly in developed and
the scope of benefits that NGVs have to offer.
OECD nations.
Following is a summary of the message we have been driving recently, including at the IGU-
realised, is that NGVs have the capacity to reduce
Worldwatch Symposium in conjunction with
greenhouse gas emissions on a scale that no other
COP16 and at the UN Working Party on Gas in
transport fuel or technology can even come close
Geneva, Switzerland.
to. They can do so with a net economic benefit to
It’s no secret that transport related greenhouse gas emissions are rising dramatically.
72
What both groups of stakeholders have not yet
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all involved, including the owners and fleet oper ators who use the vehicles.
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NGV benefits One of the advantages that natural gas has over other fuels and technologies is the range of appli cations in which it can be used as pretty much anything that operates on an internal combustion engine can either be built or converted to run on natural gas. Per vehicle emissions reductions will vary according to the source of the vehicle but typically range from 10% to 30%. And if we factor biomethane into the equation, the benefits are increased dramatically. One way of realising the benefits of natural gas is by converting existing vehicles so that the current vehicle fleet can be used to reduce its own emis sions. This is a benefit that tends to be understated but is in fact quite significant. In order to realise the benefits of an electric or hybrid vehicle, for example, either an existing vehicle has to be replaced or a new vehicle added
The role of gas as a marine transport fuel is set to increase. The Bit Viking operates for Statoil and is one example of a ship being converted to run on LNG.
to the overall fleet. Further, this means that the
these options are a long way off from being truly
technology can only be phased in over the normal
“zero emissions” on a life-cycle basis, and even
life cycle period of a vehicle, otherwise it creates
from being technically or economically viable or
an additional environmental burden. In most
functional on a large scale.
cases, that would mean a phase in period of
The temptation to wait for utopia remains
10-20 years (depending on where you are in the
though and many, particularly in political circles,
world) to reach a particular market penetration or
wait for tomorrow rather than taking action with
fuel replacement target.
what works, and what is already proven, today.
With NGVs though, you can set a target and
Our message is simple – we don’t have the luxury
tackle it at both ends of the spectrum – through
of time to wait for a utopia that might or might not
natural attrition as new vehicles come on the road,
come so let’s work with what we’ve got – now.
and through the conversion of existing vehicles already on the road. This has been the funda
Marine applications
mental reason why countries such as Pakistan and
I have already mentioned the variety of appli
Iran have been able to get more than 2 million
cations of natural gas as a transport fuel but the
NGVs on the road in such a short space of time,
marine sector is worth highlighting, a) because its
only eight or nine years. There is no reason why
contribution to environmental degradation is vast
those successes can’t be duplicated in almost any
and b) because it’s matched in equal measure by
market in the world.
opportunity, both for greenhouse gas reductions
There are plenty of alternative fuels and tech nology options out there that are proving to be
and for business for the natural gas industry. For decades the marine sector has been using
quite seductive with their promise of “zero
cheap but heavily polluting bunker fuel. This fuel
emissions” – hydrogen fuel cell and electric
often has a sulphur content of 40,000 parts per
vehicles in particular. The reality of course is that
million or more. On land meanwhile, most truck
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73
CRUDE O I L D I SPLACE M ENT BY ALTERNAT I V E FUEL V EH I CLE ( AF V ) TYPE
Regardless of the benefits you are after, be they greenhouse reductions, energy security, air quality improvements etc., the aim of the game in trans port is oil displacement. Though the relative bene fits on a percentage per vehicle basis may be marginal between some of the options, the overall accumulated result from natural gas outstrips all other options by a vast order of magnitude. The term that’s often used in these discussions is that ”there is no silver bullet”, meaning there’s no single solution that will resolve all of our trans port energy related issues. We of course agree with this point but can honestly say the NGV bullet is at least 80% silver.
Notes: E85 = ethanol, B100 = biodiesel, NEV = neighbourhood electric vehicle
Our argument therefore is, let’s put the bulk of resources to where the bulk of results occur. When setting policy or investment priorities, let’s dedicate
above
Figure 1.
ing sectors have moved to or are on their way to
them to the solution that is proven to have not just
only 50 parts per million. Much of this pollution
the capability, but also the capacity to address the
makes its way to land or to the upper reaches of
problem on a scale that no other can match.
the atmosphere.
When we look at a table of established NGV
The tide is changing though and LNG is proving to be an enticing option for maritime use.
users, what’s striking is the absence of OECD nations, with the one notable exception being Italy.
Some experts are predicting that by 2020 more
While OECD governments, and others, con
than 50% of new shipping orders will be LNG
tinue to argue about who should be disadvant
fuelled and that by 2030, the majority of fuel used
aged least in terms of climate change strategy,
in the sector will be LNG.
those which are by far the most responsible for transport related emissions continue to ignore the
Gas outstrips other options
one solution that can deliver results on a massive
Natural gas is abundant, available and offers
scale and without economic disadvantage.
maximum crude oil displacement. This final point
Natural gas vehicles are the low hanging fruit
in some ways is the most important and shows the
of greenhouse reduction strategies. They are ripe
strength of adopting fuels and technologies for the
and they are ready for plucking. Not only do
heavy-duty sector and the magnitude of benefits
governments need to wake up to this but also the
arising as a result.
gas industry needs to step up to the plate and start
The data in Figure 1 is sourced from the US Department of Energy, Clean Cities Coalition. The
investing resources so they, and the community they serve, can reap the benefits.
yellow bars represent numbers of vehicles using a
74
particular fuel and the blue lines the amount of
Brett Jarman is Executive Director of NGV Global,
crude oil displaced. We have added hybrids at the
the international umbrella organisation repre
end using data from elsewhere in their study.
senting the natural gas vehicle industry
Though it is a powertrain rather than a fuel, the
(www.ngvglobal.org, www.iangv.org,
relativity of oil displacement is also relevant.
www.ngvglobal.com).
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JUNE 6. - 7. OSLO - NORWAY
WWW.EGC2011.COM
Come to the 16th European Gas Conference in Oslo and be enlightened by stimulating debates and round table discussions with energy industry experts, politicians and environmentalists – all trying to tackle the issues below. Session 1 : Bringing Norwegian gas to Europe Will Norway be a key supplier in the future gas supply mix in Europe? 2011 marks the 10th anniversary of Gassco. Session 2 : Natural Gas in a low carbon Europe Some say it is part of the solution, some say it is part of the problem - can it be both at the same time? Session 3 : Gas sources – origin and use Can new sources of gas be unlocked? What is the potential in the European transportation sector?
Confirmed speakers
Terje Riis-Johansen
Gerhard Schröder
Charles Hendry
Patrice de Viviès
Minister of State, UK
Former German Chancellor
HELLI - Visuell kommunikasjon www.helli.no
Minister of Petroleum and Energy
Senior Vice President, Northern Europe, Total Exploration & Production
Organizer
The Norwegian Gas Association
Sponsored by
l Pipeline Safety and Pipeline R&D
By Cliff Johnson Recent pipeline failures in the US have highlighted the need to develop a strong collaborative research programme. The members of the Pipeline Research Council International (PRCI) have a long history of participating in a collaborative research programme that strives to ensure environmental safety and pipeline integrity. The goal of oil and natural gas pipeline operators is zero leaks or failures and through the research programmes at PRCI, companies are addressing of some the most pressing challenges facing the pipeline industry. PRCI is a non-profit research organisation that is comprised of 33 energy pipeline operating companies located in the United States, Europe, Canada, South America and the Middle East.
Cliff Johnson, PRCI President.
Augmenting the pipeline membership are 24 The real value of collaborative research is the
Associate Members drawn from companies in the US, Europe, Canada, China, Mexico, Japan and
contribution it makes to assuring that the pipeline
Australia that serve the industry as pipe and
industry’s multi-billion dollar investment in prac
equipment manufacturers, service providers
tices, tools and equipment to assure safety, reli
and vendors.
ability and productivity is based on sound science
Pipelines remain the safest mode of trans
and technology. Over the years, PRCI has
portation; however, any failure is unacceptable. In
researched many of the challenges that have
light of recent high-impact pipeline failures, it is
faced the industry and we look forward to con
important that the industry work collaboratively to
tinuing to find the solutions that will increase the
find solutions to issues facing these critical assets.
safety of these vital assets. Our 2011 research
With the ongoing increase in the demand for
programme of over $8 million directly funded by
energy, we will continue to expect more from the
members (see Figure 2) adds to a solid basis on
pipeline infrastructure, but in meeting that demand
which to develop the solutions that the industry will
we must assure that pipelines operate in a safe,
need to continually improve performance. The
reliable and environmentally benign manner. PRCI
following section highlights a number of specific
members have noted how critical and timely a
initiatives in 2011 that will advance the energy
collaborative approach is.
pipeline industry:
The San Bruno failure in California has demon
l Corrosion – review the performance of fusion
strated that there is a greater need to be more
bonded epoxy (FBE) coating; improving the
involved in collaborative research and the mem
internal corrosion threat guidelines;
bers of PRCI continue to work to leverage their
development of grinding limits guidelines for
dollars and personnel to provide the R&D
repair of stress corrosion cracking (SCC) on
programmes that industry needs to ensure the
operating pipelines.
integrity of our global pipeline system and to
l Design, materials and construction – expanding
PRCI’s On-bottom Pipeline Stability Analysis
protect public safety.
76
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tools; relationship between welding procedure/
PRC I 2 0 1 1 RESEARCH PRO G RA M M E
parameters and the mechanical properties of the girth welds; subsea applications of weld overlay pipe. l Operations and integrity – continued focus on
nondestructive inspection technologies; field tests to evaluate and quantify the performance of leak detection technologies; multiple programmes addressing pipeline damage prevention. l Compressor and pump station – liquid pumps
mechanical seals; catalyst-based after-treatment technologies; minimising gas compressor cylinder lubricating oil consumption; complete
possible mechanical integrity test based on gas
an evaluation of a gas turbine field main
expansion cooling.
above
Figure 2.
These projects are just a small part of the over
tenance package. l Measurement – assessment of the auto-adjust
all PRCI R&D programme that is aimed at address
and self-checking capabilities of dual rotor
ing the needs of the industry. It is important that
turbine meters; cost-effective orifice meter
we continue to work to address the challenges
performance diagnostic tools; extend the Meter
facing the industry and to reassure the public of
Station Design Tool capability; develop low
the safety of this vital infrastructure.
cost, distributed gas quality sensors using crossover technologies.
Cliff Johnson is the President of the Pipeline
l Underground storage – field test of an improved
Research Council International (www.prci.org).
brine string stiffener in a salt cavern; cement
If you are interested in joining PRCI please email
bond log inspection tools; development of a
info@prci.org.
Pipeline workers are working to ensure the integrity of the pipeline system.
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Excellence in gas A sure guide in a changing world of energy Established in 1927, KEMA is an independent knowledge leader, operating globally and specializing in high-quality solutions to the entire energy value chain. We are actively engaged in advancing the evolving energy system. For over 40 years, our gas services group has served as a true knowledge center for gas infrastructure and utilization.
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contributing to operational excellence. We work to enable efficient and safe utilization of natural and green gases, and the integration of gas and electricity within smart grids. > Gas Infrastructure & Transport – We provide knowledge and experience in the form of research projects, consulting solutions and technical services throughout the infrastructure life cycle. We create shareholder value through a comprehensive package of integrity, safety and performance services for pipelines and installations. > Gas Quality & Flow – We have extensive experience with the response of end use equipment to changes in gas quality, separation methods, gas odorization, gas metering equipment testing and calibration, the dynamic behavior of gas in high-pressure transmission grids, and the performance of gas engines and turbines for both transport and combined heat and power.
www.kema.com
Gas in a changing world of energy With climate change high on the political agenda, the gas world faces the challenge of redefining its role. Through innovation, gas can play – and needs to play – a pioneering role as a transitional and sustainable fuel. Operating under the motto, “cleaner, smarter and more efficient,” energy knowledge company KEMA is contri buting to the realisation of these necessary changes. “The gas industry is going to be a key player in the transition to a more sustainable energy economy, provided that it adopts a smart, innovative approach,” asserts Pierre Bartholomeus, Global Director of Gas Consulting Services at KEMA. “In a world where electricity and gas are growing ever closer, gas is both a transitional fuel and a destination fuel.” Natural gas can also become more sustainable through the addition of, for example, biogas or hydrogen. v Carbon footprint reduction The gas industry’s contribution to securing climate objectives begins with the reduction of its own opera tional carbon footprint. That means cutting not only the carbon emissions associated with production and end use, but also those associated with gas transport. Carbon footprint reduction is about finding win-win oppor tunities: reducing emissions and improving energy efficiency while also cutting operating costs. Efforts to reduce corporate carbon footprints focus on CO2 equi valent emissions. “Our services in this field range from developing company policies and strategies to imple menting relevant measures,” stresses Bartholomeus. “In our policy development work, we always seek to align footprint control with government policies, overall company strategy and business economics. We advise on how to formulate a corporate ambition that is not only measurable, but also consistent with technical possi bilities, economic constraints and environmental objectives.” Furthermore, technical innovation in operations, as can be gained through re-examination and re-optimisation of the performance of installations and equipment, such as gas compression and gas heating installations, can be important for achieving significant footprint reductions. “Through innovative technologies, such as new simulation tools, it is possible to assess efficiency measures and other operational changes real
In a world where electricity and gas are growing ever closer, gas is both a transitional fuel and a destination fuel.
istically,” Bartholomeus says. “Reduction options can be directly linked to daily operations and their potential explored in a meaningful way. Implementation support is crucial to help companies realise their carbon foot print reduction ambitions and support their communi cation strategies, where claim-and-proof is important.” v Injection of green gas The next step is to make gas more sustainable. Energy doesn’t have to come from wind, water or the sun to be sustainable. “People often overlook the fact that gas can be a sustainable fuel,” observes Bartholomeus. “Nevertheless, green gas projects are popping up like mushrooms all over the world. A number of important conditions need to be met, however, for biogas to be transported and used in the natural gas grid.” Green gases from biomass digestion consist mainly of CH4 and CO2, but also contain a wide variety of other chemical and biological components. Some of these components can be corrosive or toxic, or can affect the quality of products made from (natural) gas. Furthermore, the flame properties of green gases can be very different from those of natural gas. “Several studies have been carried out with the aim of facilitating the injection of green gases into the natural gas infrastructure,” Bartholomeus states. “The general conclusion is that injecting purified biogas from digestion processes into the natural gas grid has no adverse implications either for the integrity of the natural gas grid or for the safety and health of end users,
as long as the composition of the green gases meets the relevant specifications.” Under some circumstances, the treatment processes required to bring raw gas into line with grid quality requirements (e.g. calorific value, Wobbe Index) may be sufficient to reduce the hazards to acceptable levels. Under other circumstances, special treatment processes may be required to satisfy additional specifications. Nevertheless, the effectiveness of the treatment needs to be verified by checking and by operating a Quality Assurance system. v Safe CO2 transport In the transition to a sustainable energy economy, coal and natural gas will remain important electricity generation fuels for some time to come. Although natural gas is a relatively clean fuel, its combustion does result in the release of CO2. So the development of innovative techniques for extracting CO2 from flue gases is very important. KEMA is active in this field, working on concepts such as the use of nano-membranes. “There are several technical and economic challenges that must be overcome to ensure the safe and reliable transport of captured CO2,” Bartholomeus comments. “We are investigating these challenges, and are developing a system that utilises the experience already acquired from (natural) gas transportation and experiences in other countries, but fine-tuned to West European requirements and safety standards.” Determining optimum transport pressure, pipeline diameter and compression requirements is a significant challenge, as is tackling CO2 quality issues. To make the necessary technical and economic analyses, we have developed an optimisation tool. The thermodynamic properties of CO2 are being calculated and used to investigate the energy consumption and operating cost of a CO2 pipeline system. The next steps will be to carefully determine the thermodynamic properties of CO2 under transport conditions and to perform experiments on large-diameter pipelines. v Smart grids “In the energy landscape of the future, electricity is going to occupy a more prominent position, as
sustainable sources come into more widespread use. However, that doesn’t imply that gas no longer has a role to play,” argues Bartholomeus. “On the contrary. Energy transition is an excellent opportunity for the integration of electricity and gas, right up to the point of consumption.” That was illustrated recently by the smart energy grid trials carried out in the north of the Netherlands. In PowerMatching City, a living lab Smart Grid demonstration project in Hoogkerk near the city of Groningen, 25 homes have been equipped with a mix of decentralised energy resources (e.g. PV-solar, microCHP and hybrid heat pumps), smart appliances, smart meters, electric vehicles and wind energy. Stabilisation and optimisation of the network are realised by trading energy on a local market on the basis of a real-time price signal. The project also involved researching the smart use of gas and the efficient deployment of equipment. In a smart set-up, natural gas can be used for power consumption peak shaving and potentially to achieve substantial energy cost savings. In order to make good its responsibility for a sustainable future, the gas industry needs to overcome a wide variety of challenges. That in turn implies a degree of out-of-the-box thinking. KEMA, with its long history of involvement in the energy value chain, is ready with advice and practical support to help the industry on the road ahead.
KEMA’s Gas Services Our gas expertise originates from N.V. Nederlandse Gasunie. As one of Europe’s largest gas infrastructure companies, Gasunie operates a gas transmission network with an overall length of more than 15,000 km in the Netherlands and Germany. The throughput totals approximately 125 billion cubic meters. This network meets the highest requirements for safety, reliability and performance. Continuity, safety, sustainability and process optimisation are the key values of KEMA’s gas expertise which spans more than 40 years. This is combined with KEMA’s electricity experience of over 80 years worldwide.
We are sure that you agree that in essence the
Counting Down to IGRC2011
picture has not yet changed. Natural gas is the
By Robert Badoux and Marie-José Fourniguet
fuels, making it a unique choice in the path
cleanest, most efficient and versatile of the fossil towards a lower carbon energy mix and sustain
IGU will hold the 2011 edition of its renowned
able future. More importantly, the abundance of
triennial gas research conference, IGRC2011, at
natural gas, its competitive cost of supply, its
the COEX Convention and Exhibition Centre in
immediate availability and the flexibility to back up
Seoul, Korea, October 19-21. The theme is
intermittent renewable energy supplies clearly
“Innovation is the Key to a Sustainable Future”.
favour it as the best source to address emission
Since IGRC2008 was held in Paris, the global gas industry has experienced remarkable changes.
reductions at the lowest cost. Accordingly, the need for enhanced R&D,
Although energy markets are still affected by a
successful innovation and technical progress
global financial and economic crisis of historic
remains unchanged. The International Gas
dimensions, the rise of unconventional gas pro
Union Research Conference brings together
duction promises substantial new supply options.
gas researchers and innovation managers from
Meanwhile, the reluctance to implement concrete
around the world, presenting forward-looking,
measures adds further uncertainty to the future
new added-value technical solutions and alter
climate policy framework. At this time you may ask
natives for operational excellence. It provides
yourself where does the global gas industry stand?
a forum to exchange innovative ideas that may
And what will be the future prospects for the
change the normal practices of doing business,
sector? Is it time to re-shape the long-term vision
and in which business managers from the
of a climate-friendly energy future?
industry can seek solutions to overcome the challenges that lie ahead. IGRC2011 is paving the way towards a sustainable future. Here are five key reasons to attend IGRC2011 in Seoul: l Listen to what experts say about new supply
sources and their logistics such as unconventional gas, LNG and the increasing role of biogas; l Learn about new technologies and discover
opportunities to operate your infrastructure more efficiently in the face of potential challenges such as ageing assets, integrity management, or third party interference; l Discuss the potential market contribution of
new appliances such as hybrid systems combining natural gas with renewables, decentralised power generation and micro-CHP as well as smart grid solutions; l Make up your mind in the growing debate COEX in Seoul will be the venue for IGRC2011.
82
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about a carbon-free energy world, hydrogen
options and the long-term vision for natural
approach, policy, technology or tool that has been
gas; and
developed and implemented by an organisation
l Supplement knowledge of process safety and
and has yielded significant results. Proposals can
environmental management for sustainable
be in areas such as safety, reliability, cost effici
development.
ency, revenue generation, regulatory issues and organisational efficiency.
l Anchoring IGRC in IGU
Proposals should be submitted through the
Since 2006, IGRC has been a regular confer-
website for submitting abstracts for WGC2012. The
ence under the umbrella of IGU. The Technical
deadline for submissions is September 1, 2011.
Programme Committee (TPC) has established links with the Working Committees (WOC), Programme
Strategic Panel on R&D
Committees and Task Forces of the current
During WGC2009 the Strategic Panel: “Innovation
Triennium. These links have resulted in the
and New Technologies for Increasing Gas
chairing of oral sessions at IGRC2011 by amongst
Competitiveness” was organised by the R&D Task
others Hélène Giouse, Chair of WOC 2, and
Force headed by Marc Florette, the current
Alessandro Soresina, Chair of WOC 4. Further
Chairman of the TPC of IGRC2011.
more, the TPC is working closely with Task Forces
The Task Force’s 2006-2009 work programme
1 and 2 to prepare the workshop on human
focused on how R&D will shape gas companies in
resources during IGRC2011.
the 21st century, as well as on the preparation of
The TPC is also involved in several activities
IGRC2008. The scope of the Strategic Panel at
connected with WGC2012:
WGC2009 was to pick up from the main con
l Pre-selection of the winner of the IGU Gas
clusions and to discuss further how innovation and
Efficiency Award; l Pre-selection of the winner of the Best Practices
Project; and l Organisation of a Strategic Panel on R&D at
WGC2012.
new technologies can contribute to developing the gas business and competitiveness, particularly in terms of safety and security of supply, environ mental issues, and gas efficiency and utilisation. At WGC2012 there will also be a Strategic Panel on R&D, which the Chairman of the IGU
IGU Gas Efficiency Award
Coordination Committee, Ho Sook Wah, has
Full details about IGU’s Awards are given on
asked the TPC to organise. During this panel the
pages 60-61. Proposals for the Gas Efficiency
major findings of IGRC2011 will be presented.
Award should be submitted through the IGRC2011
The TPC has to investigate if it is desirable and,
website (www.igrc2011.com). The deadline for
if so, possible to provide an update on the
submissions is July 1, 2011. The TPC will select
findings of the R&D Task Force of the 2006-
the three best projects and send these together
2009 Triennium. Furthermore, the TPC has to
with the reasons for their choice to the members of
find a theme and panellists for a discussion.
the Evaluation Committee.
The panel will be organised in close liaison with Ho Sook Wah.
Best Practices Project This project was initiated during the Argentine
Robert Badoux of Gasunie and Marie-José
Triennium and is being continued in the Malaysian
Fourniguet of GDF SUEZ are members of the
Triennium with the TPC as the coordinator. A Best
IGRC2011 Technical Programme Committee. For
Practice idea or proposal is an innovative
more information visit www.igrc2011.com.
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I G RC 2 0 1 1 T e n tat iv e P r o g r a mm e Wednesday October 19, 2011
16:30 – 18:30– Oral Presentations (parallel sessions)
09:00 – 10:30 Opening Plenary Session
D How can E&P keep pace with market and environmental demands?
Chairman: Ernesto López Anadón, Chairman IGRC Policy Committee
Session chairman: Sergey Rassokhin, VNIIGAZ – Advanced technologies to produce shale gas (incl. state of reserves and resources) – Advanced technologies to produce from tight sands (incl. state of reserves and resources) – Advanced technologies to produce coal-bed methane (incl. state of reserves and resources)
Welcome address by President of Korea Gas Union
Opening of the conference by Ernesto López Anadón, Chairman IGRC Policy Committee
CEO roundtable
E Which innovations will improve transmission system operation?
Participants: – Dato’ Shamsul Azhar Abbas, President and CEO of Petronas – Matthias Bichsel, Projects & Technology Director, Member of the Executive Committee of Shell – Paul van Gelder, CEO NV Nederlandse Gasunie – Shri B. C Triphati, CEO Gail Moderator: – Robert Catell, Chairman Advanced Energy
Session chairman: Hector Fajardo, Chevron Pipeline Company – Reliability and integrity – Advanced inspection technologies – Simulation for pipeline networks
F What are the opportunities for natural gas in homes and businesses of the future? Session chairman: To be confirmed – Natural gas and renewables – Micro-CHP, fuel cells – Gas heat pumps and cooling
10:30 – 11:00 Coffee-break Sponsored by Daelim Industrial
11:00 – 13:00 Oral Presentations (parallel sessions)
18:30 – 19:00 Break
A How can advanced geo-engineering impact bottom line performance?
19:00 – 22:30 Welcome reception Sponsored by KOGAS
Session chair: Ms Hélène Giouse, Storengy – Exploration and production of deep deposits – Geo-engineering for frequent cycling UGS – Re-use of depleted gas and oil fields for UGS
Thursday October 20, 2011 9:00 – 12:30 Poster Sessions 2 & 3 Innovations Exhibition
B Do innovations drive asset management in transmission & distribution system?
9:00 – 11:00 Workshop W2 Is there a role for natural gas in smart energy grids?
Session chairman: Pierre Bartholomeus, Kema GCS – Upgrading of systems (pressure increase, life time extension) – Innovative approach for asset management – Risk analysis
Organised by KEMA – Will anybody care about natural gas in smart energy grids? – Smart grids: only an electrical concept?
11:00 – 13:00 Workshops
C Does electricity power the gas industry?
W3 What will the new LNG market look like? Organised by Petronas – Techno-political-economic issues – Technology demand for LNG of the future – LNG versus GTL – Management of ageing LNG systems
Session chairman: To be confirmed – Improving gas turbines – Gas technologies and electrical storage (hydrogen, compressed air storage) – Large CHP – Natural gas in the next generation fuel mix
W6 Can R&D be a magnet for new talent in the gas industry?
I What are the future gas properties? Session chairman: Howard Levinsky, KEMA – Varying gas quality / composition – CFD – Fuel switching in industrial processes – Innovative and efficient technologies for industry
16:30 – 18:30 Poster Session 4 Innovations Exhibition 16:30 – 18:30 Workshop W4 What will be the picture in 2050: zero gas or zero carbon gas? Organised by E.ON Ruhrgas – Will natural gas be part of the long-term solution? – What technologies and solutions keep gas utilities in the game?
18:30 – 19:00 Break 19:00 – 22:30 Gala dinner Sponsored by GDF SUEZ
Friday October 21, 2011 9:00 – 11:00– Oral Presentations (parallel sessions) J LNG – Where are the next technology breakthroughs? Session chairman: Colin Wong, Petronas – Latest tank design – Off-shore LNG / micro LNG – Safety issues – New LNG carriers
K Which innovations will improve distribution system operation? Session chairman: Alessandro Soresina, A2A – Third party interference – Materials and ageing – Odorisation – Advanced metering
L Will gas prevail over electric mobility in the transport sector? Session chairman: Brett Jarman, NGV Global – How do NGVs compete with hybrid and electrical cars (CO2 / efficiency)? – Heavy duty – New storage concepts – Charging electrical vehicles by gas
11:00 – 11:30 Coffee-break 11:30 – 12:45 Closing Plenary Session
13:00 – 14:30 Luncheon
Organised by the TPC, IGU TF1 & TF2
14:30 – 16:30 Poster Session 1 Innovations Exhibition
13:00 – 14:30 Luncheon
Chairman: Ernesto López Anadón, Chairman IGRC Policy Committee Sponsored by E.ON Ruhrgas
14:30 – 16:30 Workshops
14:30 – 16:30 Oral Presentations (parallel sessions)
11:30 – 12:00 Closing Keynote Speech by CEO KOGAS
W1 What roles should the gas industry play in CCS?
G Is bio-energy an option for greening the gas market?
12:00 – 12:30– Wrap up, Dan Dolenc & Young Researcher’s Prize
Session chairman: Friedrich Wolf, E.ON Ruhrgas – Biomethane in the natural gas grid – Advanced technology for biomethane processing – End use of biomethane
Organised by GDF SUEZ
W5 Keeping gas in the buildings of tomorrow: will codes and standards kill gas?
H How to assess the environmental footprint of the gas chain?
Organised by GTI – Are building rules & regulation excluding natural gas as a solution?
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Session chairman: Marc Florette, GDF SUEZ, – Analysis of the whole chain: what is missing? – Methods and data?
to
I G RC 2 0 1 1
by Ernesto López Anadón, Chairman IGRC Policy Committee
12:30 – 12:45 IGRC2014 by Peter Hinstrup, DGC
Top expertise in gas research Sustainable energy supply is the key for the future. Together with industry, TNO develops and implements innovative gas technologies to enable a smooth transition to a sustainable energy supply.
TNO | Innovation for Life TNO is actively involved in innovative processes to increase energy efficiency, to produce renewable energy, to reduce CO2 emissions and to optimize oil and gas exploration and production.
Gas related research
• Exploration & Production • European Gas Hub • LNG Test & Technology Centre • CCS & Sour Gas Treatment • Gas Transport & Storage
WWW.TNO.NL/OIL&GAS
25th World Gas Conference is On Track By Zahariah Abdul Rahman With the theme “Gas: Sustaining Future Global Growth”, the 25th World Gas Conference (WGC2012) to be held in Kuala Lumpur, Malaysia, from June 4-8, 2012, is on track to become IGU’s most memorable gas event. The National Organising Committee of the 25th World Gas Conference (WGC 2012) picks up pace this year to continue efforts to fulfil the high expect ations of the 3,500 delegates expected to make their way to this global gas event. So far, 11 keynote speakers and one luncheon
Zahariah (Liza) Abdul Rahman, CEO of WGC 2012.
speaker have confirmed participation. With the
b e lo w
Table 1.
preliminary programme now finalised (see Table
has been planned to provide a seamless flow
1), the opening ceremony will be scheduled on
from one event to another, giving exhibitors ample
the afternoon of June 4, 2012, followed by the
opportunity to showcase their booths and network
opening of the exhibition halls and ending with
with high profile industry players after the
the gala dinner in the evening. This arrangement
opening ceremony.
W G C 2 0 1 2 PREL I M I NARY PRO G RA M M E
echnical gramme
at a Glance
Monday 4 June
Tuesday 5 June
Wednesday 6 June
Thursday 7 June
Friday 8 June
THEME OF THE DAY
FOUNDATION FOR GROWTH
ENSURING SUPPLY SECURITY
ENHANCING GAS DEMAND
A SUSTAINABLE FUTURE
08.30 – 09.15
Keynote Addresses
Keynote Addresses
Keynote Addresses
Keynote Addresses
09.45 – 11.45
Committee Sessions/ Expert Fora
Committee Sessions/ Expert Fora
Committee Sessions/ Expert Fora
Strategic Panel Sessions 1. Gas and renewables 2. World Petroleum Congress
12.00 – 13.30
Luncheon Address
Luncheon Address
Luncheon Address
Luncheon Address
13.45 – 14.30
Keynote Addresses
Keynote Addresses
Keynote Addresses
14.30 – 16.00
Opening Ceremony
Strategic Panel Sessions 1. Building strategic human capital 2. Nurturing the future generations
Strategic Panel Sessions 1. Geopolitics and natural gas 2. Non-conventional gas 3. LNG and the future
Strategic Panel Sessions 1. Advocacy for natural gas 2. Innovation and research 3. NGV for transport
Special Session TWP 2012-2015
16.30 – 18.30
Exhibition Opening & Networking
Committee Sessions/ Expert Fora
Committee Sessions/ Expert Fora
Committee Sessions/ Expert Fora
Closing Ceremony
20.00 – 22.30
Gala Dinner
Plenary Sessions
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Official Ceremonies
W o r l d
G a s
Social Events
C o n f e r e nce
Note: For updated information on the Technical Programme and to register for Technical Programme updates via the WGC2012 electronic newsletter, please visit the WGC2012 website (www.wgc2012.com)
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Participants in the first meeting of exhibitors were welcomed with warm Malaysian hospitality (above ). They also had the opportunity to meet service providers and were taken for tours of the WGC2012 Concept Village (below ).
l Abstract submission deadline September 1,
Registration for delegates is now open. Early
2011;
birds registering before December 31, 2011 will enjoy a special rate of $2,700. The full conference
l Author notification November 15, 2011;
fee after that is $3,200. All authors of papers at
l Full paper submission deadline February 1,
WGC2012 are required to register for the confer
2012.
ence and pay the fee. For registration enquiries, e-mail registration@wgc2012.com. l New Chairman of WGC 2012
Datuk Anuar Ahmad has now taken over as the Chairman of WGC 2012 from Datuk Wan Zulkiflee. Datuk Anuar is the Executive Vice President of PETRONAS Gas and Power Business and has been with PETRONAS since 1977. l Call for papers
The call for papers for the 25th World Gas Conference was published and launched on February 1. Abstracts are welcomed via online submission at www.wgc2012.com. Detailed infor mation and instructions can be found on the web site or contact: cfp@wgc2012.com. Key milestones for the technical paper selection are as follows:
25th
World
Gas
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event and more visitors to Kuala Lumpur
L I ST OF CONTRACTED E X H I B I TORS AS AT FEBRUARY 1
in 2012. Arrangements have been made to increase
Geofields
BP Gas Marketing
Heath Consultants
Brunei LNG
Radius Systems
CNPC
Hermann Sewerin GmbH
Delcom
Japan Gas Association
RWE
movement at the exhibition venue a dynamic
Dialog
Lima Bintang
Sapura Crest
one (see the exhibition floor plan). For priority
Elster-Instromet
Mesura
SBM Offshore
assistance, please e-mail exhibition@
Emerson Process Management
MISC
Schutz GmbH
NIGC
Solar Turbines
wgc2012.com.
E.ON Ruhrgas AG
NMI
Statoil
Exxon Mobil Corp
OMV Gas & Power
Talisman Malaysia
Fluxys Corp
Pergam-Suisse
Technip
opportunity to explore the conference and
Gas Natural
Petronas
Total
exhibition venue and experience Malaysian
Gascat
Polish Oil & Gas Company
Wood Mackenzie
hospitality. Exhibitors were updated on the
Yemen LNG
progress of the event organisation, toured the
Gasunie
PTT Public Company Limited
traffic flow between the expert conference
BG Group
sessions, coffee breaks, luncheons and technical sessions thus making people
Romgaz
The first meeting for exhibitors was held on November 12, 2010, and was an excellent
sites / facilities and met major service providers and suppliers who will help them above
Table 2.
b e lo w
Table 3.
with their exhibition.
l Exhibition
To allow companies the opportunity to have
A remarkable 70% of the total exhibition space has been committed and contracted (see Table
a final site visit before the event, a second
2 for a list of contracted exhibitors). Extensive
meeting will be organised later this year.
marketing efforts by the team continue to
Participants who joined us for the first visit are
attract more companies to join this prestigious
more than welcome to attend again. If you would like to receive the invitation to attend the second meeting, please e-mail your request to
CONTACT DETA I LS
exhibition@wgc2012.com. Taking place at the Kuala Lumpur
WGC 2012 (Organiser of the 25th World Gas Conference) Etiqa Twins, Level 20, Tower 1 11, Jalan Pinang 50450 Kuala Lumpur Malaysia Tel: +60 3 2171 3500 Fax: +60 3 2171 3535 Website: www.wgc2012.com General information: Conference (general): Conference (registration): Conference (call for papers): Exhibition: Sponsorship: Media: Accommodation, transportation and social events:
Convention Centre, the main hub of the 25th World Gas Conference Concept Village, the exhibitors’ meeting will brief you on the general event programme, available accommodation near the venue, sponsorship opportunities to maximise your brand and invoicing and payment schedules. A guided
info@wgc2012.com conference@wgc2012.com registration@wgc2012.com cfp@wgc2012.com exhibition@wgc2012.com sponsorship@wgc2012.com media@wgc2012.com
tour will be arranged for the site visit.
destination@wgc2012.com
Zahariah Abdul Rahman is the CEO of
Do not hesitate to contact WGC 2012 with your enquiries. Contact details are provided in Table 3. We look forward to welcoming you to Kuala Lumpur.
WGC 2012.
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WGC2012 exhibition floor plan (for a detailed floor plan, please visit www.wgc2012.com).
MAIN ENTRANCE / DROP OFF / PICK UP POINT
VO
ID VO
ID
VOID
VOID
CONFERENCE SESSION ENTRANCE
VOID
LEVEL 4
EXHIBITION ENTRANCE ELEVATORS CONCOURSE
VOID
ENTRANCE FROM CAR PARK
HAL
L1 0
PETRONAS TWIN TOWERS
TOWER 3
HALL HALL
MANDARIN ORIENTAL HOTEL
LEVEL 3
8
9
EXHIBITION HALLS EXTENDED EXHIBITON HALLS
VO
ID VOID
VO
ID
COURTYARD
LEVEL 1 (MEZZANINE)
VOID HA
HALL 7
GROUND FLOOR
LL
CATERING OUTLET LINKWAYS 1st FLOOR
5
HALL 6
HA
LL
CA
R
HALL
4 HALL
PA R
K
1
GROUND LEVEL
2
HOSPITALITY LOUNGE ORGANISER’S OFFICE
HALL 3 CAR
CONCOURSE LEVEL
PARK
PLENARY HALL (AUDITORIUM) VOID 3rd FLOOR EXHIBITION HALLS MEETING ROOMS
LEVEL 4
PLENARY HALL (AUDITORIUM) PLENARY THEATER
LEVEL 3
4th FLOOR MEETING ROOMS
LEVEL 1 (MEZZANINE)
VOID VOID GROUND LEVEL
VOID
CONCOURSE LEVEL
Solutions Geared Towards Success through Total Integrated Specialist Services Technology Partners
Shell MDS
Listed on Bursa Malaysia (KLSE), DIALOG GROUP BERHAD is the leading integrated service provider with more than 20 years of experience in servicing the oil, gas & petrochemical industry covering the needs of both the upstream and downstream activities. In its pursuit to be a Trusted Global Business Partner, DIALOG aims to forge strategic alliances with experienced technology partners to broaden the range of services provided to its customers. The services provided range from upstream to downstream activities encompassing: • Centralised Tankage Facility Services • Specialist Products and Services • Catalyst Handling Services
DIALOG GROUP BERHAD (Company No. 178694-V) 109 Block G, Phileo Damansara 1, No. 9 Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan, Malaysia
• Plant Maintenance • Engineering & Construction
Tel : 603-7955 1199 Fax : 603-7955 8989
• Fabrication
www.dialogasia.com
Integrated World Class Solutions via World Class Partnerships and Technology
The French Gas Association The professional gas union in France
www.afgaz.fr
Bringing our energy together • Promotion and development of the gas industry in France • Supplyer of services in the fields of standardization, certification and training • Exchange of information and expertise between gas players
Save the date of the next Gas Conference Paris: 14th & 15th September 2011 www.congresdugaz.fr / www.expogaz-expo.com
© Visuel : cornelius - fotolia.com / Conception graphique : www.pension-complete.com - 2010
• Representation of French gas interests at national, european and international levels
COORDINAT I ON COMMI TTEE PROG RESS REPORT Introduction and Key Developments
92
CC meeting
92
Programme Committee A – Sustainability
114
Programme Committee B – Strategy
116
Programme Committee C – Gas Markets
120
Technical Committees and Task Forces: Membership, meeting highlights and external cooperation
93
Programme Committee D – LNG 122
WGC2012 in Kuala Lumpur
95
Programme Committee E – Marketing
126
Progress Reports from the Task Forces
130
Working Committee 2 – Storage 100
Task Force Building Strategic Human Capital
130
Working Committee 3 – Transmission
104
Task Force Nurturing the Future Generations
134
Working Committee 4 – Distribution
107
Task Force Geopolitics and Natural Gas
137
Working Committee 5 – Utilisation
110
Progress Reports from the Committees
98
Working Committee 1 – Exploration and Production
98
91
representatives of the various Committees and
Introduction and Key Developments
Task Forces shared the progress of their work activities in the presence of IGU Executive Committee members and guests.
By Ho Sook Wah and Ungku Ainon Ungku Tahir
IGU under the Malaysian Presidency has initiated a global advocacy programme for natural
This is the second progress report of the 2009-
gas, building on its key attributes and developing
2012 Triennium under the Malaysian Presidency.
a communications strategy that will resonate with
The report aims to provide the reader with infor
each stakeholder group. As a follow-up from the
mation about the status of the work as described
workshop held in Jimbaran, Bali in April 2010,
in the Triennial Work Programme (TWP). It consists
IGU has appointed PFC Energy, a US consultant
of contributions and updates by IGU’s Working
based in Washington DC to assist in developing
Committees (WOC), Programme Committees
this message for gas advocacy and crafting an
(PGC) and Task Forces (TF) since June 2010.
effective communication strategy. At the 2010 Council meeting in Doha, a half day was dedi
l CC meeting
cated to holding a special workshop to solicit the
The Coordination Committee (CC) held its fifth
views and support of delegates for the gas advo
meeting in Doha, Qatar on October 18, 2010.
cacy toolkit that has been developed.
It started with a closed session to discuss internal
As mentioned in the last progress report, a joint
matters centred mostly on the programme content
committee meeting was held on May 4, 2010 in
and activities planned for WGC2012. During the
Opatija, Croatia to discuss gas and renewables,
second part of the meeting, the Chairs and
a subject which is being addressed by PGC A,
Ho Sook Wah, CC Chairman (l e f t ) and Ungku Ainon Ungku Tahir, CC Secretary (right ).
92
I n t r o d u c ti o n
a n d
K e y
D e velop m ents
Doha was the venue for the October 2010 meetings of the CC, Council and Executive Committee.
PGC E and WOC 5. The three Committees agreed
The CC Chairman, Secretary and representatives
their respective areas of focus and responsibility
from IGU Management continued to attend and
and also committed to preparing a joint publi
participate in the scheduled meetings of the Technical
cation called “Renewable Gas – the Sustainable
Committees whenever possible, or through
Energy Solution” for 2012.
conference calls with the Committee leaderships to
The preliminary conference programme for the 25th World Gas Conference has been developed.
discuss the work progress and related matters. The minutes of the meeting in Doha and the
A total of 10 Strategic Panels have been planned
respective presentations are published in the
in line with the theme for each day of the con
CC section of the IGU website, which is accessible
ference. The call for papers was launched on
to members.
February 1 and provides opportunities for external authors to participate either with oral papers or
l Technical Committees and Task Forces:
posters. It also calls for submissions for the project
Membership, meeting highlights and
“Best Practices in the Natural Gas Industry” and
external cooperation
the IGU Social Gas Award. The review and selec
Membership of the Technical Committees con
tion of the papers in these latter two categories will
tinues to grow with 840 professionals from more
be assisted by the IGRC Technical Planning Com
than 50 countries registered. Figure 1(over) shows
mittee and PGC A respectively. All submissions of
the evolution of membership from the start of the
abstracts will be managed by the e-Abstract Man
Triennium to the end of 2010, while the resulting
agement System.
global coverage is depicted in Figure 2 (over). The
Introduct ion
and
Key
D e velop m ents
93
A workshop and a round
E V OLUT I ON OF CO M M I TTEE M E M BERSH I P ( AS OF END 2 0 1 0 )
table were held in the second half of 2010 and a workshop
1000
was scheduled for this March.
900 800
862
840
808
796
TF 1’s workshop “Recruiting and Retaining Talent in the Gas
700 600
Industry: Challenges and
562
500
Opportunities in the Middle
467
East” was held on October 19
400 308 300
in Doha, after the CC meeting.
200
TF 3’s Asia-Pacific Roundtable
100
on Geopolitics and Natural Gas
0 Jul
right
Aug Sept
Oct
Nov Dec
Jan
Feb
Mar
Apr
2009
Figure 1.
May
Jun
Jul
Aug
Sept
Oct
Nov
was held in Taipei on November
Dec
2010
23. Highlights of these two events are included in each Task
breakdown of members by Committee and Task Force is shown in Table 1.
At presstime, IGU and the International
All the Committees and Task Forces have held
right
Figure 2.
Confederation of Energy Regulators (ICER) were
their 2010 autumn meetings as scheduled. A
set to hold a joint workshop in Washington DC on
summary of their progress reports is presented in
March 8 looking at regulatory issues of global
the following chapters.
significance for the gas industry. The objective is to TECHN I CAL CO M M I TTEE M E M BERS ( AS OF END 2 0 1 0 )
g lo b a l c ov e r ag e
far right
Table 1.
9%
12%
19%
94
Force’s progress report.
I n t r o d u c ti o n
60%
WOC 1 Exploration and Production
45
WOC 2 Storage
73
WOC 3 Transmission
92
WOC 4 Distribution
79
WOC 5 Utilisation
86
PGC A Sustainability
59
PGC B
Strategy
126
PGC C Gas Markets
64
PGC D LNG
89
PGC E
Marketing
59
Europe & Russia
TF 1
Building Strategic Human Capital 47
Asia-Pacific
TF 2
Nurturing the Future Generations 27
North & South America
TF 3
Geopolitics and Natural Gas
Middle East & Africa
Total
a n d
K e y
D e velop m ents
16 862
left
The fifth CC meeting in progress.
promote interaction between regulators and operators. Key topics include: regulation and gas price formation, regulatory influences on inter national investments and environmental aspects of natural gas. PGC B worked on this event which received a very encouraging response, partici pation being by invitation and limited to 100 participants. A similar workshop may be held at a later date in Europe. l WGC2012 in Kuala Lumpur
IGU’s 2009-2012 Triennium will culminate at the 25th World Gas Conference in Kuala Lumpur, 4-8 June, 2012. The deadline for the submission of abstracts, which will only be accepted through the online e-Abstract Management System, is September 1, 2011. Further details can be found in this edition of International Gas on pages 86-89 and also from the website www.wgc2012.com. We look forward to receiving the abstracts and to the fruitful exchange they will generate at WGC2012. Ho Sook Wah is Chairman of the Coordination Committee and Ungku Ainon Ungku Tahir is the Committee’s Secretary. Readers requiring further information are invited to contact Ungku Ainon at ungkuainon@malaysiangas.com or to visit IGU’s website at www.igu.org.
WGC2012 will be held in Kuala Lumpur.
Introduct ion
and
Key
D e velop m ents
95
Total and LNG An interview with Laurent Maurel, Vice President, Liquefied Natural Gas and Management Committee member, Total Gas & Power. v LNG is pivotal to our future LNG, three letters that pack a punch for the nat ural gas industry in general and Total in particular. Over the last 20 years, liquefied natural gas has become a key gas market driver. With almost 40 years of experience, our LNG expertise spans the entire value chain. We have laid the foundations for various building block projects that will drive us forward over the coming years – Angola LNG, Ichthys and Gladstone LNG in Australia, Shtokman in Russia, Nigeria LNG and Brass LNG in Nigeria. v Why is LNG strategically important for Total? Demand for LNG is growing at a remarkable rate, despite the recent global economic downturn. With a current market share of just over 25% and annual growth of 7% over the last decade, LNG looks set to meet 40% of international gas trade in 2020. Its success can be attributed to the fact that when liquefied at -160°C, it occupies 600 times less space than gas. It can then be shipped by LNG carrier to consumer markets far away from the production site. Furthermore, carriers can change destination, whereas gas pipelines are fixed. And then there are its environmental advantages. When burned, LNG generates 50% less carbon than coal, making it a suitable fuel for power plants until alternative energies are mature enough to take their place alongside fossil fuels. All good reasons for our active presence in this segment. In addition, the cutting-edge LNG expertise of our engineers, technicians and marketing staff has been honed over several generations, since we started producing
LNG in Algeria in the 1960s. Our unique skills enable us to provide an end-to-end LNG offer that extends from production to marketing. v The flexibility of LNG has redefined gas markets. Where are the main markets for LNG and the near-term outlook? Because transportation is flexible, LNG is very popular with countries that are not supplied by gas pipeline, for geographic or political reasons, as well as those simply seeking to diversify their energy sources. This gave birth to an LNG market that enables buyers and sellers to leverage price differences between regions. The long-established LNG markets of North-East Asia (Japan, South Korea, Taiwan) and Europe still constitute the main demand hubs. At the same time, new markets are developing quickly, chiefly China and India. An increasing number of countries are looking to LNG, either to enhance their security of energy
supply or to supplement their domestic pro duction. New nations across the globe, for instance in South-East Asia, South America or the Middle East have recently completed or are about to commission the regasification terminals they need to become LNG importers. What’s even more remarkable is that many of these countries were or still are large pipe gas or LNG exporters. v LNG requires considerable infrastructure, including liquefaction plants, LNG carriers, regasification terminals, and enduser distribution networks. How can you secure sufficient outlets for your production? Although important, technical resources alone are not sufficient for establishing a leading presence in the LNG market: people with specialised knowledge of the LNG chain are the key factor. As I said earlier, we have grown our expertise with the market. Our teams have worked with LNG from the outset, and have transferred their skills at each step. This expertise is invaluable, enabling us to ensure sufficient outlets for our production. We know how to produce, liquefy and ship natural gas, we have interests in a large number of regasification terminals, and we have world-class marketing expertise. We have the necessary skills and technology every step of the way. Let me emphasise our marketing expertise, as LNG has been a key driver of gas market globalisation. Our London-based trading team oversees many large-scale transactions, including LNG cargo trading, arbitraging with regard to regional competition and spot and futures contracts, managing shipping, and reserving regasification capacity. They ensure that our LNG
portfolio is leveraged to its full potential. Our expertise across the entire value chain, from production to market, guarantees us a key role in many major international projects. v Total has launched a new round of projects for the next decade. Could you tell us about them? Yemen LNG and Qatargas 2 started up in 2009, and have increased our production by 50% in the recent past. They are indicative of a change in scale that is set to continue in the coming years as we design and build various large-scale projects. Currently under construction, Angola LNG will process associated gas from offshore oil licenses as of 2012. In Nigeria, we have a 17% interest in the Brass LNG project, which will produce 10 mtpa of LNG. We also have a 15% interest in the 22 mtpa Nigeria LNG liquefaction plant, for which front-end engineering and design (FEED) is being conducted for a planned new 8.5 million metric ton train. In Russia, we are addressing, in partnership with Gazprom, the technological challenges involved in developing the giant Shtokman natural gas and condensate field in the Arctic Ocean. And lastly, in Australia, we have two projects. First the Darwin liquefaction plant which will process 8.4 million metric tons of dedicated natural gas fed from the Ichthys field each year. I shall finish this long list with our most recent investment: at the end of 2010 we acquired a 27.5 % interest in Gladstone LNG that is due to start production in 2015 after the final investment decision was taken in January 2011. All these large, high-tech projects will contribute significantly to our growth and allow us to maintain our position as a top-tier LNG operator over the next decade.
Progress Reports from the Committees
of WOC 1’s work, and the expected contributions of the two Study Groups were also clarified. SG 1.1 Recent Advances in exploration and production of natural gas
This chapter contains news and information from
Leader: Armando Hashimoto (Brazil). For the
IGU’s five Working Committees and five
meeting in Oran, Kamel Eddine Chikhi (Algeria)
Programme Committees.
acted on his behalf. SG 1.1 will update estimates of resources and
l Working Committee 1 – Exploration and
reserves of both conventional and unconventional
Production
natural gas according to IGU’s regions. This
By the end of the Malaysian Triennium, WOC 1
update must be supported by an analysis of
aims to provide a comprehensive study on
statistical indicators for gas exploration efforts. The
significant technological advances related to
results will be represented by the “creaming
the upstream segment of the global gas industry
curves”1 for the main gas provinces. The
with case studies on typical gas projects being
technology component will also be developed,
developed or put into production during this
especially if the resources are related to difficult
decade.
reservoirs or unconventional accumulations.
As reported in the last issue of the IGU Magazine, WOC 1’s first meeting of the Triennium
SG 1.2 Most significant new E&P gas projects
had to be postponed when the Icelandic ash-cloud
Leader: Flavia Di Cino (Argentina). For the
closed airspace in Europe. It eventually took place
meeting in Oran, Mazouzi Amine (Algeria) acted
in Oran, Algeria, September 14-16, 2010.
on her behalf.
The meeting in Oran was attended by 17 delegates from 12 companies and 11 countries,
The objectives of SG 1.2 are to: l Identify existing gas projects and agree on
and the work session was split into two days.
selection criteria based on the level of reserves,
Presentations were provided on the various themes
complexity and type of technology used; l Analyse their impact at regional and global
levels, particularly those located near areas of regional consumption and in remote/frontier areas; and l Provide an update on the most important gas
projects over the last decade, namely those related to unconventional resources such as CBM, shale gas and tight gas. Attention will also be given to the development of sour gas projects in south-east Asia and pilot projects associated with gas hydrates. WOC 1’s second meeting was held in Buenos Aires, Argentina, from November 30 to December 2, 2010. It was attended by 11 delegates from seven Delegates to WOC 1’s first meeting pose for a group picture at the headquarters of Sonatrach Downstream in Oran, Algeria.
98
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1 The creaming curve displays the cumulative discovery versus the cumulative exploration activity.
companies and six countries. During the meeting a
addressed. The concepts of “de-risking” plays
presentation was made by CC Secretary, Ungku
through explorations and “de-stranding” gas for
Ainon. She provided members with updated infor
global markets were also addressed. During the
mation on CC activities and a reminder of the dead
discussions, the following ideas / keywords
lines for expected contributions from WOC 1. The
emerged to prepare the call for papers:
immediate task was preparing for the call for papers.
l Best practices;
It was also agreed that WOC 1 will help pro
l Horizontal drilling;
mote the message that IGU is conveying to the
l Fracking;
energy community under the advocacy programme
l Reservoir conditions;
with its slogan / acronym “Natural gas CARES for
l Sweet spots and how to identify them;
the world” (Clean, Affordable, Reliable, Efficient
l Drilling patterns, well designs, acreage; and
and Secure).
l Practical cases / lessons learned.
Then Flavia Di Cino, Leader of SG 1.2,
On the topic of CCS, WOC1 will collaborate
presented the scope and purpose of the study on
with WOC 2 and develop an approach from an
E&P gas developments and the reasoning behind
E&P perspective. The main subjects should include
the proposed chapters:
reinjection, production economics, best practices
l Worldwide natural gas endowment (in
and regulatory frameworks.
coordination with SG 1.1);
The topics proposed for the call for papers for
l Conventional and complex projects;
WGC2012 were also debated. (After the meeting
l Unconventional developments; and
in Buenos Aires they were finalised and are
l Carbon capture and storage (CCS) initiatives
reflected in the call for papers issued in February).
(in coordination with WOC 2, from an E&P
WOC 1 is preparing two Committee Sessions and
perspective) and methane hydrates.
two Export Fora for WGC2012.
In the ensuing discussions delegates agreed that, for natural gas endowment, conditions for
Future meetings
commerciality will be the key criterion instead of
At presstime WOC 1’s third meeting was due to
quantity for the purpose of SG 1.2 deliverables.
take place in Beijing, China, March 14. The fourth
Particular attention was dedicated to define conventional and complex projects which: involve geologically conventional targets in harsh environ ments or remote areas; face new technical chal lenges; or are on a scale requiring ad-hoc solu tions. The criteria for project characterisation and methodology for data gathering were addressed. Public sources were considered to be the best approach for data gathering. With regards to the collection of case studies, it was agreed that in order to identify the current main trends, a history of complex projects would be included as a way to show how difficulties were overcome in the past and what today’s challenges are. Case studies will be presented to describe today’s challenges and how they are being
The SG 1.2 team led by Flavia Di Cino (second right ) seen in Buenos Aires with CC Secretary Ungku Ainon (fourth left )
Pro gress
Reports
fro m
the
C o mmi t t e e s
99
WOC 2 Chair, Hélène Giouse, welcomed participants and thanked Gazprom for hosting the meeting. CC Chairman, Ho Sook Wah, shared the latest developments and updates on IGU and CC activities. The three Study Group Leaders presented their work progress to date and then met separately with their teams. At the end of the meeting the Leaders gave a brief update on what had been agreed in their separate sessions. SG 2.1 Updating and improving the UGS database and promoting it as a reference Leader: Ladislav Goryl (Slovakia) The questionnaire and contact list were finalised at the meeting in St Petersburg, although some countries have no contacts identified. A special arrangement has been made for Fred Metzger, WOC 2 members pose for a group picture during their second meeting of the Triennium in St Petersburg.
WOC 2 corresponding member from the USA to collect the questionnaire for North America and to update it with the American Gas Association.
meeting will be held in Rio de Janeiro, Brazil,
Contacts too have been established with Australia
October 3.
with the help of Barbara Jenkins, who is the Leader of WOC 3’s Study Group 3.3.
l Working Committee 2 – Storage
The questionnaire was sent out in August with a
During 2010, two WOC 2 meetings were org
deadline of October 31, 2010. It was pre-filled
anised. The first was held in Paris in January and
with the data of the previous questionnaire (2006-
was covered in the last progress report. The
2009). A meeting of SG 2.1 was then organised
second was held in St Petersburg, Russia from
on November 24 in Pieve di Soligo, Italy, to analyse
June 29 to July 1. Both meetings were followed by
the first results of the questionnaires and to prepare
technical site visits to a storage site – Gournay,
another consultation on some of the missing
operated by Storengy in France and Gatchinskoe
answers. After this meeting, SG 2.1 members
UGS, operated by Gazprom in Russia.
visited the Collalto UGS facility operated by Edison.
An additional conference call involving the
An agreement was signed by UNECE and
Committee’s leadership took place on October 12
WOC 2 on November 17, 2010, to share data
to discuss preparations for the next meeting and to
about operational and planned UGS facilities in
exchange views on WOC 2’s proposals for the call
Europe and the CIS region.
for papers. The meeting in St Petersburg was attended
100
SG 2.2 Definition of some best practices in UGS
by 47 members from 15 countries. Mr Aksytin,
operations and design
a member of Gazprom JSC’s Board of Directors
Leader: Eddy Kuperus (The Netherlands)
and the Head of Gas Transportation,
Best practices will cover three topics: methane
Underground Storage and Utilisation
emissions, CO2 sequestration and well
Directorate, officiated.
integrity assessment.
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Respect. For Europe’s energy needs.
Europe needs new sources of natural gas to maintain economic growth while meeting climate protection targets. The Nord Stream Pipeline is a timely and environmentally sound means of bringing large volumes of natural gas to Europe. Nord Stream will provide enough energy to satisfy the energy demand of more than 26 million households. www.nord-stream.com
l “Theoretical and practical aspects to prove the
technical well integrity for gas storage purposes” by Abdel Haq Amer (UGS); l “Technical diagnostics of well casing for inte
grity management at UGS facilities in Russia” by Nikita E. Barsuk (Gazprom UGS LLC); l “Well integrity management methodology at
E.ON Gas Storage” by Herman Spreckels (E.ON); l “Some aspects of the well’s integrity assessment
of Chiren UGS” by Dimitar Shterev (Bulgartransgaz); l “Well integrity management in Storengy :
Overview and focus on a case study” by Hélène Giouse and Jean-Marc Patroni (Storengy). These presentations provided some in-depth elements for the Study Group’s final report.
During the meeting a technical visit was made to Gatchinskoe UGS.
Members also discussed the methodology of their report. Two possibilities have been identified:
Methane emissions – the report should be issued by the end of 2011 and an article will be published in the next issue of the IGU Magazine. After the St Petersburg meeting an email was sent
l Proposal of a methodology to rank integrity of
wells based on the presentations; l Research of existing data, visual inspection, well
measurements and intervention.
out requesting all members of the Study Group to provide answers to three specific questions on
SG 2.3 Skills and competencies for UGS activities
methane emissions. The answers are being anal
Leader: Vladimir Onderka (Czech Republic)
ysed and VNIIGAZ, which has major experience in
In order to ensure a reliable and flexible supply of
this field, has agreed to assist. The following approach
skilled resources to the UGS sector, it is important
has been agreed for the structure of the report:
to support training for specialists working in the
l Categorisation of main UGS components and
field. Hence SG 2.3 has designed a “Young
activities that impact methane emissions; l Definition of best practices to reduce emissions
based on this categorisation; and
professionals under 30 and recent graduates working in the UGS sector. Five fields of interest
l Identification of regulations (European, local).
CO2 sequestration – at the meeting in St Petersburg, VNIIGAZ presented some infor mation on CCS projects around the world. The
have been listed: Geosciences; Reservoir Engineering; Production Engineering; Drilling & Completion; and, Treatment of Natural Gas. Each course runs for approximately two weeks
Study Group has decided to develop a database
and has places for 15 students; each company in
of CCS projects. In addition, WOC 1, WOC 2 and
WOC 2 can nominate a maximum of three
PGC A have agreed to work together to organise
candidates. The programme will end in the second
a common session on the topic of CO2 seques
half of 2011. Courses are taught in English and
tration during WGC2012.
the selection of successful candidates is made via
Well integrity assessment – a workshop on this
102
Employees Exchange Programme” dedicated to
an entrance test. The best trainee will have the
topic was organised during the meeting in St
opportunity to participate in WGC2012 (with the
Petersburg with five presentations:
support of his or her company).
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In parallel, a questionnaire has been sent to
ing was held in Houston, USA, with temperatures
WOC 2 members to analyse and describe the
of 35°C and almost 100% humidity. It was hosted
current shortage of skilled professionals in the
by Chevron and took place from September 8 to
storage business.
10, 2010. Delegates entered the meeting room to the
Next meetings
strains of WOC 3’s signature tune “I can’t give you
At presstime the next WOC 2 meeting was due to
anything but…” and the text was displayed on the
be hosted by NAFTA in Bratislava, Slovakia, March
projection screens. After everyone had arrived
15-17. The fourth meeting is planned for the
WOC 3’s Chairman, Eric Dam, handed over the
second half of 2011 and will be hosted by E.ON
first CD of our song to CC Chairman Ho Sook Wah.
in Essen, Germany. Enagás has agreed to host
Eric Dam welcomed the 44 participants from
the final meeting in Spain in February or March
22 countries and gave a special word of welcome
2012. Technical visits will be organised during
to the 15 new members present. He thanked
each meeting.
Chevron for hosting the meeting and gave the floor to Becky Roberts, President of Chevron Pipe
Miscellaneous
Line Company. Declaring that Houston is the
Hélène Giouse will chair a storage and
energy capital of the world, she explained that
geosciences session during IGRC2011 in Seoul
more than 3,000 energy-related companies are
(see page 84 for the IGRC2011 programme).
active in the city and they account for over 40% of
WOC 2 has also contributed an article to this
the local economy. Just as gas is an important part
issue of the IGU Magazine (see pages 200-202).
of the world energy portfolio, she said, it is a significant part of Chevron’s future. However, the
l Working Committee 3 – Transmission
BP incident will have a significant impact on the
As mentioned in the last progress report, WOC 3’s
gas industry. The challenges, particularly for trans
first meeting of the Triennium was held in a chilly
mission are significant and therefore it is of vital
Amsterdam. In complete contrast the second meet
importance to work together. She congratulated
With a big turnout for WOC 3’s second meeting, arranging people for the group photo took 15 minutes.
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The Study Groups had met separately the day before and then presented their progress reports during the WOC 3 plenary meeting. SG 3.1 Strategic gas transmission infrastructure projects Leader: Enno Freese (The Netherlands) Enno Freese gave his progress report and men tioned that 13 members were present. One of the Study Group’s activities is to make an inventory of strategic pipeline projects, to analyse the differ ences and similarities of the selected projects and After the business sessions there was time for socialising (above ) and a technical visit to the Sabine Pass LNG terminal (below ).
finally to describe the typical problems, challenges and conditions and chosen solutions. Ten strategic pipeline projects have been chosen and now all
IGU on the important role WOC 3 is playing in
the information will be collected to enable SG 3.1
gas transmission.
to carry out the analysis.
Next up was Mark Rand, the Chevron Pipe Line
Enno presented a detailed draft table of con
representative in London, who gave a very inter
tents for SG 3.1’s final report for WGC2012. He
esting presentation on the US gas industry. He was
also mentioned that two new topics will be studied:
followed by Jeanet van Dellen from the IGU
a comparison of new tariffs and regulation; and
Secretariat, who gave a short introduction to the
the global impact of major incidents on strategic
IGU structure and practices for the benefit of the 15
pipeline projects. As an area of concern he said
new members present. Then Ho Sook Wah gave a
that the time schedule was very tight and asked
presentation on the current IGU and CC activities.
whether everyone could deliver input as promised. SG 3.2 Integrity of gas transmission systems and footprint reduction Leader: Mohd Nazmi-bin-Mohd-Ali-Napiah (Malaysia) Nazmi gave his progress report and mentioned that 19 members were present. He said that the response to the questionnaire sent out to WOC 3 members had been disappointing (SG 3.2 received replies from 25 companies / organisations in 23 countries), and urged all those who had not replied to do so to get a good picture of all regions of the world. He also presented a detailed draft table of contents for SG 3.2’s final report for WGC2012. SG 3.3 Securing sufficient expertise to operate gas transmission systems safely and adequately Leader: Barbara Jinks (Asutralia) Barbara Jinks gave her progress report and men
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l Vladimir Bychkov (Russia – Gazprom Expo LLC)
tioned that nine members were present. She said
on inspection patrols by unmanned aircraft;
that SG 3.3 had sent out a questionnaire on
l Daniel Falabella (Argentina – TGS) on the
August 6, 2010 with 36 questions. Up to the time
Tierra del Fuego project; and
of the Houston meeting there had been 22 replies,
l Yuri Dergausov and Sergey Popov (Russia –
and she urged missing countries/companies to reply. SG 3.3 needs more input from Africa,
Spetsneftegaz) on Spetsneftegaz and the
China, the Middle East, South America and the
company’s in-line inspection (ILI) tools. Once business had been concluded, Chevron’s
USA. Barbara also concluded that it would be good to have the views/input of gas associations
Hector Fajardo provided information about the
in addition to individual companies, and that there
social event (baseball – Houston Astros vs. Los
is a need to conduct key interviews. Finally, she
Angeles Dodgers – in the Minute Maid Park) and
presented a detailed draft table of contents for SG
the technical visit to the Sabine Pass LNG Terminal.
3.2’s final report for WGC2012.
Finally, the Chairman thanked Hector Fajardo for Chevron’s kind hospitality.
Eric Dam thanked the Study Group Leaders and their members for the detailed progress reports and he called on to all WOC 3 members
l Working Committee 4 – Distribution
to help by informing the Study Groups about best
The third meeting of WOC 4 was kindly hosted by
practices in their companies.
Tokyo Gas in Tokyo, Japan, September 28-October 1, 2010. It was a real success in terms of activities,
After the SG progress reports the following interesting presentations were given:
targets reached and attendance. In fact 45 dele
l Dong Jiu Zhang (China – Beijing Tianhuan Gas
gates took part in the meeting, and among them
Company) on the China Gas Association and
we welcomed new members coming from India,
the status of gas development in Beijing;
Thailand and Russia. This means that participation
The fantastic view from the venue for WOC 4’s third meeting in Tokyo.
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WOC 4 members pose for a group photo as they start the social tour at the end of the meeting.
in WOC 4 is more diverse, and it contributes to
focusing on the planning and submission
widening the experiences that can be shared
deadlines for the call for papers.
among the members.
To close the morning we had a very interesting
The meeting started as usual with an introduction
small exhibition on smart gas metering in Japan,
by the host on the gas industry in their country.
kindly arranged by the colleagues from Osaka
Kenji Ikejima, Managing Director of The Japan
Gas Co. This gave delegates “hands-on”
Gas Association, explained in detail the current
experience of the technologies adopted on real
status of the city gas industry of Japan and its
meters and communication systems, and allowed
safety-related activities. His presentation was
them to exchange information through an open
followed by two very interesting ones on the topics
discussion with Osaka Gas Co. engineers.
under study in WOC 4. Eiji Yasuki, Manager of the General Safety & Distribution Control Department,
During the afternoon the work went on as usual via separate meetings of the three Study Groups:
Pipeline Business Unit at Osaka Gas Co., gave an in-depth analysis of the events that occurred
SG 4.1 Gas distribution safety management systems
during and after the Hanshin earthquake, and the
Leader: Ben Lambregts, Liander (The Netherlands)
anti-earthquake measures adopted after this experience. Then Takashi Tanaka, General
SG 4.2 Smart metering systems: characteristics,
Manager of the Technology Development &
technologies and costs
Solutions Department at Tokyo Gas Co., talked
Leader: Kim Vrancken, Eandis (Belgium)
about his company’s approach to smart metering, from the first projects in the early 1980s to the
SG 4.3 Unaccounted-for gas: identification,
current automatic meter reading (AMR) systems.
measurement, calculation and management
Finally, CC Chairman Ho Sook Wah updated
Leader: Barbara Jinks, GHD (Australia)
delegates on the Coordination Committee’s
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activities and the planning for WGC2012. He
The Study Groups started analysis of the answers
discussed the milestones that must be reached,
received to the questionnaire that had been
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Eustream – the Gas Highway for Europe Eustream operates a large-scale high-pressure gas transmission system in the territory of the Slovak Republic. Our basic mission is to transport natural gas in Slovakia and through Slovakia to the European markets. Eustream allows access to the gas transmission network and offers its customers a wide range of transmission services on a transparent and non-discriminatory basis. The access regime is in full compliance with existing legislation and gas industry standards. The business partners of Eustream include major energy companies from EU and non-EU member states. Our key priorities are safety and reliability of operations. The transmission system operated by Eustream represents an important energy link between the Commonwealth of Independent States (CIS) and Eustream_image AD.ai 1 6. 12. 2010 23:08:52 the European Union. It is interconnected with
major European trunk lines in Ukraine, the Czech Republic and Austria. The annual capacity of the transmission system is more than 90 billion cubic metres, which equals roughly 15 times the overall domestic gas con sumption of the Slovak Republic. This demon strates how a large part of our work concerns inter national gas transit. In 2010 Eustream transported some 68 billion cubic metres of gas. Thanks to the continual modernisation and upgrade of infrastructure, Eustream contributes to ensuring safe and reliable gas supplies to Central and Western Europe whilst doing its utmost to reduce the environmental impact of its activities. Eustream, in close co-operation with adjacent network operators, is currently reviewing gas flow directions and cross-border capacities in order to enhance further the security of gas supplies to Europe.
circulated after the second meeting as a single
The Committee currently has 79 members
web-based questionnaire. There were more than
(some of them corresponding members) and of
50 replies and the data collected are thus a sound
course new members are still more than welcome
basis to work on. The questionnaire addressed
to join. For more information contact the Chairman,
specific areas of interest covering the three study
Alessandro Soresina, at alessandro.soresina@a2a.
areas, in particular:
eu, or the Secretary, Mario Pelizzoli, at mario.
l For safety management systems it addressed
pelizzoli@a2a.eu.
process safety leadership, human factors and competence, inspection and maintenance,
l Working Committee 5 – Utilisation
emergency arrangements, audit and review;
WOC 5 focuses on the downstream part of the
l For smart metering systems it addressed the
gas value chain, which plays a significant role in
meter reading process, functions and services
the sustainable development of the gas market.
of smart meters, regulation and smart meter
The Committee aims to be a platform for infor
ing, costs and benefits in smart metering,
mation exchange, to demonstrate the positive
technologies used / considered; and
impact of new gas technologies, to create and
l For unaccounted-for gas it addressed its
update databases of technical information and
definition, components and measurement, and
market data, as well as providing recommen
issues related to network operations such as
dations to the gas industry.
unbilled gas, metering and custody transfer. As the questionnaire started with a general
The Committee’s activities are divided into three Study Groups (detailed below); and two
section, with data not specifically related to a
Expert Fora (EF) have been set up in order to
single study item, a task force composed of one
integrate topics common to the three Study
member from each Study Group was set up to
Groups: EF 1 for renewables and EF 2 for
provide inputs related to the different study topics.
efficiency and gas quality.
During the morning of the second day, SG 4.2
There has been some change in the member
ran a workshop with Panasonic, one of the largest
ship of WOC 5, which currently has a total of 86
electronic product manufacturers in the world and
members from 29 countries. One of the key
with a specific knowledge of smart metering, to
changes has been in SG 5.2 where Deputy Leader,
discuss its functions, technologies for metering and
Eric van Engelen, has had to withdraw from WOC
AMR. The workshop was open to any WOC 4
5 activities due to a change of his responsibility in
member with an interest in smart metering not just
the company. WOC 5 members wish to convey
those directly involved in the study topic.
their sincere appreciation and thanks to Eric for
Traditionally WOC 4 meetings are rounded off
his contributions and dedication to the Committee.
with a “social-technical” tour. This time we visited
His responsibilities have been taken over by
the Edo-Tokyo Museum, which displays models
Frédéric Pastier of GDF SUEZ.
and life-sized recreations of structures and events to show the daily life of Tokyo during the Edo,
Third meeting
Meiji and early Showa period, and the Tokyo
WOC 5’s third meeting was hosted by Gazprom
Tower, the world’s tallest self-supporting steel
promgaz in Moscow, Russia, September 14-16.
tower, to enjoy wonderful views of the city.
Despite administrative problems with visa
At presstime WOC 4’s next meeting was due to be hosted in Dublin, Ireland, by the kind invitation of Bord Gáis Éireann, March 22-25.
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procedures, 33 members attended. The three-day programme began with WOC 5 members attending the opening ceremony of
C o mmi t t e e s
The main objective pursued by the Czech Gas Association is to provide high-quality technical and managerial support for the reliable and effective development of the gas industry in the Czech Republic
To achieve this objective, 1. CGA supports activities enhancing the image of natural gas as an energy-efficient and environmentally-friendly fuel; 2. CGA supports the transfer of latest information from all over the world to the Czech Republic; 3. CGA has represented the Czech Republic in the IGU since 1932, and takes an active part in its activities; it also co-operates with other European and global non-governmental organisations; 4. CGA represents the Czech gas industry in respect of the development of legal and technical regulations, particularly their alignment with the relevant EU legislation; 5. CGA is a publisher of the „PLYN“ (Gas) journal, the only gas industry periodical in the Czech Republic (published since 1921, circulation 3,000) monitored by worldwide Chemical Abstracts.
Czech Gas Association
Novodvorská 803/82, 14200 Praha 4, Czech Republic, Telephone/Fax +420 222 518 811 e-mail: cpsvaz@cgoa.cz, www.cgoa.cz
GasSuf-2010, an exhibition on NGVs and related
The structure of SG 5.1’s report for the 2009-
technologies and products. WOC 5 Vice Chairman,
2012 Triennium was confirmed and the tasks,
Eugene Pronin, gave an opening speech. On the
roles and responsibilities were assigned to the
second day, the three Study Groups held separate
members. Also, analysis of the questionnaires for
meetings at the Gazprom promgaz offices. On the
the report was made and the general time
third day, members were divided into two groups.
schedule going forward was agreed. At the
The first group went on a technical tour to the
plenary session on the third day, Toshikuni Ohashi
Kuryanovo sewage plant, which has biogas power
presented a case study on energy conservation in
generation facilities, and the Sminovich gas-fired
air conditioning systems in Japan.
power plant, which is the oldest power plant in Moscow having started operations in 1896. The
SG 5.2 Domestic and commercial utilisation
second group, consisting mainly of members of
Leader: Martin Seifert (Switzerland)
SG 5.3, attended the “Gas into Engines” 3rd
Deputy Leader: Eric van Engelen (The Netherlands)
Moscow International NGV Conference, which was
– succeeded by Frédéric Pastier (France) Both the Leader and Deputy Leader of SG 5.2
held at Gazprom VNIIGAZ.
were unable to attend the meeting in Moscow. In SG 5.1 Industrial utilisation
fact, only two members were present but this did
Leader: Nuno Afonso Moreira (Portugal)
not dampen their spirits. They discussed the
Deputy Leader: Egidio Adamo (Italy)
questionnaires planned for SG 5.2’s report, and
WOC 5 members at GasSuf-2010.
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made a proposal to SG 5.1 to send out the
Next meeting
questions concerning energy services jointly since
At presstime WOC 5’s fourth meeting was due to
this topic, with reference to technical overviews
take place in Livorno, Italy, March 2-4.
and market situations, is common to both Study Groups. The proposal will be passed to SG 5.2’s
l Programme Committee A – Sustainability
Leader for his concurrence.
PGC A has 59 nominated members from around the world and held its second meeting of the
SG 5.3 Natural gas vehicles
Triennium in Tokyo, Japan, September 15-17,
Leader: Eugene Pronin (Russia)
2010. The meeting was hosted by Tokyo Gas and
Deputy Leader: Davor Matic (Croatia)
attended by 26 delegates.
In Moscow, SG 5.3 members concentrated on the
On the first day, SG A.2 visited the Tokyo Gas
structure and content of chapters and subchapters
laboratory in Yokohama where biogas is produced
of the final report. The concept, vision and ideas
in a pilot plant. On the last day, a Japanese IGRC
on the structure and content were presented by
representative presented the IGRC2011 call for
those who have already confirmed their
papers, the possible links between the Technical
commitment to prepare the final report.
Programme Committee and other IGU committees
The progress of the UNECE/IGU joint study was presented to members. This is a study on the “Use
and the call for nomination of invited speakers and session chairs for IGRC2011.
of Gas in Transport in the UNECE Region”. Work and the efforts of all NGV experts will be compiled
Scope and objectives of the Study Groups
in parallel with WOC 5’s final NGV report.
SG A.1 Sustainability and investment
Updates on related external meetings, exhibitions,
Leader: Vladimir Bashkin, Gazprom (Russia)
strategic activities and technologies were also
SG A.1’s objectives are to:
presented by members during the meeting.
l Design a hydricity (i.e. the complementary use
SG 5.3 has contributed an article on NGV development to this edition of the IGU Magazine
the role of natural gas as a transition fuel will
(see pages 194-197) summarising what was
be analysed;
achieved and what targets were missed during the
b e lo w
first decade of the new century.
Figure 1.
of hydrogen and electricity) model in which
l Present the best hybrid solutions between renew
able energies and natural gas in a video; and l Study the state of development of CCS tech
nology and analyse the implications for the
P G C A LEADERSH I P
gas industry. The sub-group working on the hydricity model
Chairman Juan Puertas Spain Secretary Naiara Ortiz de Mendíbil Spain
reconsidered the purpose of this report in Tokyo, and it was decided to present the topic in a Vice Chairman Satoshi Yoshida Japan
roundtable during WGC2012 with the presence of some experts. The same approach was adopted by the sub-group responsible for the CCS study. Both sub-groups also worked on the call for papers concerning hydrogen and CCS. As regards
SG A.1 Leader Vladimir Bashkin Russia
SG A.3 Leader Satoshi Yoshida Japan
SG A.2 Leader Elbert Huijzer The Netherlands
the gas and renewables video, a questionnaire and a letter for sponsors was prepared and it was decided to contract an external company to record
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Delegates to PGC A’s second meeting pose for their group photograph (above ) and enjoy Japanese cuisine (below ).
the installations and then edit the video. Some of
tion in emissions in each process and a reduction
the best practices have already been chosen.
in the environmental impact of each activity.
SG A.2 Integrating other gases into the natural
agreed the structure of the report and final deliver
gas industry
ables in terms of chapters and pages. The authors
Leader: Elbert Huijzer, Liandon (The Netherlands)
of each chapter were appointed and they agreed
SG A.2 aims to set the basis for the natural gas
to integrate the work of the Methane to Market
industry to take advantage of these gases,
(M2M) Programme”, which is coordinated by the
eliminating any possibility of impact on people’s
US Environmental Protection Agency. Furthermore,
health and the useful life of installations.
delegates agreed SG A.3’s work schedule up to
During the meeting in Tokyo, the Study Group
Definitions for renewable gases were discussed
the third meeting in Serbia and worked on the call
and agreed in Tokyo. These definitions have been
for papers regarding the reduction of gas emissions.
shared with PGC E and WOC 5, which are also working on renewable gases. Furthermore, a structure was defined for a combined report with these two Committees. In addition to the meeting itself, a workshop was organised with represen tatives of the Institute of Energy Economics and the Japan Organic Recycling Organisation. SG A.2 also worked on the call for papers regarding biogas. SG A.3 Reduction of gas emissions Leader: Satoshi Yoshida, Tokyo Gas (Japan) SG A.3 aims to record best practices in the gas chain and develop a comprehensive industry guide to reduce gas emissions, which provides for a reduc
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Plans for WGC2012
welcomed 50 new members since the successful
PGC A’s three Committee Sessions will: give a
first meeting in London (February 2010). The
résumé of the work done by the three sub-groups
Committee now has 126 registered members.
(SG A.1); present the renewable gas report (SG
The second meeting was held in Oran, Algeria,
A.2); and present the comprehensive industry
September 14-16, 2010. Forty senior gas repre
guide on the reduction of gas emissions SG A.3.
sentatives from 27 different organisations in 19
PGC A is also organising Expert Fora on
countries joined in the PGC B working sessions in
“The future of hydrogen” (SG A.1.1) and “CO2
Oran. The meeting was generously hosted by
sequestration” (SG A.1.3) and a Strategic Panel
Sonatrach, which was a fantastic opportunity to
in collaboration with PGC E during which
also learn more about Africa’s largest gas pro
the video “Natural gas and renewables” will
ducer and a major LNG exporter. For those who arrived early, there was a cult
be presented.
ural tour of historic Oran before the welcoming Future meetings
dinner hosted by Sonatrach. The next morning the
At presstime PGC A’s third meeting was due to be
delegates were welcomed by Mr Benmoulay,
held in Belgrade, Serbia, March 2-4. The fourth
Division Director of Sonatrach Downstream, on
meeting will be held in Moscow, September 7-9,
behalf of Mr Benchouia, VP Sonatrach Downstream,
and the fifth in Milan, February 1-3, 2012.
followed by Fethi Arabi of Sonatrach who is the Vice Chairman of PGC B. Then Ungku Ainon, CC
l Programme Committee B – Strategy
PGC B is responsible for a wide range of issues
Secretary, gave an update on IGU’s activities. The core objective of this meeting was for the
that are fundamental to our future business
Committee to share the outputs from the last six
prospects, including regional and global gas
months and continue the progress from the last
demand, gas supply, international pipeline gas
meeting. Each Study Group held individual sessions.
and LNG trade, gas price formation trends and the interaction of regulation with corporate
SG B.1 World gas supply, demand and trade
strategy. It is not surprising that, with this interest
Leader: Jaap Hoogakker (The Netherlands)
ing and important range of subjects, PGC B has
SG B.1 reviewed the work underway to update gas
Delegates to PGC B’s second meeting made a technical visit to the Arzew LNG and LPG facilities.
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Provide energy. Protect the environment. A dual challenge for all of us. It lights our homes. Fuels our transportation. Powers our industries. Energy plays a crucial role in driving our economy and raising living standards around the world. But as populations and economies have grown, energy use has increased, and so have greenhouse gas emissions. So there’s a dual challenge: provide the energy the world needs to prosper and reduce poverty, but do it in ways that lessen our environmental impact. To supply more energy, we’ll need increased investments, new technologies and access to energy resources. To reduce emissions, we’ll need to develop innovative ways to use energy more efficiently and take a global approach to managing the risks of climate change. Everyone has a role to play – industry, governments, individuals. Every practical option must be explored, and thoughtful solutions and technologies have to be found. ExxonMobil is confident we can address this challenge so that the world can achieve both energy and environmental security. exxonmobil.com
supply and demand for each of the eight IGU
LPG facilities at Arzew. Algeria was the first country
regions, along with an update on global trade.
to export LNG commercially and today supplies a
The representatives from the National Iranian Gas
significant proportion of European LNG, as well as
Company also gave a special presentation on
delivering gas to Asia and North America. The visit
Iran’s supply and demand, giving a detailed view
was a great opportunity to visit one of the key gas
on future developments and the strategy for
plants in the world, particularly given that the
exploitation of the world’s second largest gas
previous technical visit was to Isle of Grain LNG –
reserves. The first full draft of the updated regional
one of the many regasification terminals that are
supply/demand imbalances and the corresponding
supplied by the facility.
global trade is on target to be reviewed internally by the Study Group in 2011.
PGC B Chairman Colin Lyle and the Study Group Leaders would like to thank Sonatrach for their generosity and in particular Vice Chairman
SG B.2 Wholesale gas price formation
Fethi Arabi for making the meeting such a success.
Leader: Mike Fulwood (UK) SG B.2 had presentations on four core areas of
Future plans
investigation:
SG B.1’s regional supply and demand data-set is
l The impact of globalisation on price convergence;
on target, with the first draft of a new IGU base
l Price drivers;
case for all regions ready for internal review by
l The impact of carbon taxes/cap and trade; and
the Study Group in 2011. Confirming the base
l Regional pricing models.
data, debating the resulting regional imbalances
In-depth studies on the Spanish, Russian and
and the international trade scenarios will be
Australian domestic gas markets, along with com
among the topics of discussion at the next PGC B
peting fuels and substitution in Central Europe
meeting which at presstime was scheduled to be
were presented by the authors. Gazprom gave a
held in Washington DC, March 9-10. Further work
presentation on price convergence and divergence
in 2011 will focus on updating the IGU green
of European gas prices, looking at demand
scenario and taking forward issues from the
recovery scenarios and future prices. The Study
IGU 2030 gas industry study presented in Buenos
Group also continued with its first major update of
Aires in 2009.
the IGU survey of national gas prices and price formation mechanisms.
SG B.2 has been updating the wholesale price formation database, examining both national and regional price formation methods and the actual
SG B.3 Corporate strategy and regulation
prices ranges that have occurred. An article on the
Leader: Francisco de la Flor (Spain)
results can be found in this issue of the IGU
During SG B.3’s session there were presentations
Magazine (pages 180-186).
of corporate strategies and a technical paper comparing the US Federal Energy Regulatory
team, has been working with the International
Commission (FERC) and Europe’s Agency for the
Confederation of Energy Regulators (ICER) to pro
Cooperation of Energy Regulators (ACER). The
mote cooperation and understanding between the
meeting was also an opportunity to share and
two organisations. At presstime IGU and ICER
discuss the recently completed gas value chain
were set to hold a joint workshop in Washington DC
model that the Study Group has been working on.
on March 8 to share views and discuss concerns
PGC B’s successful meeting culminated in a
about regulatory issues of global significance for
unique opportunity to visit Sonatrach’s LNG and
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PGC B, with the support of the IGU leadership
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the gas industry. PGC B Chairman Colin Lyle
would like to express his particular appreciation to
Study Groups
David Halldearn and Natalie McCoy of ICER, as
SG C.1 ASEAN+4
well as to Susan Court and Francisco de la Flor, of
Shigeki Sakamoto (JOGMEC, Japan) reorganised
SG B.3, for their outstanding efforts in organising
his team, forming new focus groups for (i) ASEAN
the workshop.
led by Lee Ching of Petronas and (ii) North-east
All the presentations from the Oran meeting
Asia (China, Japan, Korea and Taiwan) led by
can be found on the IGU website, along with
John C. Harris of IHS CERA. Figure 2 shows the
updates and details of future meetings. Please
resulting organisation of PGC C for the current
contact Harry Whitaker (harry.whitaker@bg-group.
Triennium.
com) if you require any further information.
SG C.1 concluded a number of individual coun try profiles describing infrastructure, regulations,
l Programme Committee C – Gas Markets
gas production, trade and market conditions, and
PGC C held its second meeting in Seoul, South
is now moving to the integrative analysis proposed
Korea, from September 28 to October 1, 2010. It
in the TWP, focusing on security of supply, market
was hosted by the Korea Gas Union (KGU) and
drivers and unconventional gas sources. One
Korea Gas Corporation (KOGAS).
member suggested that the Study Group should
The local organisation was impeccable, thanks
analyse regional subsidies, following the last IEA
to the diligent work of Changsoon Park of KGU,
World Energy Outlook in which a strong case is
and there was a record attendance of 30 dele
made against subsidies for fossil fuels.
gates from 15 countries. After two days of intense work, delegates visited
b e lo w
Figure 2.
SG C.2 North America
the Incheon LNG terminal, one of the largest
Following receipt of answers to a questionnaire
regasification facilities in the world. It supplies 40%
focused on its proposed work programme, SG C.2
of Korea’s gas demand and is strategically located
agreed the structure of its report, which will include
close to the Seoul metropolitan area. Delegates
themes such as the demystification of unconven
also toured the Gas Science Museum in Incheon
tional gas, environmental policies, regulatory
and Gyeongbokgung Castle in Seoul.
tendencies and new production technologies. Hydraulic fracturing has transformed the pan orama for the gas industry, especially in the USA,
P G C C OR G AN I SAT I ON CHART
where large amounts of additional gas have been made available to consumers in a relatively short
Chairman João de Toledo (Petrobras, Brazil)
period of time, a phenomenon that is often referred to as a silent revolution. As the use of this
Vice-chairman Gi-Chul Jung (Kogas, Korea)
Secretary Marcos Sugaya (Petrobras, Brazil)
technique intensifies and spreads to other parts of
External advisors
North America Rodrigo Vilanova (Petrobras America, USA)
ASEAN+4 Shigeki Sakamoto (JOGMEC, Japan)
Asean Lee Ching (Petronas, Malaysia)
NE Asia John Harris (IHS CERA, China)
Delegates
Delegates
the globe, however, environmentalists raise their
John Harris (IHS CERA) Karen Sund (Sund Energy) Katinka Barysch (CER) Michael Stoppard (IHS CERA)
voices, increasing the possibility of a new turn of events that could again change the path followed
Europe and Russia Eric Vambert (GDF SUEZ, France)
by the industry. SG C.2 will examine these con
Security of supply Martin Schwarzbichler (OMV, Austria)
Growth potential Nuno Moreira da Cruz (Galp Energy, Portugal)
Legal framework and prices Bertine Markvoort (GTS, Netherlands)
Delegates
Delegates
Delegates
cerns, setting the scenario for a debate on the future of unconventional gas. In order to prevent capacity holders from
Delegates
circumventing capacity release to the secondary market, FERC extended the prohibition that bars
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Over 20 years of LNG exports from Australia’s largest oil and gas resource development
Backed by the North West Shelf Venture’s world class reserves and safe and reliable production record, North West Shelf Australia LNG draws on the capability and experience of six leading energy companies to deliver LNG supply solutions for customers around the world. One of the world’s largest producers of LNG, the A$27 billion North West Shelf Venture facilities have a total LNG production capacity of more than 16 million tonnes a year. Since 1989 the Venture has safely delivered more than 2800 LNG cargoes to the Asia Pacific region and other parts of the world.
www.nwsalng.com.au depa maketa black.pdf
12/8/2010
3:42:55 ìì
Connecting countries, economies and people The Public Gas Corporation (DEPA) SA is the company that introduced Natural Gas in Greece by developing a modern infrastructure all over the country. DEPA today, after the unbundling, imports and sells Natural Gas to power generation, the industrial sector, distribution companies and Natural Gas Vehicles. Through strategic gas pipeline projects, such as the Greece-Turkey, Greece-Bulgaria and Greece-Italy interconnectors, DEPA Group plays a leading role in the creation of a major energy hub in South-Eastern Europe, thus bridging the energy sources of East with the European markets. DEPA promotes competition in the energy sector and contributes to the further opening of the Natural Gas market in Greece to the benefit of consumers and the economy. In today’s changing world, DEPA meets the challenges of the future with the energy that connects countries, economies and people. www.depa.gr
SG C.3 Europe and Russia Since the roundtable in Paris in May 2010 (covered in the last progress report), SG C.3 has started to produce its first analyses of gas competitiveness, security of supply costs and regulatory policies, using the approach described in the article on pages 204-209 of this issue of the IGU Magazine. The work emphasises the fact that security is something that everyone wants, but is not always ready to pay for. As a consequence, it is important to establish the cost and value of security for all parts of the gas chain. And security of supply must Delegates to PGC C’s second meeting pose for a group picture.
see security of demand in the mirror.
capacity holders from reselling equivalent
expected to come from B2B demands in power
amounts of gas shipped through interstate pipe
and industry, where competitiveness is the key
lines. SG C.2 will analyse the relevance of the
driver. Only a relatively small fraction of the
theme considering the criticism that was recently
consumption growth is likely to arise from B2C
raised against this prohibition.
demands, where regulation, image and investment
Most of the consumption and growth can be
Current low gas prices could encourage
in infrastructure would be the main drivers.
new investments in gas processing, but plant
Prices in Europe present large variations in
construction costs continue to rise, following a
composition. Energy taxes can be high in some
curious correlation with petroleum prices.
countries, while in other countries it is the distri
Meanwhile, power applications continue to
bution cost that is relatively expensive. Focus group
drive demand growth.
C.3.3 will analyse the gas value chain to shed
These themes will be further developed during
light on the reasoning behind these variations.
the next PGC C meeting, which will be hosted by SG C.2 in Houston.
WGC2012 PGC C has developed six themes for WGC2012, which have been submitted to the Coordination Committee for evaluation and final selection. It is a good moment to develop gas markets, as prices are and will continue to be very attractive. Future meetings At presstime PGC C’s third meeting was due to take place in Houston, USA, March 1-4. The fourth meeting will be organised jointly with PGC A in Moscow, September 6-9. l Programme Committee D – LNG
PGC D has 89 members from 29 countries. The PGC C delegates at the Gas Science Museum in Incheon.
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Committee’s second meeting was held in Rotterdam,
the Netherlands, from August 31 to September 1,
SG D.2 Penetrate new markets for LNG
2010. It was attended by 48 people and the work,
Leader: Ted Williams, AGA (USA)
by Study Group, is detailed below.
SG D.2 has three sub-groups tasked with: l Identifying key market drivers for the
SG D.1 Enhance terminal compatibility
implementation of LNG projects to meet and
Leader: Jean-Yves Capella, Total (France)
sustain current and future overall natural gas
Global LNG trade increased more than 30%
demand and new end-use needs;
between 2004 and 2008, and the spot market’s share jumped from 5% to 20%. However, there are still significant obstacles to its further development. Furthermore, the issue of LNG quality and inter
l Identifying barriers to entry overcome or
minimised in the course of introducing LNG supply; and l Formalising analysis of new market entrants
changeability remains a barrier to LNG being
based on this experience and using previously
fungible in all markets.
applied methods or develop new analytic
The scope of this Study Group is to gather receiving terminal data as regards ship compati
approaches. The Study Group has set up regional working
bility with the objective of providing recommen
groups (Americas, Asia, Europe and the Middle
dations for further enhancing compatibility. There
East) to carry out market analysis for its case
are four sub-groups:
studies. Work has started based on a matrix of
l Operational safety – LNG facilities and
market drivers and barriers which was refined
carriers, Eric Gerard and Sander Lemmers
thanks to the contributions of newly attending
gave a presentation;
Study Group members. They added forward-
l Characteristics of LNG carriers, Carlos de la
Vega will give a presentation at the next meeting; l Characteristics of LNG facilities, Richard
Lammons gave a presentation; l New creative LNG facilities, Jeroen de Groot
looking analytical considerations of new environ mental / sustainability policies (as drivers and barriers) and further development of regional, transnational gas markets (driver). The working groups’ progress will be tracked through monthly
gave a presentation.
communications between their coordinators and
There were additional presentations by Luis
the Leader and Deputy Leader of the Study Group.
Gorospe (compatibility of the Enagás terminal in Barcelona) and Yoichi Mori (operator training
SG D.3 Enhance efficiency in the LNG value chain
simulator).
Leader: Rob Klein Nagelvoort, Shell (The
Going forward, SG D.1 will seek to avoid dupli
Netherlands)
cation of efforts in database creation by requesting
SG D.3 has sub-groups reviewing:
access to the GIIGNL and SIGTTO databases.
l The status of operating / new / future projects;
SIGTTO will be invited to participate in meetings,
l New on- and offshore technologies;
and Qatargas will be asked to involve a captain in
l New LNG operations;
the Study Group. The aim is to produce a report
l Different construction approaches;
which helps newcomers to the gas industry build
l The enhancement of efficiencies in existing
compatible LNG facilities, and to develop
facilities;
recommendations to “bridge” or “link” SIGTTO,
l The efficiency of “wells to electrons”;
GIIGNL and ISO standards.
l New uses of LNG;
SG D.1 has also contributed an article to this issue of the IGU Magazine (pages 216-220).
l Gas price vs. efficiency; l Utilisation vs. efficiency.
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Global LNG trade has surged but still faces challenges – (above ) HH the Emir of Qatar, Sheikh Hamad Bin Khalifa Al-Thani, at the ceremony marking Qatar’s achievement of an LNG capacity of 77 mtpa in December 2010 and (b e lo w ) the offshore production platform for Australia’s Pluto LNG which will ship its first cargo later this year.
The Study Group is preparing a number of case studies: l Gas production – unmanned platforms / wet
trunk line, by Wouter Pastoor; l LNG production – highly-efficient LNG designs,
by Rob Klein Nagelvoort, and highly-efficient LNG operations, by Jeroen van Hooijdonk; l LNG transport – pressurised LNG, propulsion
developments, size of ships and hull shape, speed optimisation, management of boil-off gas (BOG), author to be advised; l LNG regas – air vaporisers, cold utilisation,
floating terminals, integration with power plant, by Phil Redding; l Gas transmission – pipeline leakage
elimination / reduction, by Dimitri Udalov; and l Gas utilisation – small-scale LNG, electricity, by
Vaclav Chrz. Future meetings PGC D’s third meeting will be held in Warsaw, Poland, May 16-18. The fourth meeting is scheduled to be held in Beijing in September and the fifth in Madrid in February 2012.
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FPSO
• • • •
Snøhvit
FSRU
A highly skilled organization with a wide range of competence gained through LNG operation since 1973 Merging competence, innovation and technology development The company operates a fleet of seven LNG carriers, including two Shuttle and Regasification Vessels (SRV) A fully integrated company with in-house fleet management www.hoeGhLNG.coM
l Programme Committee E – Marketing
to understand better the consequences of political
PGC E held its third meeting in Barcelona, Spain,
decisions relating to energy. One other brilliant
November 17-19, 2010. The meeting was hosted
presentation was given by Roland Mett, Director of
by Gas Natural Fenosa and Sedigas, and brought
Marketing at Gas Natural Fenosa and Vice Chair
together 28 members from 17 countries.
man of PGC E. He presented the merger of Gas
During their stay in Barcelona, delegates were
Natural and Unión Fenosa from a branding per
invited for a breakfast session at the new premises of
spective, taking delegates through the complex
Sedigas, the Spanish Gas Association. The President
process of creating a new brand and a corporate
of Sedigas welcomed the group and gave an
brand strategy.
interesting presentation on the Spanish gas industry. The further sessions took place at the premises of
Due to the extensive plenary programme, there was less time than usual for the Study Group
Gas Natural Fenosa. The programme for this PGC E
sessions. Nevertheless the meetings were effective
meeting was quite tight with many interesting
and members progressed in their work.
presentations and discussions during the plenary sessions. They included a case study of a rapid
SG E.1 Natural gas and renewables
pilot project to establish what the media is saying
Leader: Uwe Klaas, DVGW (Germany)
about gas, which was given by Nik Vitkovitch and
SG E.1 will identify the position of natural gas in
Jonathan Coham from CARMA International
combination with renewables in the future energy
(Global Media Analysts). There was also a work
market. During the meeting, the Study Group
shop run by Anton Bujis, the Chief Communication
concentrated on the key words necessary for the
Officer from GasTerra and member of PGC E,
call for paper process. Several case studies have
who presented the energy transition model. This is
been selected which will be followed up by mem
a transparent, comprehensive, fact-based and
bers. These cover large-scale projects (e.g. in
independent model about energy-related matters,
Egypt and Finland) and combined uses at the level
ranging from CO2 emission levels to sustainability
of private consumers (e.g. in Germany, Iran and
targets. It is an online tool designed to help users
Japan). The aim is to have the first draft of the case studies ready for the next session in May. SG E.1’s main problem so far has been that while many combinations of natural gas and renewables could be identified, marketing of the issue has been minimal. However, this seems to be changing now as examples from Egypt and Germany show. Work is progressing on a film project showing successful combinations of gas and renewables. This project is under the leadership of PGC A and the final film will be shown at WGC2012. SG E.2 Marketing campaigns Leader: Urs Zeller, Swiss Gas Industry Association (Switzerland) SG E.2 focuses its work on analysing the business
PGC E delegates pose for a group picture at Gas Natural Fenosa’s headquarters in Barcelona.
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behaviour in marketing across different sectors. A questionnaire has been developed to collect the
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Answers for energy.
l A reputation model to allow IGU to highlight key
issues, key voices and media trends over time. SG E.3 will continue the work with CARMA anal ysts on this subject and present a study in 2012. l Online gas advocacy platform (IGU). SG E.3
wants to give a precise recommendation to IGU on how to further strengthen its online presence. This project is in progress. l SG E.3 at WGC2012. SG E.3 has submitted a
call for papers on the image of natural gas and it is planned to outline the Committee Session on this topic during the next meeting in May. A detailed table of contents for the SG E.3 report
Members of SG E.2 enjoying their work.
will be prepared by then. necessary information and a test version was pre
l IGU communications advice. SG E.3 has
sented during the meeting. Subsequently, the link to
proposed offering advice to IGU on the work
the survey was sent to all contact persons of IGU
being carried out by PFC Energy on the next
(Charter and Associate Members). The first results
steps in the Union’s communications work.
will be discussed during the next meeting in May. The Study Group also discussed how to present
WGC2012
the results at WGC2012. The idea is to give a
PGC E is planning two Committee Sessions, one
view of the key factors of success as well as pitfalls
looking at the image of natural gas (a presen
and possible failures in marketing behaviour, and
tation of SG E.3’s work), and the other being a
show the major marketing mixes and instruments
“green forum” with representatives from NGOs
for the different sectors.
such as the Bellona Foundation, Greenpeace, Worldwatch Institute and WWF.
SG E.3 Image of natural gas
It is currently envisaged that the report presen
Leader: Hansch van der Velden, Nederlandse
tation of SGs E.1 and E.2 will not take place in the
Gasunie (The Netherlands)
sessions mentioned above, but will be part of an
SG E.3 will investigate the image of natural gas
Expert Forum. Experts from the call for paper
and the drivers of successful communication and
process will be chosen for this session.
advocacy activity in this area. Its main deliverable is the development of IGU guidelines on commu
Miscellaneous
nication strategies to support the gas industry in
PGC E currently has 60 members and two
improving the image of gas.
corresponding members from 22 countries, and
The work of the Study Group is split into the l Country case studies to investigate the role and
image of gas in 10+ countries around the world by using a questionnaire and carrying
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new members are still welcome. The next meeting will take place in Prague, May
following project work streams:
25-27, by the invitation of RWE Transgas and the Czech Gas Association. Marc Hall is the Chairman of PGC E. For more
out expert interviews. The studies will also
information, please contact him at Marc.Hall@
identify advocacy campaigns and their impact.
bayerngas.de or the Secretary of PGC E, Barbara
Work is in progress.
Schmid at Barbara.schmid@bayerngas.de.
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About Pluspetrol PLUSPETROL, one of the E&P private companies in Latin America with a great development in the last decades, is today the fourth producer in Argentina, where it first operated, and the largest in Peru. The Company has operational experience in large gas fields, sensitive contexts, inhospitable and geological complex zones and technical expertise in enhanced recovery, heavy crude extraction in remote zones and exploitation of mature fields and marginal areas. Today, it has a total operated production of 367 MBOE/d and net proven reserves of 1,165 MMBOE. PLUSPETROL, present in Latin America and Africa, has the conviction that operating in highly
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A COMPANY WITH ENERGY THAT PRODUCES ENERGY
www.pluspetrol.net
best practices. Finally, a series of about 20-30
Progress Reports from the Task Forces
interviews will be conducted by TF 1 members with experts from the energy industry, academics, futurists and politicians. The participants will be asked to express their opinions on topics such as
This chapter contains news and information from
the role of gas in the future energy mix, the
IGU’s three Task Forces.
opportunities and challenges the gas industry is facing and, of course, the attractiveness of the
l Task Force 1 – Building Strategic Human
industry to human talent.
Capital
TF 1’s Vice Secretary, Marius Popescu, presen
The third meeting and first workshop of TF 1 were
ted some preliminary results of the demographic
hosted by Qatargas in Doha on October 19,
survey and explained that the survey had so far
2010, coinciding with the IGU Executive
been distributed via email, post and telephone to
Committee and Council meetings.
more than 600 companies. At the time of the Doha meeting, more than 70 companies had
b e lo w
Table 1.
Third meeting
replied. About 48% of all replies came from
TF 1’s third meeting was attended by 22 members
Europe, 20% from Asia and 14% from South
representing 16 companies. Vice Chairman, Rod
America. More replies are expected to come in,
Kenyon, kicked off proceedings with a full recap of
especially from North America and the Middle
ongoing projects. TF 1 has developed an online
East. Early results show, among other things, that
survey to collect statistics on human resources (HR)
with regard to recruiting talent, most gas com
and map out the demographics of the gas indus
panies feel that there is a shortage in technical
try. In order to complement the static picture pro
and projects skills and find it particularly difficult to
vided by the demographic survey, the Task Force is
fill their positions in the operations/production and
collaborating with Schlumberger to develop a
engineering/construction sectors. With regard to
qualitative survey that focuses on the dynamics of
talent retention, the survey found that gas employ
human capital in the gas industry, HR policies and
ees rarely leave a company for compensation reasons and that they prefer to take up a similar position with a different energy company over a
TF 1 W OR K SHOP SPEA K ERS
different position within the same energy company. The results vary with location and company
Mr Essa Rashed Al Kaabi, Chairman, Qatarisation Committee
profiles; a comprehensive interpretation of the
Mr Deya A. Elyas, Director Staffing Services, Saudi Aramco
results will be released in the near future.
Mr Shukri Al Mandhari, HR Director, Oman LNG
Olivier Soupa (Schlumberger Business Consul
Mr Hossein Taghi Nejad, NIGC, Iran
tancy) introduced the HR survey that Schlumberger
Mr Steve Surrall, Asset Manager, BG
conducts every year for the upstream oil and gas industry. Drawing on this experience and on
Ms Martha Desmond, HR Director, BG
Schlumberger’s resources, Olivier has developed a
Mr Dave Pinchbeck, Director, European Gas Research Group, GERG
first draft for TF 1’s qualitative survey. This second
Ms Liu Zhao Yan, Shenzen Gas Corporation
survey, as the name suggests, seeks more quali
Mr Jorge Paulo Delmonte, Gas Manager, Brazilian Institute of Petroleum & Gas, IBP
tative information with regard to HR policy and best practices. This survey will take into account the particularities of the gas industry such as the
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integrated value chain (in contrast to the oil industry, key resources are not restricted to the geosciences and petroleum engineering sectors), volatile environment (severe price variations), gasto-gas competition and gas in a low-carbon future energy mix. The qualitative survey is aimed at understanding the dynamics of talent in the gas industry and is meant to complement the quanti tative information of the demographic survey and a third, detailed survey. Jon Butterworth from National Grid provided an update on the interviews with experts. So far 10 have been carried out. Some of the experts
A business session during TF 1’s third meeting in Doha.
expressed their concerns that the gas industry risks becoming a sunset industry if it does not speak out
IGU President, who talked about the challenges
with a clear voice. Others expressed optimism and
faced by the gas industry globally and the work
hopes for the potential of natural gas to comple
IGU is doing to promote the industry’s image. The first speaker, Essa Rashed Al Kaabi, spoke
ment renewable energies in a low-carbon future. As more interviews follow, we look forward to
about Qatarisation in the energy sector. He shared
learning the opinions of some of the most influ
his insights on the concept and the achievements
ential persons linked to the energy industry.
of the programme to date. The main highlights of his presentation were: l Companies were involved from the beginning
First TF 1 workshop
and there is strong linkage with universities;
The workshop focused on “Recruiting and
l Although the current target is to have 50% of
Retaining Talent in the Gas Industry: Challenges and Opportunities in the Middle East”, and was
the workforce as Qatari nationals, the
very well attended with over 80 people from
programme is a continuous and rolling one; l There is structured governance at all three
across the world.
levels i.e. corporate (strategic), departmental
There were two panel sessions and nine speak
(operational) and individual (developmental);
ers (see Table 1). In the first session speakers from
l There are three main processes – recruitment,
Saudi Arabia, Iran, Oman and Qatar debated
training & development and career progression;
specific regional issues including the policies of
l The main challenge is to attract and retain
countries and companies for the development of local talent, the growing participation of women in
quality Qatari resources in view of competition
technical roles, and how companies work together
from newer and more exciting career choices. Deya A Elyas (Saudi Aramco) also highlighted
with academic institutions to motivate young
the theme of nationalisation of the workforce. The
people. In the second session representatives from Europe, China and Brazil shared their views on the
key points of his presentation were:
HR issues in their relevant countries/regions.
l Due to the cyclical nature of the petroleum
The workshop started with introductory remarks by Ieda Gomes, Chair of TF 1. She welcomed all the speakers and participants and presented a brief context. She was followed by Datuk Abdul Rahim,
industry it is challenging to attract talent, especially engineers; l The industry is not a preferred choice for young
talent, although the recent financial crisis did
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l Appropriate actions that Oman LNG has taken
include a focus and commitment from top man agement, a differential developmental pro gramme based on competence and the provision of opportunities within the limited scope. Hossein Taghi Nejad (NIGC) spoke about the chal lenges and opportunities in attracting and retaining talent. Some of the key points of his talk were: l There are challenges due to the industry’s poor
image, the regional security crisis, competition from other countries, a limited pool of skilled people, tough job conditions and salary limitations due to legal restraints; l To compete in the global arena NIGC has recog
nised the importance of people and given strate gic importance to attracting and retaining talent; l It provides its employees with development
opportunities by job rotation, the identification and development of fast trackers and man aging the work environment. The second session of the workshop provided views from outside the Middle East region with representatives from Europe, Brazil and China. Chair Ieda Gomes addresses TF 1’s first workshop (top ) which was very well attended (a b ov e ).
Steve Surrall and Martha Desmond (BG) pre sented a view of the challenges facing global gas companies, such as BG, and what policies are being
provide an opportunity to highlight the job
developed by their company both on a global scale
opportunities available;
and at the regional level. Steve’s talk was focused on
l Talent attraction and retention is a strategic
European gas market fundamentals, development of
priority in Saudi Aramco which offers its
the market and structural changes, the changing
employees a “value proposition” that goes
supply profile and the role being played by gas in
beyond monetary benefits and looks at overall
de-carbonisation. Martha’s talk highlighted the
development and building careers;
opportunities and challenges such changes will
l Saudi Aramco adopts models of excellence and
132
present from the human capital perspective. She
follows best practices from around the world.
talked about the social and economic factors
Shukri Al Mandhari (Oman LNG) shared
influencing the strategies of companies to attract and
insights on the retention of talent. His views could
retain talent, and about challenges in finding people
be summarised as follows:
to work in newer areas like unconventional gas, in
l Oman LNG faces challenges to attract and
the LNG sector and in less attractive mature markets.
retain talent due to the nature of the business,
Martha also mentioned some measures to mitigate
remoteness of location, small pool of talent
the challenges such as fast track development, the
and limited opportunities it can offer as a small
sharing of knowledge, strategic partnerships and
and flat organisation;
recruiting in skill-rich markets.
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l Establish a career path and create a position
Dave Pinchbeck (GERG) talked about his
matrix;
organisation’s contribution in promoting the gas
l Regulate guidance and corporate culture.
industry amongst educational and research institutes. One of the main objectives of GERG
Jorge Delmonte (IBP) started off his presentation
is to facilitate and enhance interaction between
by looking at the development of the gas sector in
academia and industry. In its communications
Brazil and its future potential with regards to the
to students and young engineers GERG high-
resources available. He then talked about the HR
lights the fact that the gas industry promotes
programme created in 1999 by the National
sustainable energy solutions and invests in
Petroleum Agency (ANP). The programme, which
R&D whilst offering challenging and rewarding
provides scholarships and grants to universities, is
career opportunities.
funded through an industry royalty based on the
Liu Zhao Yan from Shenzen Gas Corporation
oil and gas that is being produced. The Federal
focused her presentation on the growth of the
government has also developed a programme
Chinese gas market and the huge potential it
called PROMINP which encourages the develop
offers in the future. The Chinese gas market is
ment of a local support and service industry on a
expected to treble in size in the next decade with
competitive and sustainable basis. PROMINP has
the dependence on imported gas increasing to
developed a national plan to identify skill shortages
around 50% from the current 13%. She talked
in critical areas related to the oil and gas sector
about the growth in infrastructure, both in
and formulate a plan to meet these shortages. The workshop was hosted by Qatargas and
transmission and distribution, and stated that HR policy in China is underpinned by three pillars:
supported by TF 1 sponsors Oman LNG and Total.
l Make the best possible use of each employee; l Task Force 2 – Nurturing the Future
Generations TF 2’s second meeting was hosted by The Hong Kong China Gas Company Limited (Towngas), August 19-21, 2010. Delegates were treated to a welcome dinner at the Flame restaurant, which is owned and operated by Towngas and where the chefs use cooking appliances developed by Town gas engineers. Hosted by General Manager – Customer Service, Peter L.S. Wong and General Manager of Production, Shan Man-Fai, the dinner was an opportunity for newcomers to get to know each other. Delegates were also briefed on Hong Kong’s town gas distribution system and manage ment, and were impressed by Towngas’s emphasis on customer service and safety. The meeting kicked off the next morning at the headquarters of Towngas. It was attended by 10 people including three new members – Heike Boss TF 2 members pose for a group photo during their second meeting of the Triennium.
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of Shell (Singapore), Antony Seigel of BG Group (UK) and Melody Yeung of Towngas. In her welcome
F orces
together the best practices that can be adopted or emulated by the global gas industry. Then Vice Chair, Agnès Grimont, gave an update on IGRC2011. The Chair welcomed any future collaboration between TF 2 and IGRC, and she proposed that the partnership be determined after receiving the outcome of the strategy study. Day two was dedicated to discussing the Youth Team initiatives. The Digital Marketing Team Leader, Dr Amir Adam Hon, presented the pro gress of work on TF 2’s website and social media channels. Updates and fun information on gas will be distributed via Facebook and Twitter, and the team plans to link the channels to www.igu.org for better access by members. The website was due to go live by March and will be kept online up to two months after WGC2012. The Youth Team Leader, Suhana Sidik, gave an
TF 2 also made a technical visit to the Towngas Technical Training Centre.
update on events being planned to attract the younger generations. There will be pre-WGC2012
address the Chair, Soh Mey Lee, said that TF 2’s
events to promote STEM among youngsters and
work is making good progress despite initial
these will be organised via selected science centres.
teething problems and is now better resourced.
On-site activities during WGC2012 will be organ
There are 14 team members at Tier 1 level. TF 2’s
ised as part of a science and technology carnival,
Secretary, Jasmin Ramli, gave a brief update on
and we hope selected youths from every country
the membership and invited members to encour
represented in IGU will participate. Currently, the
age more people to join the Youth Team. “The
team is also identifying role models/young engin
workforce is needed at on-site events during
eers to be used as our “ambassadors”. They will
WGC2012 itself,” added TF 2’s Chair.
be nominated for onstage panel discussions with
Soh Mey Lee continued by giving an update on the framework and status of TF 2’s project “Nurtur
industry leaders on selected themed topics through our Youth Ambassadorship programme.
ing the Future Generations”. Consultants for the
the Towngas facilities. The Technical Training
appointed and work is currently underway. The
Centre provides comprehensive gas engineering
strategy study will assess the efforts of governments,
training for the company’s technical staff and con
corporations, academia and industry associations
tractors, and we were impressed by the all-inclu
to raise the interest of young people in science
sive training facilities that include workshops, class
and mathematics.
rooms and a laboratory. The visit continued to the
For the next session, team members gave pre
136
TF 2 ended the meeting with a visit to some of
project’s strategy study and website have been
Towngas Grid Control Centre and Customer
sentations on efforts to promote science, techno
Service Hotline Centre. We were surprised to note
logy, engineering and mathematics (STEM) educa
that there were Bahasa Indonesia and Tagalog
tion in their respective countries. The challenge for
speaking staff to cater to the many domestic help
TF 2 now is to collate the information and put
ers in Hong Kong in case of any gas-related chal
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lenges in their respective residences – come to
l Eni S.p.A., general sponsor;
think of it, that was customer service par excellence!
l CPC Corporation, Taiwan, partial regional
roundtable sponsor; and
The team also had the opportunity to visit the
l Taqa Arabia, regional roundtable sponsor.
Hong Kong Science Museum in Kowloon. It was
Since our last update, the work of the Task
an eye-opener as the team learned the art of designing science presentations and exhibitions to
Force has been largely focused on organising a
attract the younger generations. The farewell
series of regional roundtable events to build
dinner was again hosted by Towngas, when team
understanding of regional geopolitics and how
members enjoyed Hong Kong’s freshest seafood.
they impact gas market development. The first of these roundtable events, focused on
At presstime the third meeting and a round table session were due to be hosted by GDF SUEZ
the Asia-Pacific region, was held on November 23,
in Paris, March 16-18. Representatives of TF 1 and
2010 in Taipei, Taiwan. Attended by a wide cross
WOC 2 were expected to join the roundtable session.
section of 18 senior individuals from the gas industry and academia, the workshop was focused
l Task Force 3 – Geopolitics and Natural Gas
on developing a deeper understanding of regional
The members of TF 3 are very pleased to report
geopolitical issues.
that we have secured a number of important
Our generous hosts, CPC Corporation, began
sponsorships which will allow for the undertaking
the event with an informal dinner on November 22.
of the necessary work to produce the Task Force
The workshop was then convened on November 23,
deliverables. We would like to thank the following
at the CPC Corporation office in Taipei.
organisations that have committed to provide
The discussion began with observations and
financial support for the work of the Task Force:
dialogue related to a discussion paper developed
l Royal Dutch Gas Association (KVGN), premium
for the workshop by Edward Chow from the
sponsor;
Center for Strategic and International Studies,
l Chevron, WGC2012 strategic panel sponsor;
who served as a subject matter expert for this
l Gazprom Export, general sponsor;
event. Participants offered regional perspectives
Taipei was the venue for TF 3’s first roundtable.
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TF 3 members and roundtable delegates pose for a group picture at the CPC Corporation office in Taipei.
on Mr Chow’s themes as well as key themes in the
TF 3 has been split into sub-groups that will
draft report on Geopolitics and Natural Gas from
each provide required support for a regional
the Clingendael International Energy Programme.
roundtable session. Members have agreed that
Please see Mr Chow’s article below for a summary
roundtable planning can be best accomplished via
of the discussion.
email exchanges and telephone conferences. With
Following the meeting, the GASEX Steering
this in mind a formal meeting of the full Task
Committee hosted a formal dinner for all dele
Force was not scheduled for the last half of 2010
gates, and many also took advantage of the
(the first meeting having been held in May 2010).
opportunity to attend the GASEX 2010 Conference l Asia-Pacific Roundtable on Geopolitics
and Exhibition that began the following day. At presstime, the second workshop looking at
and Natural Gas
the Middle East was due to be held on March 1 in
By Edward C. Chow
Cairo, Egypt, and will be covered in the next issue
On November 23, 2010, around 20 participants
of the IGU Magazine. Future roundtable sessions,
gathered at the headquarters of Chinese Petroleum
at which attendance will be by invitation only, are
Corporation (CPC) in Taipei, Taiwan, for the first of
being planned to cover Europe/Russia (in
a number of regional roundtable discussions that
Amsterdam, September 30) and South America
IGU’s TF 3 is convening around the world. The
(tentatively scheduled for late 2011).
purpose of these roundtable discussions is to gain
In addition to planning for the regional round
138
regional geopolitical insights that may influence
table sessions, input on the draft report on geo
the development of natural gas markets. The
politics and natural gas has been received from
collective results of these discussions will be
both Task Force participants and the Advisory
presented at WGC2012. The event was chaired by
Committee and will be incorporated as the report
Datuk (Dr) Abdul Rahim Hashim, President of IGU,
is finalised.
and enjoyed generous support from the project
P r o gr e s s
R e p o r t s
f r om
t he
Task
F orces
sponsors KVGN, Chevron, ENI and Gazprom as
with sellers and buyers favouring traditional long-
well as the regional host CPC.
term contracts indexed to oil prices on a ship-or-
A quick review of a previously distributed
pay / take-or-pay basis. There was much discussion
discussion paper was first presented by a subject
over whether this might change over time with
expert. This paper emphasised the tremendous
infrastructure growth and with second- or third-
demand growth for natural gas in Asia Pacific
generation LNG contracts. Participants foresaw a
as highlighted by the IEA’s 2010 World Energy
shift to shorter and medium term contracts with
Outlook, released the same month, which
greater pricing flexibility, but not necessarily to the
projects gas demand in the region more than
same extent as the robust spot market in the US or
doubling by 2035. Higher demand in the region
the increasingly important spot market in Western
implies that imports will increasingly come from
Europe, as long as security of supply is at a
greater distances, from outside the region by
premium. Diversity of gas supply sources is also
long-haul pipelines and LNG cargoes, with
viewed as important by each importing country.
attendant vast upstream investments and infrastructure expansions. At the same time, there are regional border
A point was made that liberalisation works better in mature markets than for rapidly growing markets that require major investment in new
disputes, including key maritime areas and
infrastructure. The gas business in the region
potentially vulnerable choke points, such as the
values long-term and personal relationships. As
Straits of Malacca. This was highlighted for the
trust in market mechanisms builds, there may be
participants in the Taipei roundtable by a military
more scope for sub-regional market development,
skirmish on the Korean Peninsula on the day of
such as in north-east, south-east or southern Asia.
the meeting. Numerous subjects for discussion
However, participants did not see this immediately
touching upon geopolitical tensions in the region, the search for security of supply by major consum ing countries, and whether market development would lessen or exacerbate these tensions were suggested to the participants by the subject expert. A lively discussion ensued. The economic rise of China and India was seen in favourable terms and their growing geopolitical influence was acknowledged as a natural develop ment that needs to be accommodated by tradi tional powers, including the USA, over time. The world is shifting to a more multi-polar mode with the end of Cold War bilateralism and a shorter period of unilateralism. The rebalancing of geo political influence should not be feared with selffulfilling negative consequences. Natural gas demand in the region will be driven by income growth, economic efficiency and traditional environmental – not climate change – concerns. Security of supply and demand remain impor tant factors for the region’s major gas players,
Datuk Rahim thanks CPC Corporation’s Shein-Wei Lai (standing left ) for hosting the roundtable.
Pro gress
Reports
fro m
the
Task
F orces
139
over the horizon. Market integration was seen as
will be developed in the future was seen as a
better accomplished on a business-to-business
crucial question.
basis, which de-emphasises geopolitics, rather
There was some discussion on the impact of
than on a government-to-government basis,
unconventional gas, but most of the discussion
which highlights geopolitics. The growing
was on numerous conventional gas opportunities
cooperation between international oil companies
in Asia-Pacific. However, forays by Chinese and
(IOCs) and national oil companies (NOCs) in
Indian companies into shale gas plays in the US
equity investments in natural gas was also
were seen as interesting signals that may portend
discussed. It was noted that best practices can
greater potential for the region. The role of reg
be shared across the region even without
ional and international organisations in pro
market integration.
moting natural gas development in Asia-Pacific
Some concerns were expressed over barriers
was discussed and dismissed as their impact is
to market growth, such as price subsidies and
likely not significant. These organisations
bureaucratic hindrances. In spite of promises
included ASEAN, Asia-Pacific Economic
made by countries in the region at G20 meetings
Cooperation (APEC), Shanghai Cooperation
that energy subsidies will be removed by 2020, a
Council (SCO), GECF and IEF.
high degree of scepticism was expressed that this
The discussion benefited greatly from the
would actually be implemented in national
active participation from representatives from
policies. Instead, price volatility is seen as a more
diverse countries in the region, including
practical concern for investing in new infra
Australia, India, Japan, Malaysia, Singapore
structure that allows markets to absorb more gas.
and Taiwan.
Territorial disputes were discussed with a gen
Asia-Pacific was perceived by all the parti
eral belief that it may be possible to jointly
cipants as a region of vast opportunity for the
develop resources in disputed areas before
growth of natural gas. They tended to emphasise
thornier issues over political sovereignty can be
issues directly impacting demand and project
resolved. The probability of military conflict over
economics and less on geopolitical risks asso
territorial disputes was considered low given how
ciated with the future development of the gas
closely linked countries in the region are
market and how it will be supplied. This can be
economically. Questions came up on better
seen as a sign of optimism. On the other hand,
coordination of maritime protection in the Indian
it is the responsibility of TF 3 to bring to light
Ocean, South China and East China Seas as the
geopolitical concerns so that they can be
naval capabilities of India and China improve.
addressed during the Triennium and, if properly
LNG was seen as predominating over long-
managed, not hinder further growth of the
haul pipelines as a means of avoiding geo
industry. This roundtable for Asia-Pacific was a
political obstacles and increasing supply flexi
good first step in integrating regional issues into
bility. The one exception might be China which
the global picture.
may be willing to pay a premium for pipeline
140
gas from Central Asia, Myanmar and Russia
Edward C. Chow is a Senior Fellow, specialising
given its geographic location and concerns over
in energy and national security, at the Center for
security of maritime supply routes. By contrast,
Strategic and International Studies in Washington,
importing pipeline gas from the Gulf or Central
D.C, who was engaged as a subject matter
Asian countries for India was viewed as more
expert for the Asia-Pacific Roundtable Forum on
speculative. How Iran’s vast natural gas potential
Geopolitics and Natural Gas.
P r o gr e s s
R e p o r t s
f r om
t he
Task
F orces
FEATURES This issue’s features section starts with a profile of the gas industry in Brazil which is hosting the April 2011 Executive Committee meeting. Then we have coverage of the UN climate change conference in Cancún, where IGU organised a symposium with the Worldwatch Institute, followed by a profile of the gas industry in Mexico, IGU’s latest Charter Member. Eight Technical Committees have contributed to this issue and there are articles from PGC A – Sustainability, PGC B – Strategy, PGC C – Gas Markets, PGC D – LNG, PGC E – Marketing, WOC 2 – Storage, WOC 3 – Transmission and WOC 5 – Utilisation. There are also articles from the European Federation of Energy Traders (EFET) and the International Group of LNG Importers (GIIGNL). We round up with obituaries of two leading figures in the gas industry, a description of the publications and documents available from IGU and the events calendar.
143
Oil or gas? Biodiesel or ethanol? Solar or wind power?
How about having them all?
The world’s energy demand is constantly growing and one of the roles of Petrobras is to develop new ways to produce this energy. In order to attain further diversification, it makes
www.petrobras.com This is not an offer of shares. Any public offering of Petrobras shares will be made by means of a prospectus containing
continuous investments in natural gas, biofuels and other alternative, renewable energy sources like solar and wind power. If the future is a challenge, Petrobras is ready.
detailed information about Petrobras and the offering.
Manufactured gas networks were subsequently
The Brazilian Gas Industry
developed in other Brazilian cities, but it was not
By Marcos de Freitas Sugaya, Jorge Paulo Delmonte and Marcos Moreira de Xerez Sobral
used on a sizeable scale in the country. That took
until the 1950s that natural gas started to be place in the State of Bahia, where associated gas was used to serve local industry. By 1969, over
To mark Brazil’s hosting of the April 2011 Executive
3 mcm/d of gas from the States of Bahia, Sergipe
Committee meeting, the Brazilian Petroleum, Gas
and Alagoas supplied Petrobras’s RLAM refinery
and Biofuels Institute (IBP) and Petrobras have
and its neighbouring petrochemical complex.
contributed this article giving an overview of the development of the country’s gas industry from its
l The Campos Basin
early days to the pre-salt discoveries.
When global oil prices surged in the early 1970s, Brazil started a major exploratory programme in
l Early days
offshore and other prospective areas. At the time,
The gas industry in Brazil can trace its origins
oil accounted for nearly half of the country’s
back to 1849, when the country was still an
imports and severe economic crises resulted
empire ruled by the Braganças. At that time,
whenever petroleum prices increased significantly.
Irineu Evangelista de Sousa, the Viscount of
The discovery of reserves in the Campos Basin
Mauá, a visionary entrepreneur of great success
in the State of Rio de Janeiro in 1974 was a key
in sectors such as banking, steel and railways,
event, with commercial production starting in
formed a joint venture with partners in Brazil and
1977 from the Enchova field. Three decades later,
England to develop a gas lighting system for the
production reached 1.5 million b/d of crude and
streets of Rio de Janeiro. A plant to manufacture
22 million mcm/d of gas.
gas from coal was built and operations started in 1854.
In spite of the dramatic increase in production and demand experienced by Brazil, proved reserves
Brazil’s first gas plant of 1854 has been preserved in Rio de Janeiro (above left ) while the latest developments include this LNG terminal based on a floating storage and regasification unit (FSRU) in Pecém (above right ) and another one in Rio de Janeiro..
146
T h e
B r a z i l i a n
G a s
I n d u s t ry
have also increased dramatically, reaching 12.9 billion barrels of oil and 360 bcm (12.7 tcf) of gas in 2009. l Bolivia-Brazil pipeline
A most important development in Brazilian gas history was the construction of a pipeline to import gas from Bolivia, which opened in 1999 with a capacity of 30 mcm/d. Taking advantage of the new supplies, the govern ment encouraged the construction of gas-fired power plants to boost Brazil’s electricity generation capacity and back up the hydroelectric sector. The importance of back-up was underlined by a series of blackouts in 2001 and 2002, due in part to water shortages
The development of the Campos Basin in the 1970s was a key event in the history of Brazil’s petroleum industry; now the Santos Basin is yielding promising pre-salt reserves.
reducing hydro-electric output. Gas demand grew strongly throughout the last decade and today gas
to contract private companies to carry out explor
accounts for approximately 9% of the Brazilian
ation and production of oil and gas. They became
energy mix (the share of oil is 38%, renewables
effective in 1997, when the main rules were set by
32%, hydro 15%, coal 5% and nuclear 1%).
Law No. 9.478, and the National Petroleum Agency (ANP) organised 10 bidding rounds for the
l Changes in the regulatory framework
exploration of oil and gas under a concession
In 1953, with the promulgation of Law No 2.004,
regime.
the exploration and production of oil and gas
In November 2010, Brazil’s production of oil
became a monopoly of the Brazilian Union. The
and gas reached 2.1 million b/d and 66 mcm/d,
same law created Petrobras as the Brazilian
respectively, thanks to the deep water endeavours
national oil company.
of Petrobras (see Figure 1 over). Brazil has been a
In 1988, a new Brazilian Constitution was promulgated. This retained the Union’s monopoly of exploration and production activities and
net oil exporter since 2006, but still imports around half of its gas. In 2009, a law for gas was published, covering
defined natural gas distribution as a public service,
not only transmission but also storage, LNG and
a responsibility of local state governments which
other relevant matters. A complementary regula
should be provided by a state-owned company.
tion was published in December 2010, but con
Two amendments to the Constitution were made in 1995. Amendment 5 allowed local state governments to contract private companies as
tingency issues remain to be regulated by the Ministry of Mines and Energy. On the production side, three new laws
concessionaires of the public gas distribution
changed the panorama in 2010, establishing a
service. Likewise, Amendment 9 allowed the Union
production sharing regime for the exploration and
The
Braz i lian
Gas
Industry
147
G RO W TH OF O I L PRODUCT I ON
Pecém, in Ceará State (7 million mcm/d), and in Rio de Janeiro (14 million mcm/d), using an innovative design that was recognised by KPMG and Infrastructure Journal as one of the 100 most interesting infrastructure projects in the world, mainly because of its potential for replication elsewhere. Studies to develop new regasification terminals and liquefaction facilities are now under way to cope with demand. The use of floating liquefaction facilities is a possibility,
above
Figure 1.
production of oil and gas in large discoveries of
depending on the results of FEED studies that are
the pre-salt play.
still pending. This would allow LNG to be delivered to a number of regasification facilities
l LNG
scattered along the Brazilian coast.
LNG operations in Brazil started in 2006, when the Petrobras subsidiary Gaspetro and White
l Gas transmission
Martins formed a partnership called GASLOCAL to
The first 2,000 kilometres of the gas transmission
supply industrial customers and distribution
pipeline network were built between 1973 and
companies with cargoes transported by trucks
1997. Then there was a big jump in total length
from a liquefaction plant in Paulínia in São Paulo
when the Bolivia-Brazil pipeline added 2,600
State (380,000 m /d capacity).
kilometres in 1999. Subsequently, the Projeto
3
b e lo w
Figure 2.
Three years later two floating storage and
Malhas and Plangás developments expanded the
regasification units (FSRU) started operations in
network (see Figure 2). Projeto Malhas focused on transmission lines in the
G RO W TH OF G AS TRANS M I SS I ON CAPAC I TY
southern, north-eastern and south-eastern regions of the country, while Plangás was an ambitious plan to increase gas production quickly to cope with the growth in demand by the industrial and power sectors. One of the most important recent achievements of the Brazilian gas industry was the completion of GASENE in 2010,
Source: ANP.
148
a pipeline system that integrated
T h e
B r a z i l i a n
G a s
I n d u s t ry
by almost 50% over the last six years to reach
NATURAL G AS DE M AND ( M C M / DAY )
360 bcm in 2009, a third of which consists of non-associated gas.
130*
The production of gas in the pre-salt areas has already started on a pilot basis, and is
32 4
expected to reach 3 mcm/d by the end of 2011.
41
Almost 2 million b/d of crude are also expected to be produced there by 2020.
46 14.4 2.0
53
l Stakeholders
24.3
Gas producers
5.3
2009 Electrical Generation
Most of the gas production is still owned by
2014 Industrial
Fertilisers
Other Uses
* The 2014 electricity generation forecast assumes full and simultaneous operation of plants. Source: Petrobras.
Petrobras, but the participation of private and international companies is increasing (see Table 1). left
Transportation companies
Figure 3.
Law 9.478/97 implemented an unbundling policy the north-eastern transmission system with the
for transportation services, which required the
national grid. Approximately 1,400 kilometres
creation of new companies to develop, operate and
were added to bring the network to almost 10,000
maintain transmission pipelines (see Table 2 over).
kilometres today. In 2010, new volumes of gas were made
Distribution companies
available by Petrobras at Mexilhão and Uruguá-
The concession for gas distribution services is
Tambaú (Santos Basin) and in Canapu (Espírito
granted by the state governments. At the moment
Santos Basin). And in September 2010 a new
there are 27 distribution companies, selling an
b e lo w
Table 1.
record was set with the production of 5,800 MW from 30 million mcm/d of natural gas, when the total volume transported throughout the network reached 81 mcm/d. Altogether, nearly $13 billion has been invested in gas transmission during the last four years. l Reserves, production and demand
The Petrobras business plan for 2010-2014 includes a projection for 2014 that suggests a significant increase in the consumption of natural gas, led by the power and industrial segments, but large uncertainties surround the level of gas-fired electricity generation, mostly related to the role of hydropower in the Brazilian grid (see Figure 3). A significant increase in reserves is expected, mainly in the pre-salt play, sustaining the future of the
G AS PRODUCERS Field Basin Shareholders Various
Volume (mcm/d)
Campos, Santos Petrobras and others
55.3
Manati Camamu
Queiroz Galvão 45% Petrobras 35% Rio das Contas 10% Brasoil 10%
3.6
Bijupirá Salema, Campos, Pescada Arabaiana, Potiguar, Albacora Leste, Espírito Santo Camarupim Norte, Frade
Petrobras, Shell, UnoPaso, Repsol, El Paso, Chevron, FJPL
1.1
Source: Adapted from Cima F.M. et al., Atlas da Integração do Setor de Gás Natural ao Sistema Elétrico Brasileiro, Petrobras, 2010.
industry. Indeed, Brazil’s proved reserves increased
The
Braz i lian
Gas
Industry
149
average of 40 million mcm/d, mostly in São Paulo, Rio de Janeiro, Bahia, Espírito Santo and Minas Gerais. The majority of them remain under state control, but the most important ones have already been privatised (see Table 3). l The future
The discoveries in the pre-salt play, which is estimated to have potential resources of nearly 40 billion barrels, is reshaping the Brazilian oil and gas industry, bringing new challenges to its stakeholders. The availability of capital to develop new infrastructure and production facilities, such as Operations at Rio’s Guanabara Bay LNG regasification terminal started in March 2009.
Pipelines
TBG
Bolivia – Brazil
TSB
Paso de los Libres – Canoas
The technologies involved in the deepwater, Length (km)
TAG
Various
TUM
Urucu – Manaus
an important issue. Major investments in the downstream sector are also important.
TRANSPORTAT I ON CO M PAN I ES Company
new platforms, pipelines and general equipment is
2,600
pre-salt production of oil and gas are highly complex, as are the logistics of serving production facilities 300 kilometres offshore.
600 3,600 500
Source: Adapted from Cima F. M. et al., Atlas da Integração do Setor de Gás Natural ao Sistema Elétrico Brasileiro, Petrobras, 2010.
Likewise, the demand for goods, services and human resources at all levels is another matter of utmost importance to the country. In order to better understand all of these challenges, the Brazilian government created a Mobilisation Programme for the Petroleum and
above
Table 2.
PR I V AT I SED G AS D I STR I BUT I ON CO M PAN I ES
right
Table 3.
Company Location Shareholders
Operation size (mcm/d)
Comgás
São Paulo City, Campinas, Santos and Vale do Paraíba
BG, Shell
CEG
Rio de Janeiro City
Gas Natural, BNDESPAR and others
6.2
CEG-RIO
Rio de Janeiro State
Gas Natural, Gaspetro and others
4.7
BR
Espírito Santo
BR
1.8
São Paulo Sul
South of São Paulo State
Gas Natural
1.4
Gás Brasiliano
North-west of São Paulo State
ENI*
0.5
Note: *A stock purchase agreement was recently signed with Gaspetro. Source: Adapted from Cima F. M. et al., Atlas da Integração do Setor de Gás Natural ao Sistema Elétrico Brasileiro, Petrobras, 2010.
150
T h e
B r a z i l i a n
G a s
I n d u s t ry
12.5
After evaluating Brazil’s existing capacity to supply goods, equipment and services to the oil and gas industry, one of the first questions studied by PROMINP was how to foster an orderly expansion of this capacity to satisfy the country’s future needs. More than 200,000 jobs could be created by 2016. On the demand side, a promising future can also be expected for the industry. Gas is already extremely important to the security of power supply in the country, representing the main complementary energy source to hydro during dry seasons. This fundamental role will continue to be played by natural gas, as new hydro power plants are scheduled to add significant generation capacity in the near future (see Table 4). In summary, in spite of the huge challenges presented here, the future seems to be bright for Brazil’s oil and gas industry. The country is experiencing record levels of exchange reserves, Pre-salt production will help meet Brazil’s burgeoning demand for oil and gas.
steady growth and stable inflation rates, and may soon become one of the five largest producers of oil and gas in the world.
Gas Industry (PROMINP). It is led by the Minister
right
Table 4.
of Mines and Energy, with the full support of
Jorge Paulo Delmonte is the Natural Gas Manager
Petrobras, IBP and several other organisations,
of the Brazilian Petroleum, Gas and Biofuels
including service suppliers, equipment manufac
Institute (IBP), Marcos de Freitas Sugaya and
turers, unions and general associations connected
Marcos Moreira de Xerez Sobral are Senior
with the oil and gas industry.
Engineers at Petrobras S.A.
NE W HYDROELECTR I C FAC I L I T I ES I N THE M ADE I RA AND X I N G U R I V ERS Plant River Jirau
Capacity Start-up (MW)
Madeira 3,400
Santo Antônio Madeira 3,100
2012
GDF SUEZ Energy, Eletrosul, Chesf, Camargo Correa
2012 and 2015
Odebrecht, Andrade Gutierrez, Eletrobras, Furnas, Cemig, FIP
Belo Monte Xingu 11,200 2016
152
T h e
B r a z i l i a n
G a s
I n d u s t ry
Shareholders
Chesf, Queiroz Galvão, Galvão Engenharia, Mendes Júnior, Serveng Civilsan, J Malucelli, Contern, Cetenco e Gaia
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Cancún Agreement Hailed as a Lifeline
national agreement on emission cuts, is due to
By David Adam
officially, was high. After all, hadn’t the countries
expire next year. COP15, the thinking went, would need to sort a successor for there to be time to get it up and running by 2012. Expectation, at least of the world already agreed to sign a new deal in
The UN climate change meeting (COP15) in
Copenhagen fully two years previously, at highly
Copenhagen in December 2009 was widely
charged meeting in Bali in 2007?
derided as a failure. COP16 at the end of last year in Cancún has been hailed as a success. Yet,
became clear that few countries could even agree
as far as action on climate change is concerned,
on what should be agreed, never mind come close
both meetings had broadly similar outcomes:
to actually agreeing it. The resulting diplomatic
vague pledges on international action, weak
chaos saw each party push hard for its version of
targets to cut greenhouse gas emissions suggested
success to be realised: developing nations held
by countries in line with their existing domestic
fast to the principle that Kyoto should continue,
policies, little movement towards a new legally-
while the US made it clear that was not an option.
binding international deal and a reluctance to take
Europe dreamed of a new deal that would bring
difficult decisions. What explains the contrasting
in China and the US, which would not be called
reactions? Expectation.
Kyoto but would work along similar lines. China
COP15 was the meeting which the UN climate
154
Yet, as December 2009 rolled around, it
and India, meanwhile, knew that their cooperation
process had named as the nominal deadline for a
was a trump card, and used it to demolish each
new global deal to be sealed. The first phase of
such attempt. Throw in a Danish government that
the Kyoto Protocol, the world’s existing inter
appeared out of its depth as organisers and
Ca n c ú n
Ag r e e m e n t
H a i l e d
as
a
Li f e l i n e
media coverage hyped before the summit and
negotiations, but to bury them. Using a footballing
heavily spun during it, and COP15 was only
analogy, Yvo de Boer, who stood down as Executive
going to be allowed to end in one way. Compared
Secretary of the UN Framework Convention on
to the heavily trailed new global deal to save the
Climate Change (UNFCCC) after COP15, warned
planet, the meagre output of COP15 simply did
on the brink of the Cancún meeting that many
not stack up.
people had given the UN process a yellow card.
Fast forward 12 months and expectations were so low that even some meagre output from COP16 was seen as unlikely. Continued economic
It could not, he said, afford the unfortunate consequences of a second. All of this helps to explain that, when the
woes and renewed media attention to climate
COP16 talks staggered towards the traditional
scepticism had brought a harsher lens to the way
small hours finish, relief and then optimism
the global warming problem was viewed in many
greeted the result, rather than the recriminations
countries. President Obama’s attempts to deliver a
and bitterness seen in the Danish capital. The
US cap and trade scheme to regulate fossil fuel
modest progress made in Cancún was hailed as
use looked dead in the water. The UN climate
“a breakthrough agreement reached amid scenes
process itself was facing calls to be radically
of tearful jubilation” by one veteran environmental
altered. When a sharply reduced number of
journalist. Another said: “If Copenhagen was the
journalists, green campaigners, delegates and
Great Dane that whimpered, Cancún has been
critics travelled to Cancún, it was not to praise the
the Chihuahua that roared.” On the tightrope that
b e lo w
The 16th Conference of the Parties to the UN Framework Convention on Climate Change took place in Cancún from November 29 to December 10, 2010. In the picture Mexican President Felipe Calderón is at centre.
is the world’s fragile journey towards the goal of effective action against global warming, COP16 saw it take another step forwards. After an unpleasant wobble, and compared to a plummet into oblivion, such an advance is always welcome – however distant the destination remains. Writing in the UK newspaper, The Guardian, Michael Jacobs, climate change adviser to former UK Prime Ministers Tony Blair and Gordon Brown, said COP16 was both a remarkable achievement and badly inadequate. He wrote: “The Cancún agreements perform the remarkable feat of simul taneously changing nothing and changing a great deal. Yet, they should be seen as restoring a climate of hope in difficult times.” Cancún, he said, was significant because it would restore confidence among both governments and busi nesses that action on climate change is going to occur. “And in turn that makes it more likely that such action will occur.” Christiana Figueres, who succeeded de Boer as Executive Secretary of the UNFCCC, struck a similar tone. “Cancún has done its job. The beacon of hope has been reignited and faith in
C ancún
Ag r e e m e n t
H ailed
as
a
Li f e l i n e
155
obstruction from a string of countries in Copenhagen meant the UN was unable to adopt them officially, so they were sidelined into an agreement called the Copenhagen Accord. In Cancún, this accord was essentially given a new front cover, stamped with the superficially impor tant badge of the UN process. Bolivia objected to this conversion, but was shouted down. As a result, emission cutting targets that countries proposed for themselves last year can now be formally recognised within the UN process. So too can the language of the accord that spoke of the need for deep cuts in emissions by both developed and developing nations. This is the basis for much of the optimistic coverage of Cancún: one reading of the agreement there is that the countries of the world have signed up to the fact that “climate change is one of the greatest challenges of our time” and they recognise that “deep cuts in global greenhouse Christiana Figueres, who succeeded Yvo de Boer as UNFCCC Executive Secretary, addresses the conference.
gas emissions are required according to science”. Most fundamentally, the Cancún agreement formalises their shared responsibility
the multilateral climate change process to deliver
to take “urgent action” to meet the long-standing
results has been restored,” she said. “Nations
goal of Europe to limit global warming to 2ºC
have shown they can work together under a
above pre-industrial levels.
common roof, to reach consensus on a common
COP16 also saw mechanisms established to
cause. They have shown that consensus in a
drive funding from rich countries to poor, and to
transparent and inclusive process can create
build capacity in the developing world for them
opportunity for all.”
to spend this money on protecting themselves
Even strident green campaigners Friends of the
from the changes in weather that global
Earth saw some light from Cancún at the end of
warming is expected to bring. And it fleshes out
the tunnel. Andy Atkins, Executive Director, said:
the details of a framework that could reward
“The world needed strong and determined action
tropical nations who act to reduce emissions
to tackle climate change in Cancún. The outcome
from deforestation, as well making clean
is a weak and ineffective agreement, but at least it
technology common in the developed world
gives us a small and fragile lifeline.”
more widely available.
l The detail of Cancún
of arguments, conspiracies, obstruction, threats,
So what was agreed at COP16? How strong is
broken promises, hype and fear that have
the lifeline it provides? At its heart, the Cancún
characterised the global negotiations on global
agreement formalises a series of pledges that were
warming, to get difficult global consensus
originally drafted in Copenhagen. Late night
(Bolivia aside) on such statements is indeed an
Against a backdrop of more than a decade
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So why not review them now? The answer is that in the name of consensus, nations have settled for what they can get, not what they know they need. This is standard in politics of course, and many seasoned observers of the UN process expected that this would be the likely outcome. But there is more than an emissions gap drawn in the Cancún sand, there is a reality gap too. Take the promised reductions in emissions. That they do not add up to the amount dictated by the 2ºC target marks a sharp diversion from the claim that global action on global warming is geared up according to science. That would demand a topdown allocation of targets driven by a central, and commonly agreed, goal. That was the mechanism Bolivian President Evo Morales; Bolivia strongly objected to the re-badging of the Copenhagen Accord at Cancún.
that the Kyoto agreement tried to introduce. Critics of Kyoto are correct that the agreement was an expensive way to make barely a dent in global
impressive achievement. The world has finally
emissions, but then it was never really expected to.
agreed that it wants to take collective action to
It was supposed to show how it could be done and
reduce emissions. But will it? And if it does, will it
set up a suitable architecture. Subsequent phases
be enough?
were supposed to increase the shared load, and
The mixed pledges to reduce emissions made
so pass on harsher cuts to nations.
by nations in Copenhagen were declared by scientists as insufficient to meet the 2ºC target then, and they remain insufficient now. Few people dispute this. According to widely quoted figures calculated by the UN Environment Programme, to reach the 2ºC target, global greenhouse gas emissions in 2020 would need to be no more than around 44 gigatonnes each year. Even if all coun tries manage to cut pollution by as much as they promise, annual greenhouse gas emissions by 2020 will be closer to 49 gigatonnes. Hence, scientists and campaigners talk of an “emissions gap” of at least five gigatonnes. The Cancún agreement acknowledges this apparent inconsist ency, and includes scope for its targets to be assessed again in 2013, based on the latest scientific evidence. This is where the mask of optimism starts to slip to reveal the political reality of what COP16 truly achieved. The targets are known to be inadequate.
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Jens Stoltenberg, Prime Minister of Norway (left ), meets UN Secretary General Ban Ki-moon during COP16.
Such a top-down system (unlike the bottom-up
Take the future of the Kyoto Protocol for
series of self-reported targets now in place) has
instance. Talk of a second commitment period
been a central demand of many involved in the
nearly sunk the Cancún talks, with Russia and
UN process, especially within Europe. So too, was
Japan particularly vocal in opposition. Kyoto
the principle that the targets would be legally
remains the darling of the developing nations, who
binding, with penalties imposed for failing to meet
see it as their only route to compel rich countries
them. In the mid-part of the last decade, when
to take on challenging targets (while largely
President George W. Bush indicated that voluntary
excusing themselves). That particular disagreement
and non-binding goals were the limit of his
has been rolled over to be resolved at COP17 in
ambition for the US, he was widely scorned by
December this year in Durban, when it will be truly
green campaigners, scientists and rival politicians.
do or die for something new to be in place by next
Now the Obama administration, among others,
year, and the new-found international consensus
seems to have succeeded in presenting such a
could find itself torn apart again.
relatively toothless approach as a best-case
As Jacobs put it: “The Copenhagen-Cancún
compromise.
climate regime does not look like the model
Countries including the UK will still push for the
architecture to which environmentalists have for so
targets to be made legally binding, but it is difficult
long adhered. In place of a legally binding treaty,
to see why those who object to such an arrange
there will merely be the soft law of UN decisions.
ment now will change their minds. Recent history
Instead of a top-down global target set by
of the UN climate talks shows that potential points
scientific analysis, distributed between countries
of disagreement that could derail the process have
according to some formula of equity, countries will
a habit of being kicked into the long grass of
make their own bottom-up commitments.”
future meetings.
All is not lost, Jacobs insists, as the renewed confidence offered by the Cancún consensus should boost investment into low-carbon techno logy and other measures. That still seems a big ask: for years, the political mantra of the govern ment that Jacobs advised was that a top-down approach and binding targets were needed to put a price on carbon, without which the money would not flow. Confidence alone, as we have seen with the world economy, is a transient and flimsy base on which to make predictions. The steady creep of global warming seems irresistible. Political difficulties to serious global action seem immovable. The acclaimed break through in Cancún postponed the collision bet ween the two, but for how long? David Adam is an editor with the international
Side events at COP16 included the “Stop talking, start planting” initiative (schoolchild Felix Finkbeiner is pictured with Ecuador’s President Correa) and the IGU-Worldwatch Gas Event (see next article).
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weekly journal Nature (www.nature.com). From 2005 to 2009 he was environment correspondent for The Guardian.
generation had contributed to a reduction in US
IGU Joins Forces with Worldwatch for COP16 Gas Symposium
CO2 emissions and asked, “What is the potential for gas to contribute to decarbonisation in areas such as China and India?” The presentations were divided into sessions looking respectively at global and industry
By Mark Blacklock
perspectives, with the first moderated by Christopher Flavin and the second by IGU’s
Following the success of IGU’s gas event during
President, Datuk Abdul Rahim Hashim.
COP15 in 2009, the Union joined forces with the Worldwatch Institute to organise a gas symposium
l Global perspectives
during COP16, and “The Role of Natural Gas in a
The first speaker was Dr Kandeh Yumkella,
Low-Carbon Economy” was held on December 5,
Director General of UNIDO and a new member
2010. It was attended by around 75 people
of IGU’s Wise Persons Group. His theme was
including members of COP16 delegations, NGOs
widening access to electricity in a clean way. He
and other invited guests, and was sponsored by
pointed out that 1.5 billion people in the world
E.ON Ruhrgas and Statoil.
lack electricity and that exposure to smoke as a consequence of using fuelwood for cooking and
Welcoming participants IGU Secretary General Torstein Indrebø said, “The purpose of this event is
heating kills between 1.5 and 2 million people
to outline in more detail how the gas industry can
each year. “Natural gas is one of the possibilities
contribute to meeting emissions targets”, while
and it’s abundant,” he said. Picking up on Dr Yumkella’s theme, Nobuo
Worldwatch’s President Christopher Flavin pointed
Tanaka, Executive Director of the International
out that a shift from coal- to gas-fired power
IGU joined forces with Worldwatch for the gas symposium during COP16.
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Energy Agency (IEA), declared, “$36 billion a year is enough to alleviate energy poverty by 2030”. He contrasted this amount with large government subsidies for fossil fuels – some $312 billion in 2010 he estimated – and said that prices reflecting market principles are essential. Drawing on IEA’s latest World Energy Outlook, he pointed out that China is now the world’s largest energy consumer so its actions on the emissions front are crucial, and warned that the cost of delay in the investments needed to stabilise greenhouse gas emissions at 450 parts per million of CO2-equivalent (in line with an increase in global temperature of around 2°C) is rising. Noting developments on the unconven tional gas (UCG) front, he forecast that UCG would account for 35% of global gas supply by 2035 and that carbon capture and storage
IGU President Datuk Rahim talks to Nobuo Tanaka, IEA’s Executive Director (centre ), and UNIDO’s Director General Dr Kandeh Yumkella (right ) during a break in proceedings.
(CCS) with gas would play an important role in the future energy mix. “We may have a golden
David Goldwyn, Special Envoy and Coordinator for International Energy Affairs in the US Depart
age for gas,” he ended. Timothy Wirth, President of the UN Foundation,
ment of State, focused on UCG and the benefits of
described the advances in UCG technology as a
exporting the US experience to the rest of the
“gift” and asked, “Why aren’t we doing a better
world. He pointed out that in the US shale gas
job to take advantage of this gift?” He outlined the opportunities for gas in terms of improving energy access, in power generation and as a transpor tation fuel, and lamented the fact that, “much of the policy dialogue has put gas into a confron tational role with renewable energies”. Jos Delbeke, Director General for Climate Action in the European Commission (EC), stressed that putting a price on carbon – as the European Union has done for large-scale emitters – is essential in the battle against climate change. “By 2050 the carbon emissions of the power and manufacturing sectors will be 70% less than in 1990,” he said, adding that “a raft of measures” was being put in place to tackle small-scale emitters. He also said that the EC was “determined to get cracking on CCS” with a new legal frame work and €4-5 billion of funding for demon
Jos Delbeke of the EC: putting a price on carbon is essential in the battle against climate change.
stration plants.
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production has increased 14-fold in 10 years
lumped together with other fossil fuels, he said;
and that gas reserves increased 11% in 2009
rather it is part of a long-term solution to com
alone, despite lower gas prices. “UCG can be an
bating climate change and one which can bring
energy and climate change game changer as it
rapid improvements on the emissions front without
has been in the US,” he said, “and can give
the need for subsidies.
greater energy security.”
Statoil’s Senior Vice President for Climate, Hege
Professor Jiang Kejun, Director of the Energy
Marie Norheim, agreed. “We in Statoil believe gas
Research Institute of China’s National Reform and
will play an increasingly important role in the
Development Commission, explained that a key
energy mix,” she said. “Nuclear is often touted as
Chinese priority is to reduce the pollution caused
a back-up to renewable energy but a reality check
by reliance on coal through a combination of CCS
is needed. Nuclear plants take twice as long to
and greater use of gas. “Natural gas is crucial for
build as gas plants … gas is the optimal fuel to
China,” he declared, forecasting a minimum
partner renewables.” However, she stressed that
demand of 200 bcm by 2020 compared to con
for gas to fulfil its role in the energy mix, “political
sumption of 89 bcm in 2009. Imports are set to
will is needed [and] it is up to us, industry leaders,
increase with 10 new LNG receiving terminals in
to promote gas”.
the pipeline and the domestic industry will be
Total’s Gérard Moutet, Vice President Climate –
developed. “We hope gas can do a good job for
Energy in the Sustainable Development &
the rural energy supply,” he said.
Environment Division, focused on CCS, declaring,
David Sandalow, Assistant Secretary for Policy
“CCS can be efficiently applied to gas-fired power
and International Affairs in the US Department of
generation”. He explained that while the cost per
Energy (DOE), agreed with the EU’s Jos Delbeke
tonne of CO2 captured is higher for gas, the cost
about the importance of carbon pricing saying,
of avoided CO2 per megawatt hour is lower.
“the [Obama] administration is fighting for a
Moreover, there is less CO2 to be transported
carbon price”, and stressed the importance of
and stored. Shell UK’s Tanya Morrison, International
government support for UCG research. He pointed out that DOE funding had helped kick-
Government Relations Manager for Climate
start the UCG revolution in the US and that the
Change, reinforced the message. “Gas plus CCS
latest grants are targeted at methane hydrates.
is lower cost and delivers better CO2 savings than
“We are committed to the safe and responsible
any other competing energy source,” she asserted.
development of natural gas resources,” he said.
“We need to focus on doing the doable today.” Dr Gerald Linke, Head of the Gas Technology
A discussion of the topics addressed rounded off the first session. Among contributions from
Centre at E.ON Ruhrgas, looked at the increasing
the floor, Lisa Beal of the Interstate Natural Gas
potential for biomethane, end-use appliances and
Association of America called for more invest-
energy storage. In the residential end-use sector
ment in gas compared to the big investments in
he reviewed the latest developments in gas-fired
clean coal.
heat pumps, the scope to combine condensing boilers with solar panels and micro-CHP. ”The
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l Industry perspectives
goal [in micro-CHP] is to keep the overall effici
IGU’s CC Chairman, Ho Sook Wah, started the
ency at 90% but to increase electricity efficiency
presentations in the second session with a call to
from 20% towards 50%,” he said. As regards
policymakers “to give natural gas the role it
storage he outlined how the gas infrastructure
deserves in the energy future”. Gas should not be
could be used to store energy from volatile
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Director of NGV Global, outlined the benefits of natural gas vehicles (NGVs), saying that he current road transport fleet was 11.2 million (mostly running on CNG) and that marine applications (in the form of LNG) were developing. “Bunker fuel is history,” he declared. Kenneth Vareide, US Regional Manager for Det Norske Veritas, focused on the use of LNG as a maritime fuel, which he explained was being driven by new regulations on shipping emissions and a drive for greater efficiency. Ship owners can install scrubbers, use low sulphur fuel or switch to LNG to meet the new regulations. “LNG is the cheaper option over 20 years but there are higher upfront investment costs,” he said. In the ensuing discussion differing regional issues were highlighted. Michael Eckhart said that price volatility in the US is a problem which the industry is not addressing, while Hege Marie Norheim pointed out that in Europe long-term supply contracts made this less of an issue.
Gerald Linke of E.ON Ruhrgas: gas infrastructure could be used to store energy from volatile renewable sources.
l Conclusions
renewable sources. At times of high wind, for
Gas can provide clean base load support for
example, excess electricity could be used to
intermittent renewables and is part of the long-
produce hydrogen through electrolysis, with the
term energy solution to mitigating climate
hydrogen then being injected into the gas grid
change, but this message needs to be reinforced
subject to local standards.
to policymakers and the general public, and IGU
Michael Eckhart, President of the American
is working on this with its advocacy programme.
Council on Renewable Energy (ACORE), also
In their joint statement the presidents of IGU and
addressed the complementarity of gas and
Worldwatch said that, “both organisations intend
renewables. “ACORE and the Natural Gas Supply
to continue to address the climate challenges
Association have announced a joint initiative to
facing the world, and at the same time also to
bid gas and renewable energy projects as an
present the essential facts about natural gas to
entity,” he said, stressing that future solutions must
the public”.
be clean, economic and tailored to regional
Datuk Rahim and Torstein Indrebø rounded
circumstances. He also stressed that policy and
up the symposium by thanking the speakers.
financial initiatives have to be backed up by
The Secretariat is planning a similar gas sym
advocacy and education. “We have to persuade
posium during COP17 in Durban later this year.
one more person every day,” he said. Mark Blacklock is the Editor-in-Chief of
The last two speakers looked at gas as a
International Systems & Communications Ltd.
transportation fuel. Brett Jarman, Executive
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Kevin Yule Manager, Developing Assets E.ON Ruhrgas
 We are active along the entire gas value chain  E.ON Ruhrgas is a leading European gas company and responsible for the pan-European gas business in the E.ON Group operating worldwide. We have a growing E&P and LNG business. We operate Europe’s largest gas supply business, supplying gas to resellers, large industrial customers, and gas-fired power stations in and outside Germany. Our geographically diverse portfolio of long-term supply contracts with key producing countries makes us a pillar of gas supply security in Europe. We are also engaged in gas storage in Germany, Austria, Hungary, the U.K. and in gas transmission in Germany. Read more at: www.eon-ruhrgas.com
The Gas Industry in Mexico, IGU’s Latest Charter Member
sector participation and investment in both the operation and ownership of gas pipelines, distribution and transportation systems – all of which would create competition.
By Germain Manchon
In essence the reform divided natural gas activities in two:
In 1995, the Mexican federal government b e lo w
Table 1. bottom
Table 2.
l Strategic activities, reserved to the State
enacted a series of legal and institutional
through the national oil company Petróleos
reforms to create a new organisational structure
Mexicanos (PEMEX), which include natural
in the natural gas industry. The goal behind the
gas exploration, processing and first hand
amendments was to create and stimulate private
sales; and l Non-strategic activities open to private
participation, which include storage, pipeline
O b j e c t iv e s o f t h e 1 9 9 5 N at u r a l G a s Structural Reform
transportation, distribution and marketing. The reform also created the CRE, Mexico’s Energy Regulatory Commission, empowering it
l Ensure a sufficient, reliable, timely and competitive supply
of natural gas to satisfy the needs of the productive sector, stimulate economic growth and competitiveness.
to guide and design the regulatory framework for the industry and setting specific
l Promote the use of clean fuels and the enactment of
methodologies for natural gas pricing (first hand
environmental regulations.
sales) to replicate the conditions of competitive
l Open new spaces for productive investments and generate
new sources of permanent employment. l Promote healthy competition in the industry in favour of
markets. l Results
final users.
The natural gas reforms have triggered invest
l Promote an adequate supply and availability of gas
ments in the sector. Since 1995 the private
throughout the country.
sector has invested approximately $5 billion in
l Help promote new power generation projects.
the construction of natural gas infrastructure in
Source: CRE, Informe quinquenal 1995-2000, p16.
Mexico. According to the CRE (see Table 2), since 1995 it has awarded 213 permits representing investment commitments of
N at u r a l G a s P e r mi t s Aw a r d e d b y t h e E n e r g y R e g u l at o r y C o mmi s s i o n Modality Number of Permits Natural Gas Transportation
$8.3 billion. The Asociación Mexicana de Gas Natural
Committed Investments (US$ million)
(Mexican Natural Gas Association – AMGN) was founded in 1988 and represents the interests of the main natural gas players in Mexico, including private companies in charge of
186
$3,281
23
$1,873
LNG
3
$3,037
Underground Storage
1
$200
clients in Mexico and control most of the private
213
$8,391
gas infrastructure in the country, including open
Natural Gas Distribution
Total (as of November 2010)
distribution, transportation and storage activities. The Association groups the companies that provide natural gas to over 2 million residential
access private transportation pipelines. It
Source: AMGN based on information from the CRE.
became a Charter Member of IGU in 2010.
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Me m ber
l Future of natural gas
capacity required by the CFE by 2024 will be gas-
Mexico’s natural gas production averaged
fired projects. As can be concluded, the Mexican natural
197 mcm (7.03 bcf) per day in 2010. Based on official estimates, natural gas demand will
gas market faces real challenges in the future
show an annual 2.4% growth rate over the next
decade, including guaranteeing the supply
15 years.
and production for a growing demand that is mostly driven by state-owned energy utilities,
In order to supply the domestic natural gas demand of the country, natural gas imports have
PEMEX and CFE. Additional transportation
grown and will continue growing. In 2010, over
infrastructure and redundancy in the system
17% of national demand was covered through
is urgently needed. Considering the investment requirements of the
natural gas imports, both from pipelines and from LNG. A new LNG facility in Manzanillo on the
energy sector as a whole, private participation will
Pacific Coast is being constructed to ensure future
be an important component to meet these needs,
availability of gas for Mexico’s Federal Electricity
and the Mexican Natural Gas Association will be
Commission (CFE).
present and supporting the future changes that the industry demands.
Currently, natural gas represents over 45% of CFE’s installed capacity. Over 55% of total power generation in Mexico comes from gas-fired
Germain Manchon is Head of GDF SUEZ’s
plants, and this trend is not expected to change
operations in Mexico and Honorary President of
going forward. Approximately 40% of the new
the Asociación Mexicana de Gas Natural.
Over 55% of Mexico’s electricity is generated by gas-fired plants such as this one in Valladolid.
Th e
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I n d u s t ry
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Latest
C harter
Me mber
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The New Potential of Gas By Walter Thielen and Marc Hall
elements in these efforts are the cost-intensive expansion of network infrastructure (the German Energy Agency estimates that some 3,600 kilo metres of additional power lines will be needed) and research and development in the area of
The major challenges we face in the 21st century
innovative power storage technologies. Systems
are to ensure reliable, economic and environ
that have been tested to date, including pumped-
mentally compatible energy supplies and to meet
storage power stations, underground compressed
ambitious climate protection targets. At COP16 in
air storage, the use of electric vehicles as mobile
Cancún at the end of 2010, some small steps
storage devices and the development of huge
were taken in this direction.
lithium ceramic batteries, will only be sufficient to
Renewable energy sources will play an increas
provide part of the storage capacity that will be
ingly important role in the energy mix of the
necessary. None of these technologies is suitable
future. However, the energy sources with the highest
for bridging regional electricity shortfalls over a
potential, wind and solar, cannot be stored, are
period of days or even weeks.
subject to severe fluctuation and cannot be
A striking feature of the current debate on
exploited in line with demand. The amount of
energy supply systems of the future is that sol
power fed into the grid depends on weather con
utions are being discussed mainly in the electricity
ditions and the time of the day. While wind farms
industry, while the potential for solutions on the
generate abundant power in high wind conditions,
gas side is ignored.
customers need electricity from other sources
As a result of its outstanding properties and the
during calm periods. Increasingly, wind and solar
highly developed pipeline systems in place in
power are assigned negative prices, which must
many countries, gas could play a key role in a
be avoided from the economic point of view.
holistic energy system of the future. IGU Charter
The highly volatile and unpredictable nature of
Member DVGW – the German Technical and
renewable power generation means that power
Scientific Association for Gas and Water – is
generation is increasingly becoming uncoupled
currently investigating the potential future contri
from consumption. Energy supplies are changing
bution of gas as part of its innovation offensive.
rapidly from a consumption-driven to a gener ation-driven structure, resulting in a transformation
l DVGW innovation offensive
of power supply systems.
The objective of the DVGW innovation offensive is
If power generation from renewable sources is
as a fuel with respect to climate protection, energy
storage technologies and capacities will be cru
efficiency and innovation. The potential of natural
cially important. Cost-effective processes with
gas in future energy systems and for heat supply is
minimal energy losses are needed to store surplus
to be highlighted. The key elements are:
electricity from renewable sources as it is gener
l Support for the introduction of innovative gas
ated and to release it again as and when it is needed. Large hourly, daily and to some extent
applications (“gas-plus” technologies); l Reinforcing the role of renewable gaseous
even seasonal storage capacities will be required,
energy sources in existing gas infrastructure (the
as well as efficient conversion technologies.
greening of gas); and
In the electricity industry, a number of different approaches are currently being pursued. Key
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to develop the technological basis for natural gas
to be expanded as planned, the development of
T h e
N e w
Pot e n ti a l
o f
G a s
l Developing optimisation technologies and pro
cedures for distribution networks (smart grids).
One of the main focuses of the work is on the
industrial scale. Under the DVGW codes of
assessment of gas infrastructure and utilisation
practice, it is already admissible to add up to 5%
technology in connection with the integration of
hydrogen to natural gas. With reference to the
renewable energy sources into energy systems.
German gas system, this would mean that up to
The energy system of the future will feature two
5 bcm of hydrogen from renewable sources could
key aspects – an increasingly volatile power net
be injected into the system each year. Current
work and a gas network that is flexible thanks to
estimates indicate that the German gas system has
its storage capacity. One of the challenges faced
the potential for absorbing excess energy from
by the gas industry is to combine these two sys
renewable power generation up to 2050. As
tems in an intelligent way.
manufactured gases, which are already used
This approach is based on two main ideas.
successfully in many parts of the world, contain up
While the figures stated apply to Germany, the
to 50% hydrogen, the injection of hydrogen would
principle is also transferable to other countries.
not take the gas industry into uncharted waters.
l Power-to-gas
that low-efficiency part-load operation of condens
A highly promising possibility of storing power from
ing power stations could be reduced. With the supply
renewable sources more effectively at competitive
of power from renewable sources, these power
cost is the conversion of wind or solar power into
stations could continue to operate at optimum effi
hydrogen. The process has an efficiency of about
ciency, generating the electricity needed for electro
80% and the only by-product is harmless oxygen.
lysis and hydrogen production. However, calculations
The hydrogen produced can be fed into gas
for this application have not yet been finalised.
An additional benefit of this approach would be
systems and used for all the applications where
In the second step, synthetic natural gas could
natural gas is used today, e.g. for heating homes or
be produced from the hydrogen. This option has
power generation. Electric power can be converted
the advantage of allowing mixture with natural gas
into hydrogen by electrolysis, a technology which
in practically any proportion but would have
is well-established and has been tested on an
additional drawbacks in terms of efficiency losses.
OUTLOO K – ENER G Y STORA G E US I N G HYDRO G EN The renewable energy sources with the highest potential, wind and solar, cannot be stored. Power-togas offers a solution. Government action required: l Technology, economics and sizing of electrolysis plants and injection systems; l Identification and description of solutions on the basis of pilot regions and application models with specific load curves (generation and demand); and l Creation of legal framework.
Additional action required from DVGW: l Identification of specific hydrogen potential or quantities of power to be converted from renewable sources; l Confirmation of limits for the addition of hydrogen to natural gas; l Network injection technologies; l Ensuring customer invoicing in accordance with regulations (to G 685) and, if applicable, development of compatible calorific value tracing systems; and l Comparison of efficiency (energy and CO2) of this energy chain with other systems and infrastructure work on the power side.
The
Ne w
Potent i al
of
Gas
173
The attraction of power-to-gas technology is that
offers even greater potential. The concept of
it allows the use of the existing gas network infra
“power-to-gas” may be new but the technology
structure, making gas infrastructure into the enabler
required and a highly developed, high-
of renewable energy sources or transforming the
performance natural gas network have already
gas network into an electricity storage facility.
been available for a considerable time. The concept outlined could also make a highly cost-
l Gas-to-power
effective contribution to the integration of renew
Power could then be generated from gas using high-
able energies as the use of existing gas infra
efficiency energy conversion technology, ideally in
structure would reduce and postpone the need for
cogeneration plants or highly efficient gas-fired
expansions to electric power systems and also
power stations. These technologies also offer the
considerably reduce energy storage problems.
benefit of rapid adaptation to demand changes.
Methane and natural gas may come from
Compact cogeneration plants in the megawatt
fossil or non-fossil sources, already help protect
range, equipped with gas turbines, already reach
the environment and can be used in future with
electrical efficiencies in excess of 45%. In combi
no impact on the climate, becoming the energy
nation with well-thought-out waste heat utilisation
partner of renewables and part of the solution
systems, overall efficiencies of the order of 90%
for the environmental transformation of our
can be reached. Fuel cells can also achieve very
energy supplies.
high electrical efficiencies; promising systems with
In our opinion, it is now important for the gas
efficiency levels of the order of 60% are already
industry to recognise the opportunity offered by
being tested, even for low-output plants. The
gas / power convergence and to make a strong
holistic consideration of the combined generation
contribution to the research work required (e.g.
of heat and power and an open-minded assess
more detailed investigation of the specific potential
ment of the technologies available will ensure that
of hydrogen, limits of hydrogen addition to natural
the highest possible energy efficiency is combined
gas, the development of optimised injection
with the lowest possible specific CO2 emissions.
systems, ensuring invoicing in accordance with the
For efficiency reasons, intelligent waste heat
regulations, efficiency comparisons with other sys
utilisation also plays a key role. The possibilities considered must not only include heat generation
tems and power infrastructure measures required). Apart from promoting gas-plus technologies on
for space heating, but the optimisation of all
the utilisation side, the gas industry must under
thermal potentials, even for air conditioning.
stand the value of its own assets in the current energy and climate policy environment. Once
l Conclusion
industry has recognised this, gas/power conver
With natural gas, biomethane and the existing gas
gence offers further potential for natural gas to
infrastructure, realistic, affordable approaches are
make a contribution to reliable, efficient, environ
already available for mastering many of the
mentally compatible energy supplies, making the
challenges arising in connection with the environ
gas industry, as energy system service provider, an
mental transformation of energy supplies.
“asset winner”.
Renewable energy sources are already
174
integrated into existing systems by injecting bio
Dr Walter Thielen is the Managing Director of
methane into the natural gas system. The produc
DVGW and a member of IGU’s Executive
tion of hydrogen using excess wind or solar power,
Committee. Marc Hall is the Managing Director of
followed by injection into the natural gas system,
Bayerngas and Chairman of PGC E – Marketing.
T h e
N e w
Pot e n ti a l
o f
G a s
The independent global LNG terminal operator
Vopak
– – – – – –
Vopak has terminals in the world’s most strategic ports. The terminals are strategically located for users and the major shipping routes.
the independent global LNG terminal operator offers non-discriminatory terminal access to all interested gas suppliers and off-takers is open for strong partnerships displays long-term commitment develops terminals based on a repeatable formula is committed to sustainability
www.VopakLNG.com
Renewable Gas: Clean Fuels By Elbert Huijzer
language to technicians; some definitions are general, others are detailed. The question that PGC A asked itself was how to speak a common language in IGU, without getting into detailed definition debates. We have come up with the
Although natural gas is the cleanest of the fossil
scheme shown in Figure 1.
fuels, increasing use of renewable gas is necessary to reduce the industry’s overall emissions.
l Processing
Introducing renewable gas into the supply stream
When processing biomass, there are two main
represents the biggest change for the industry
routes to follow. One is anaerobic digestion,
since the switch from manufactured to natural gas;
normally used for wet biomass, and one is
and three of IGU’s Technical Committees are
gasification, normally used for dry biomass. The
working on this important issue.
result of digestion is called biogas; the result of gasification is called bio synthetic gas. Once it is
In May 2010, WOC 5 and PGCs A and E decided to work together on a shared approach to
processed to a composition that is comparable to
renewable gas. A joint report is being prepared
natural gas, it is called biomethane. The overall
for WGC2012 and coordination in the content of
name for all these gases from biomass of
sessions and panels is being discussed.
renewable origin is renewable gas. In order to transport the product of digestion
The first job is to explain what we mean by
b e lo w
renewable gas – often termed biogas or
(or gasification) some basic processing steps need
biomethane – when many definitions are used
to be carried out, like dehydration and desulphuri
around the world for gases that originate from
sation. To distinguish between the gases before
renewable sources. In some cases these definitions
and after these steps, it might be useful to describe
are not even consistent within countries. Producers,
the non-processed gas as “raw”. In the scheme shown in Figure 1, biomethane
consumers and politicians may speak a different
Figure 1.
is a definition which is used for gas from both
RENE W ABLE G ASES
the digestion and the gasification route. The
Renewable Biomass
logic is that it does not
Bio Synthetic Gas
Gasification
Cleaning
differ in its composition, since by definition it
Upgrading
should be comparable to the natural gas
Direct use
Dedicated grid
Biomethane
composition of the grid to which it is connected.
Anaerobic digestion
One could also use the
Upgrading
Cleaning
terms bio natural gas
Biogas
or bio synthetic natural
Natural gas grid
gas. However, the use of these different wordings is not to be promoted.
176
R e n e wa b l e
G a s :
C l e a n
F u els
As natural gas is distributed in a variety of qualities, biomethane can also be produced in a variety of qualities. For instance, in Europe one
making them partly self-sufficient, thereby keeping money in the region. Local conditions for growing biomass differ.
can imagine a difference between low- and high-
Therefore, the production techniques for renew
calorific biomethane.
able gas, its distribution and its use may differ.
Hydrogen, which can be produced from various
The necessary food-feed-fuel discussion may lead
sources using various techniques, can be a
to different conclusions because of local con
renewable gas as well. When it is derived from a
ditions. However, in all these situations, there will
renewable source, such as using excess wind or
be a need for energy connections to the rest of the
hydro power for electrolysis or from renewable
world, whether it is for balancing, for selling a
biomass, it can be called wind, water or bio
surplus of energy or for back-up on a cold day.
hydrogen to stress the renewable origin. Hydrogen
This is where the gas industry is the natural
made by natural gas reforming, however, is not a
partner to these communities.
renewable gas, no matter how useful this might be in reducing CO2 emissions.
The gas industry is in a unique position to connect local initiatives to the global natural gas grids formed by pipelines and LNG carriers. We
l Strengthening communities
can help the world become more sustainable while
By introducing renewable gas, the gas industry will
providing the energy needed for development. Let
be able to help local communities. Producing and
us use this opportunity. In the near future, this will
processing biomass is typically a local or regional
be our licence to operate.
activity because transporting vast quantities of biomass is not the smartest way of transporting
Elbert Huijzer of Alliander division Liandon is the
energy. It strengthens local communities by
Leader of Study Group 2, Programme Committee A
creating jobs, increasing technical knowledge and
– Sustainability.
Increasing use of renewable gas will reduce the industry’s overall emissions.
Rene wable
Gas :
Clean
F uels
177
European Security of Gas Supply and the Role of the Trans Adriatic Pipeline in the Southern Gas Corridor About the Trans Adriatic Pipeline (TAP)
The Trans Adriatic Pipeline (TAP) AG is aimed at enhancing security of supply as well as diversification of gas supplies for the European markets. TAP will open a new so-called Southern Gas Corridor to Europe and market outlet for natural gas from the Caspian Sea. TAP’s shareholders are Swiss EGL (42.5%), Norwegian Statoil (42.5%) and German E.ON Ruhrgas (15%). The project is designed to expand transportation capacity from 10 to 20 bcm per year depending on throughput. The TAP project also envisages physical reverse flow of up to 8 bcm and the development of natural gas storage facilities in Albania to further ensure security of supply during operational interruptions of gas deliveries.
An important year ahead
Last year saw encouraging progress for TAP as we reached several significant milestones, from several agreements on key stages of our pipeline route to welcoming a new shareholder – E.ON Ruhrgas.
nically viable, safe and offering the most commercially attractive transportation route for shippers, TAP has the enormous advantage of being the shortest new-build pipeline and the most cost-effective route for delivering Shah Deniz II gas into Europe. Our project enjoys the support of the European Union and is regarded as integral to the EU’s energy policy. TAP has several features that enhance Europe’s energy security. These include the possibility to physically reverse gas flow in the event of an emergency, develop storage opportunities in Albania, and a commitment to include several tie-in points along the pipeline for other spur lines into South Eastern Europe. Furthermore, TAP is a large pipeline with a capacity of 20 bcm. It is designed to effectively transport the 10 bcm of Shah Deniz II gas from Azerbaijan during the first phase, whilst accommodating additional supplies as they come on stream. However, Europe’s energy security does not simply require political will and consensus. In these challenging economic times, when decisions are subject to unprecedented public scrutiny, it is even more essential to chose the most efficient and
Kjetil Tungland, TAP Managing Director:
2011 will be the decisive year for the Southern Gas Corridor 2011 looks like being an even more momentous year, with critically important decisions due to be made that will not only determine the future of TAP and other pipeline projects in the Southern Gas Corridor, but will also have a profound and lasting impact on Europe’s energy security. This year we expect to hear which companies have been successful in procuring gas from the Shah Deniz II consortium. This will then directly lead to a decision on which transportation solution becomes the cornerstone in the Southern Gas Corridor for bringing Caspian gas to European markets.
Well placed for success
TAP is in a strong position at this critically important stage and we remain optimistic of the outcome. In addition to being tech-
cost-effective solutions that do not require massive subsidies from the public sector in order to be physically realised or made commercially viable. To do otherwise risks failure and renewed uncertainty over Europe’s energy future. TAP brings confidence as it is supported by financially robust and technically strong shareholders without any need for public funds. It is absolutely essential that the official support and decisionmaking process is transparent and takes place on a level playing field, without fear or favour, based on clear criteria understood by everyone. For there is so much more at stake than just the fate of any one particular pipeline. Political decisions regarding the Southern Gas Corridor, and indeed all similar projects and initiatives, must be based on sound commercial and technical principles.
Opening the Southern Gas Corridor
Enhancing Europe’s Energy Supply The Trans Adriatic Pipeline (TAP) supports the European Union’s strategic goal of securing future gas supply. TAP offers a practical and realistic solution to the transportation of gas to Southern and Central Europe by opening up the Southern Gas Corridor. The 520 km long pipeline will start in Greece near Thessaloniki, cross Albania and the Adriatic Sea and come ashore in Italy near Brindisi, allowing gas to flow directly from the Caspian region to European markets. TAP connects to existing gas networks and is as a result, the shortest route in the Southern Gas Corridor.
The advantages of TAP for Europe include: • • • •
Realistic and commercially viable Expandable gas transportation capacity (from 10 to 20 bcm per annum) Physical reverse flow of up to 8 bcm Underground gas storage facility in Albania
For more information, please visit our website:
www.trans-adriatic-pipeline.com Trans Adriatic Pipeline (TAP) AG Lindenstrasse 2, 6340 Baar, Switzerland, tel.+41 41 747 3400, fax: +41 41 747 3401 Enquiries@tap-ag.com
Trends in Wholesale Gas Price Formation Mechanisms: Results of the 2009 IGU Survey By Mike Fulwood
sub-group to consider gas pricing, with a key remit to carry out a comprehensive analysis of gas price formation models. The sub-group decided to carry out a survey of current pricing mechanisms around the world, not only for gas traded inter nationally, but also for gas produced and con sumed within countries. IGU members were sur veyed and provided data for almost 100 countries, and the survey responses were collated and
The third IGU survey of wholesale gas price formation mechanisms for the year 2009 was
b e lo w
Table 1.
analysed by Nexant. The focus of the gas pricing sub-group, and the
completed in late 2010, following on from similar
surveys, was very much on wholesale prices, which
surveys for 2005 and 2007. The idea for the
can cover a wide range. In fully liberalised traded
survey arose at the beginning of the 2006-9
markets, such as the USA and the UK, the
Triennium. The Strategy, Economics and Regulation
wholesale price would typically be a hub price
Programme Committee (PGC B) had set up a new
(e.g. Henry Hub or the NBP). In many other
TYPES OF PR I CE FOR M AT I ON M ECHAN I S M S Oil price escalation (OPE)
The price is linked, usually through a base price and an escalation clause, to competing fuels, typically crude oil, gas oil and / or fuel oil. In some cases coal prices can be used.
Gas-on-gas competition (GOG)
The price is determined by the interplay of supply and demand – gas-on-gas competition – and is traded over a variety of different periods (daily, monthly, annually or longer). Trading takes place at physical hubs (e.g. Henry Hub) or notional hubs (e.g. NBP in the UK). If there are longer-term con- tracts these will use gas price indices to determine the price. Spot LNG is also included in this category.
Bilateral monopoly (BIM)
The price is determined by bilateral discussions and agreements between a large seller and a large buyer, with the price being fixed for a period of time – typically this would be one year. There may be a written contract in place but often the arrangement is at the government or state-owned company level.
Netback from final product (NET)
The price received by the gas supplier is a function of the price received by the buyer for the final product the buyer produces. This may occur where the gas is used as a feedstock in chemical plants, such as ammonia or methanol, and is the major variable cost in producing the product.
Regulation: The price is determined, or approved, by a regulatory authority, or possibly a Ministry, but the level cost of service (RCS) is set to cover the “cost of service”, including the recovery of investment and a reasonable rate of return. Regulation: social and political (RSP)
The price is set, on an irregular basis, probably by a Ministry, on a political / social basis, in response to the need to cover increasing costs, or possibly as a revenue raising exercise.
Regulation: below cost (RBC)
The price is knowingly set below the average cost of producing and transporting the gas often as a form of state subsidy to its population.
No Price (NP)
The gas produced is either flared, or provided free to the population and industry, possibly as a feedstock for chemical and fertiliser plants. The gas produced may be associated with oil and / or liquids and treated as a by-product.
Not known (NK)
No data or evidence.
180
Trends in Wholesale Gas Price Formation Mechanisms : Results of the 2009 IGU Survey
countries, where gas is imported, it could typically be a border price. The more difficult cases are countries where all gas consumed is
W ORLD PR I CE FOR M AT I ON M ECHAN I S M S 2 0 0 9 NP 1%
supplied from indigenous production, with no
RBC 11%
international trade (either imports or exports)
OPE 21%
and the concept of a wholesale price is not recognised. In such cases the wholesale price could be approximated by wellhead prices or
RSP 11%
city-gate prices. Generally the wholesale price is likely to be determined somewhere between the entry to the main high pressure transmission system and the exit points to local distribution companies or very large end-users.
RCS 13%
The initial data collection was done on a country basis. The data were then collated to a regional level using the standard IGU
NET 1%
regions. In preparation for the initial survey, a
BIM 6%
GOG 36%
series of discussions were held at the PGC B.2 sub-group meetings on the definition of
Note: Percentages rounded, NK was less than 1%.
different types of price formation. It was decided to use for categorisation purposes the wholesale pricing mechanisms described in Table 1.
The results presented here focus on the world picture with some regional breakdown,
above
Figure 1.
and not particularly on the breakdown of the l Results of 2009 survey
different categories of indigenous production
In looking at price formation mechanisms, the
and imports, although such detailed information
results have generally been analysed from the
is available.
perspective of the consuming country. Within each country gas consumption, ignoring storage, can come from any combination of
Figure 1 summarises the 2009 survey results at the world level. The largest single price formation category in
three sources, indigenous production, pipeline
2009 was gas-on-gas competition at 36%. This
imports and LNG imports. Data was collected
was across all categories – indigenous production
separately for each of these three gas supply
(especially in North America), pipeline imports and
sources showing the percentage of the
LNG imports. Oil price escalation accounted for
wholesale price which is determined by each of
some 21%, but was largely in pipeline imports and
the nine pricing mechanisms.
LNG imports. The three regulated categories
Each country was then aggregated in one of
accounted in total for some 35%, split broadly
the IGU regions and finally the IGU regions
equally between the three – cost of service, social
were aggregated to give the results for the world
and political and below cost. The regulated
as a whole. As well as collecting information on
categories were almost exclusively from indigenous
price formation mechanisms by country,
production.
information was also collected on wholesale price levels in each country.
In Table 2 (over) the regional breakdown by price formation category is highlighted.
Trends in Wholesale Gas Price Formation Mechanisms : Results of the 2009 IGU Survey
181
W ORLD PR I CE FOR M AT I ON 2 0 0 9 : RE G I ONAL BREA K DO W N 2009 North America Latin America Europe CIS Middle East Africa Asia Asia-Pacific Total World
above
Table 2.
Total Consumption (BCM) OPE
GOG
BIM
NET
RCS
RSP
RBC
NP
NK
TOT
0.0 19.7 371.7 0.0 19.7 6.2 68.7 175.4 661.4
789.4 18.0 155.7 130.3 1.0 0.0 6.7 18.7 1,119.8
0.0 5.2 2.3 88.4 30.4 3.3 3.1 45.8 178.5
0.0 14.0 1.0 0.0 0.4 0.8 0.0 0.0 16.2
0.0 13.1 0.0 284.5 0.0 0.6 106.0 7.9 412.1
0.0 59.0 19.1 21.0 121.6 8.8 30.0 79.6 339.1
0.0 0.0 0.4 96.5 162.6 77.2 3.3 0.0 340.0
9.8 0.0 4.6 3.8 3.2 0.7 0.0 0.0 22.0
0.0 0.0 0.0 0.0 2.0 0.0 0.0 2.4 4.4
799.2 129.0 554.7 624.5 340.9 97.6 217.8 329.9 3,093.6
The gas-on-gas competition category is obvi ously dominated by North America, but in Europe with the UK market and the continental trading
time of negotiation. The three regulated categories – cost of service,
hubs it is also important. The contributions from
social and political and below cost – are found
Asia and Asia-Pacific largely reflect spot LNG
predominantly in indigenous production in the CIS
sales. It may also seem surprising there is
and Middle East, plus China, Malaysia and
deemed to be significant gas-on-gas competition
Indonesia.
in the CIS region, specifically Russia. This reflects
It should be emphasised that choosing the
the significant changes in the domestic Russian
categorisation of price formation mechanisms in
market which has seen the larger consumers
individual countries is not an exact science. In
being allowed to trade directly with independent
particular, the distinction between the gas-on-gas
producers at negotiated prices. Previously much
competition and bilateral monopoly categories in,
of this sector was price regulated, as the rest of
for example, Russia and Australia may be
Russian domestic consumption is, largely supplied
becoming increasingly blurred. Since the first IGU
by Gazprom.
survey for 2005, wholesale prices under the BIM
The oil price escalation category is dominated by imported gas under long-term contracts, linked to oil product prices, into Europe, as well as the
category have risen to be much closer to, what might be called, “market” levels. As well as collecting data on price formation
LNG contracts into Asia-Pacific, linked to crude oil
mechanisms the IGU study also collected infor
prices. The level in Asia is a combination of LNG
mation on wholesale price levels in 2009. The
imports and indigenous production in Pakistan
results here should be treated as broad orders of
and India.
magnitude, since the definition of wholesale prices
The bilateral monopoly category is important
is quite wide. It is typically a hub price or a border
in intra-CIS trade and indigenous production in
price in the case of internationally traded gas, but
Qatar, Australia and New Zealand. In Australia,
could also easily be a wellhead or city-gate price.
outside the spot market in Victoria, the majority
182
price reflects the market fundamentals at the
Figure 2 (over) shows a snapshot of price levels
of gas is sold under 10-to-15-year contracts
for 2009. From year to year, wholesale prices can
where the price of gas is fixed initially and then
obviously change significantly. Generally the
changes in line with inflation. The initial base
highest wholesale prices are in regions where, it
Trends in Wholesale Gas Price Formation Mechanisms : Results of the 2009 IGU Survey
l Changes in price formation mechanisms
A V ERA G E W HOLESALE PR I CES BY RE G I ON
As the 2009 survey followed the 2005 and 2007 surveys, it enables an analysis of changes
Europe
in the relative importance of price formation
Asia-Pacific
mechanisms to be undertaken. Changes in the
Total World
relative importance of the different price formation mechanisms can occur either because of
North America
differential growth in consumption between
Asia
countries or because price formation mechanisms
CIS
themselves change.
Africa
While world consumption grew by just over
Latin America
8% between 2005 and 2009, this masked very
Middle East $0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$/MMBTU
different changes between regions. Consumption in Europe and the CIS declined, in contrast to a more than 50% increase in Asia – India and China – and a 30% plus increase in the Middle
above
Figure 2.
could be said that, there is more “economic”
East. The decline in Europe would imply that the
pricing – i.e. gas-on-gas competition and oil
oil price escalation category would decline in
price escalation – in Europe, Asia-Pacific and
importance while the rise in Asia and the Middle
North America – although the decline in spot
East would suggest the regulated categories
prices in the latter has brought prices down
increasing, although this would be partly offset
compared to previous surveys. With both China
by the decline in CIS consumption.
and India increasing wholesale prices recently,
b e lo w
Figure 3.
Figure 3 shows the respective percentage
the average is now very close to North American
shares in the different price formation mechanisms
spot prices. The lowest wholesale prices are
for 2005, 2007 and 2009.
generally where regulation (or state decrees)
The main increase has been in the gas-on-
dominates in the Middle East, Latin America,
gas competition category rising from 30% in 2005
Africa and the CIS.
to 32% in 2007 and to 36% in 2009. If consumption patterns had not changed between regions from 2005 to 2009 the GOG category
PR I CE FOR M AT I ON M ECHAN I S M S SHARES ( % ) : 2 0 0 5 TO 2 0 0 9
share would have been some 2% higher in 2009 at 38%. The key change from 2007 to 2009 was
40%
in the CIS following the changes in the domestic
35%
Russian market, which added some 4% share. The
30%
share in Europe has been increasing steadily from
25%
2005 through 2007 and 2009 as the importance
20%
of continental trading hubs increases, at the
15%
expense of oil price escalation. The gas-on-gas
10%
competition share in Asia-Pacific increased
5%
between 2005 and 2007 but declined from 2007
0% OPE
GOG
BIM 2005
NET
RCS 2007
RSP 2009
RBC
NP
NK
to 2009 as the impact of the recession resulted in declines in spot imports into Japan, South Korea and Taiwan, although the 2009 share was still
184
Trends in Wholesale Gas Price Formation Mechanisms : Results of the 2009 IGU Survey
Sonangol, Creating the environment to establish a natural gas-based industry in Angola Av. Lenine nยบ 58 5ยบ/6ยบ andar C.P. 2055-Luanda Angola Fax: +244 222 336 751 Website: www.sonangol.co.ao
little from 2005 through 2007 to 2009. How
CHAN G ES I N W HOLESALE PR I CE LE V ELS ( S / M M BTU ) : 2 0 0 5 TO 2 0 0 9
ever, there have been significant changes to price levels in the different price formation
$9.00
categories (see Figure 4).
$8.00
Average wholesale prices were just over
$7.00
$4.00 per MMBtu in 2009, slightly down from
$6.00
$4.50 in both 2007 and 2005. Over the period
$5.00
gas-on-gas competition prices have been on a
$4.00
declining trend from being the highest prices in
$3.00 $2.00
2005 at over $8.50 to just over $4.00 in 2009
$1.00
– around the world average. In contrast oil price escalation prices have risen consistently
$0.00 OPE
GOG
BIM 2005
NET
RCS
2007
RSP
RBC
TOT
2009
reflecting increasing oil prices over the period. Bilateral monopoly prices have also been consistently rising but this reflects the transition, especially in intra-CIS trade, towards more
above
Figure 4.
higher than in 2005. The decline in the oil price
market related pricing.
escalation share from 2005 to 2009 has been wholly down to the changes in Europe, partly
l Conclusions
offset by a slight increase in share in Asia
The trend towards more gas-on-gas competition
between 2007 and 2009, as the new East Coast
continued in 2009, rising to 36% of world gas
Indian production came onstream.
consumption, from 32% in 2007 and 30% in
The bilateral monopoly share has been in
2005. The increase between 2007 and 2009
steady decline from over 9% in 2005 to just
was largely due to changes in the domestic gas
under 6% in 2009. This reflects wholly the
market in Russia together with the continuing
changes in Russia’s price formation
growth of trading hubs in Europe. The growth
mechanisms. The overall share of the three
in Europe was at the expense of the oil price
regulated categories has changed little from
escalation category which continued to decline
2005 through 2007 to 2009, staying at around
from the 24% level in 2005 to 22% in 2007
35%, although based on the more rapid growth
and 21% in 2009. This was partly offset by a
in consumption in some of the areas where
rise in Asia as a result of new production in
regulated pricing predominates, the share
India. The three categories of regulated prices
should have risen slightly if price formation
amounted to some 35% of world gas
mechanisms had not changed. The key change
consumption in 2009, broadly the same level
has been within the regulated categories with a
as in 2007 and 2005. However, there was a
switch in Russia from below cost to cost of
significant shift in 2009 in the regulation
service of a share of 9% of total world con
categories away from below cost towards cost
sumption. This change in categorisation reflects
of service as regulated prices in Russia rose to
the fact that Gazprom no longer makes losses,
more economic levels.
on an average cost basis, on regulated sales into the domestic market.
186
Mike Fulwood is a Principal in the Global Gas
In respect of the levels of wholesale prices,
division of Nexant and is also Leader of Study
average prices around the world have changed
Group 2, Programme Committee B – Strategy.
Trends in Wholesale Gas Price Formation Mechanisms : Results of the 2009 IGU Survey
Galp Energia Galp Energia is an integrated operator present through out the whole oil and natural gas value chain. Its activi ties are expanding strongly worldwide and are located in Portugal, Spain, Brazil, Angola, Venezuela, Mozambique, Cape Verde, Guinea-Bissau, Swaziland, Gambia, East Timor, Uruguay and Equatorial Guinea. The ongoing Exploration & Production projects support the strategy that will enable production goals to be achieved. Brazil and Angola are core countries for the execution of this strategy. The current base of hydrocarbon resources, which exceeds three billion barrels as identified by intensive exploratory work, is a solid foundation on which Galp Energia’s strategy for its production business rests. In Gas & Power Galp Energia is the leading company in Portugal for natural gas supply, distribution and sales with more than 900,000 clients and more than 4 billion cubic metres (bcm) of annual sales. In Spain its AFj_Press_148x210_ing.ai 1 2008 1/25/11 3:47 PM gas supplier for presence started in as a natural
the industrial market and increased significantly in 2010 with the purchase by Gas Natural of over 400,000 customers in the Greater Madrid region, adding about 0.4 bcm of annual consumption. With this acquisition Galp Energia became the second player in terms of customers served in the Iberian Peninsula. In the power sector, Galp Energia aims to become an important player in Portugal, both in terms of production and supply to the final market. Galp Energia’s priority is to diversify its sources of natural gas by developing its ongoing projects in the Exploration & Production business segment, having various LNG upstream and midstream opportunities under review. In Refining & Marketing, Galp Energia is focused on extracting additional value from its assets, namely from its refineries and Iberian network for marketing oil products, which expanded significantly in 2008 following the acquisition of Agip and ExxonMobil’s marketing platforms in the Iberian Peninsula.
EFET is an organisation designed to promote
EFET: Promoting Wholesale Gas Markets
and facilitate European energy trading in open, transparent and liquid wholesale markets, unhindered by national borders or other undue obstacles.
By Maria Popova
EFET improves the conditions for energy trading by: l Finding solutions for market design and advo
Over the last few years, the European wholesale gas markets have undergone considerable improve
cating suitable policies and regulatory measures; l Providing standard solutions to the repetitive
aspects of wholesale energy transactions; and
ments. New trading locations have emerged, energy exchanges have taken a growing interest in
l Encouraging probity, good risk management
gas trading and the established hubs have bene
practices, responsible corporate governance
fited from greater liquidity. Unbundled trans
and proper accounting among energy traders.
mission system operators (TSOs) have started
b e lo w
Figure 1.
offering better services and the range of traded
l Membership and organisation
products has widened. As a result of these improved
There has been tremendous success during the
conditions, an increasing number of companies
last few years, with the conditions for gas trading
have engaged in gas trading. The mounting
improving throughout Europe and with gas trading
interest in wholesale gas trading across the
now widely recognised as the best way forward.
Continent is also evident in the rising membership of
Thus, during 2010 more than 20 new EFET mem
the European Federation of Energy Traders (EFET).
bership applications were approved, including companies with major gas portfolios. EFET currently has more than 100 member companies,
EFET OR G AN I SAT I ON CHART
active in over 27 European countries. EFET aspires to the adoption within its member companies of core values, such as:
EFET Members
l Integrity of action, for example in dealing with
counter-parties and business stakeholders; Secretariat/ General Support
PR/Communication/ Education
Board
l Respect for others, such as fellow employees,
competitors and professional advisors; l Open communication, subject to observing
legitimate business confidentiality; Market Design, Policy and Regulation
National and Regional Implementation
Contractual and Transactional Standardisation
l Professionalism, ensuring that only qualified
parties and staff are involved in trading activities; l Observing the spirit of a truly open and sus
tainable wholesale marketplace. The strategic direction of EFET is defined by the Board, which meets several times a year. The Secretariat, on the other hand, is responsible for the operational level. It coordinates and facilitates Paul van Son, Chairman of the EFET Board.
188
Jan van Aken, EFET Secretary General.
EFET :
Colin Lyle, Chairman of the EFET Gas Committee.
Pr o m ot i n g
Maria Popova, Secretary of the EFET Gas Committee.
W h o l e s a le
Gas
the work of the various EFET committees, task forces and working groups. As presented in the organisational chart (see Figure 1), the work of EFET is organised in three
Mark ets
workstreams: market design, policy and regu
locations. Primary capacity allocation and con
lation; national and regional implementation; and
gestion management are matters of concern for
contractual and transactional standardisation.
the Capacity Group. The goal of EU-wide cashed-
Within these broad areas, the EFET Gas, Electricity,
out local and regional balancing markets is
Legal and Business Process Optimisation
advocated by the Market-based Balancing Group,
Committees supervise the activities of a number of
while the LNG Group focuses on the harmoni
issue- or region-specific working groups.
sation of services that make LNG more fungible
The main role of the Electricity Committee is to
with pipeline gas. Lastly, working in close
advocate policy changes and modes of regulation
cooperation with the EFET Market Supervision
likely to stimulate the efficient and harmonised
Task Force, the Information Group encourages
functioning of the European wholesale electricity
transparency along the whole gas chain, in
markets. The Legal Committee has developed and
particular striving for real-time information
released a number of standardised documents
provision by TSOs on the use and availability of
intended to facilitate the trading of energy and
transmission infrastructure.
energy-related commodities. The EFET Gas Master
In addition to the subgroups dealing with key
Agreement, a number of annexes to facilitate gas
issues at the European level, EFET helps the
trading at the more liquid hubs in Continental
development of national and regional gas markets
Europe, as well as an ex-ship LNG trading
through a growing number of local task forces.
agreement can be downloaded free of charge
These include Belgium, France, Germany, Italy, the
from the EFET website (www.efet.org). The Business
Netherlands, Central and Eastern Europe and the
Process Optimisation Committee guides the work
Iberian Peninsula.
of the Back Office Group, which focuses on the standardisation of data exchange and industry
l Challenges facing European energy
processes as exemplified by EFETnet (see www.
markets
efetnet.org).
Well-functioning wholesale markets in electricity and gas are essential, not only because they
l Who deals with gas issues within EFET?
enhance competition and expand the spectrum of
The Gas Committee focuses on improving the
consumer choices, but also because they help to
interconnections and liquidity across Europe’s
maintain supply security, achieve environmental
widely varying national gas markets. To this end,
objectives and sustain EU competitiveness in a
in the context of the Madrid Gas Forum1 and other
global context. In the past 10 years, the European
communication and cooperation frameworks, the
energy sector has undergone fundamental trans
members of the EFET Gas Committee engage in a
formations. Market participants and regulatory
continuous dialogue with regulators, TSOs and
authorities have made important commitments to
other relevant actors.
improve market transparency and liquidity, with
The work of the Gas Committee is supported
the ultimate goal of creating a single European
by several subgroups dealing with the main
market in electricity and gas. As a result of these
obstacles to trading liquidity. The Gas Hub
efforts, wholesale trading, particularly in electricity,
Development Group promotes improvement in
has been successfully established in a number of
the services provided at existing and new trading
European regions. However, the development of efficient and
1 The Madrid Gas Forum (http://ec.europa.eu/energy/gas_ electricity/forum_gas_madrid_en.htm) is chaired and organised by the Energy Directorate of the European Commission.
competitive markets in electricity and gas is a complex task, as these are network-bound energy
EFET :
Pro m oti ng
Wholesale
Gas
Mark ets
189
siderably to market liquidity. Despite the technical difficulties of accepting different gas qualities, the number of market areas in Germany is expected to consolidate to just two within the next few years. The UK, Belgium and the Netherlands already have volumes of gas traded in the high-pressure pipeline systems that match or exceed national gas consumption. Further progress has been made in the Netherlands with the launch of a traded gas futures contract. In Central and Eastern Europe, the Czech Republic created a virtual trading point (VTP) during 2010 and Hungary is on the same track. In Denmark, Italy and Austria energy Important gas trading developments are underway in places such as Baumgarten in Austria.
exchanges are now enabling gas trading to take place through screen-based services in addition to the more traditional over-the-counter (OTC)
commodities (with the exception of LNG). They
bilateral deals and trading via brokers.
cannot be freely traded unless there is equitable
underway in other countries, notably at the Italian
pipelines throughout Europe. Despite considerable
VTP and in Austria at Baumgarten near the border
progress, a number of important structural and
with the Slovak Republic, but access to capacity in
policy challenges still remain.
the international pipeline routes remains a con
The third EU Gas Directive and the new EU
straint. In Spain, where almost 70% of the supply
Gas Regulation that took effect on March 3, 2011
is LNG, traded volumes are significant, and the
include an assumption that there will be a market-
development of a transparent and liquid market
based approach to natural gas. There is a grow
downstream may well now be on the cards, with
ing recognition that the successful liberalisation of
improvements in hand for enhanced interconnec
the whole EU gas market will require improve
tion capacity with the rest of the EU and increased
ments in the conditions for gas trading, which
flexibility from gas storage.
recognise the legitimate positions of existing
Tremendous progress has been achieved, but
players, whilst encouraging new entrants. As
lack of liquidity still prevails in most markets. The
trading develops, then the exchanges will start to
absence of a reliable, transparent gas spot price,
offer standard products with different maturities of
particularly in eastern and southern countries,
contracts for buying and selling wholesale gas on
creates difficulties in hedging and in devising
the forward, day-ahead, and intra-day and
reliable financial instruments to manage risk. Even
balancing markets.
within north-west Europe, incompatible pipeline
Over the past few years, countries like
190
Important gas trading developments are also
third party access to the power grids and gas
access causes geographical fragmentation within
Germany and France have significantly improved
the region. Helped by the global supply-demand
their internal network access arrangements. In
balance, traded gas volumes have been increasing
2009, the five French market areas were merged
and the outlook should be for further growth. The
into three: PEG-North, PEG-South and TIGF. The
new EU legislation should help, but this still needs
number of market areas in Germany halved from
to be implemented properly to ensure that robust
12 to six in the same period, contributing con
wholesale markets are established to support con
EFET :
Pr o m ot i n g
W h o l e s a le
Gas
Mark ets
sumers’ needs throughout Europe. In particular,
constitutes insider information and what may
the following issues need to be addressed:
amount to market manipulation, in a manner
l Guaranteeing fair access to gas infrastructure.
suitable for the physical and commercial realities
Priority access is still a problem at some high-
of the power and gas sectors throughout Europe.
pressure pipeline interfaces in Europe. There is
It is crucial that market integrity rules recognise the
a continuing failure to ensure that capacity
market structures and underlying physical
needed by the market is built and that all
characteristics of the commodities concerned.
existing unused capacity is offered to market
Moreover, with regard to the consultation on
participants. Coherent mechanisms for capacity
proposals to reform the application of the Markets
trading are still missing.
in Financial Instruments Directive (MiFID) to
l Reducing the number of market areas. In order to
commodity derivative transactions launched in
create supra-national gas grids and trading zones
parallel by DG Internal Market of the European
that transcend national borders, market rules
Commission, EFET believes many of the ideas put
need to be simplified and harmonised. Indepen
forward will impose a disproportionate burden on
dent operators, responsible for several combined
corporate Europe and could seriously undermine
pipeline networks, need to be established.
the achievement to date of a competitive single
l Improving information provision. Information on
European energy market. They would hugely
the physical use and availability of gas infra
increase business costs, in particular for smaller
structure is often not available or not provided
wholesale market participants, thereby erecting
in a consistent or coherent form. To build
considerable new barriers to entry, and in turn
confidence and encourage trading, trans
jeopardising the liquidity and depth of wholesale
parency needs to be enhanced. TSOs should
power and gas markets across Europe.
provide all market participants and regulators with near real-time information on the avail
l EFET’s role and vision
able capacity and the actual gas flows.
Advocating appropriate energy policy and regu
Energy market transparency and integrity are
lation has been recognised from the outset as a
b e lo w
core activity for an association representing the
also issues of particular relevance for the proper
Figure 2.
functioning of European gas markets. Promoting transparency and integrity, while preserving the
EUROPE ’ S G AS HUBS
liquidity and depth of the markets is a priority for EFET. Therefore, the Federation has supported the
Virtual hub in entry-exit system
European Commission as it has developed its
Physical hub Physical hub with virtual trading point
proposals for a Regulation on Energy Market Integrity and Transparency (REMIT) and welcomes
Mature, liquid hub with price transparency
the move to put in place a harmonised European regime, whereby regulators may receive necessary information about transactions. Their access to
NordpoolGas
Less mature or less liquid hub, with growing price transparency
TTF
NBP
Gaspool
Future hub ZEE
such information should ensure that they can
Active exchange trading
effectively monitor markets.
Strong price link
The future regime must, however, be carefully
Weaker or expected future price link
designed, so as not to harm the market, nor
PEG-N
TIGF
PEG-S
CEGH
NCG
PSV
AOT
hinder its development. It will be important to tightly define (in implementing measures) what
EFET :
Pro m oti ng
Wholesale
Gas
Mark ets
191
interests of European power and gas traders.
l Each ISO’s system has one balancing zone;
EFET is known for working quickly and profes
l Bid and offer prices are used for cashing out
daily imbalances;
sionally to analyse issues that affect the operation of Europe’s wholesale energy markets. The
l Robust and liquid gas futures markets exist; and
relevance of the Federation’s analyses of these
l Capacity rights for any individual transfer route
issues is made possible by the experience of our
are in the hands of many companies.
geographically diverse membership and by our
Now, in 2011, entry-exit systems are indeed
emphasis on maintaining a flexible organisation,
the norm and TSOs are increasingly independent.
in which whenever possible, decisions are reached
Competition authorities have addressed several
by consensus. Conflicting national or sector
market foreclosure issues and pipeline, storage
positions are discussed internally, with the end
and LNG capacity is increasingly in the hands of
result being the publication of EFET position
many companies. New EU Network Codes are
papers that have been objectively and carefully
being written for pipeline capacity allocation and
argued. Table 1 lists examples of some position
for market-based balancing. There is no doubt
papers published by the EFET Gas Committee
that the conditions are improving for gas trading,
over the past few years.
and with the continuing influence of the European
Five years ago, the EFET Gas Committee set out
Federation of Energy Traders the vision of robust
a vision for the European gas market, in which:
and liquid gas futures markets throughout Europe
l Entry-exit systems are the norm;
will be a reality.
l Independent system operators (ISOs) are
established;
Maria Popova (M.Popova@efet.org) is EFET’s
l Long-term contracts that foreclosed the market
have been changed; right
Table 1.
Policy and Communication Officer and Secretary of the EFET Gas Committee.
SO M E E X A M PLES OF EFET G AS POS I T I ON PAPERS EFET Response to ERGEG Consultation on a Conceptual Model for the European Gas Market, January 2011 EFET Response to the ERGEG Consultation on Transparency Requirements for Natural Gas, November 2010 Framework Guidelines on Gas Balancing, June 2010 Essential Elements of a Guideline for Congestion Management, March 2010 Essential Elements of a European Framework Guideline for Capacity Allocation, February 2010 EFET-Eurogas Joint Note on LNG Harmonisation, December 2009 EFET Interim Paper on Interruptible Capacity, November 2009 Gas Storage in Europe – Adding Security through Flexibility, July 2009 Common Position of EU Gas Industry Associations on Regional Cooperation, June 2009 The Allocation of Primary Gas Capacity, September 2008 Market-based Balancing, May 2008 Regional Gas Grids – towards the Single European Market, October 2007 Enabling Secondary Market Gas Capacity Trading, March 2007 Note: All EFET gas position papers are available for download from the EFET website (www.efet.org).
192
EFET :
Pr o m ot i n g
W h o l e s a le
Gas
Mark ets
apxendex.com
Making markets work
Today’s world calls for transparent, secure and integrated energy markets. That’s why Europe’s major financial institutions and energy companies rely upon APX-ENDEX: Europe’s premier provider of power and gas exchange services for the wholesale market. APX-ENDEX creates transparent, integrated markets for trading in the Netherlands, the United Kingdom and Belgium.
Ten years ago natural gas was used for vehicle
The Breakthrough Decade for NGVs
fuel in about 40 countries around the world; today this “NGV Club” has over 80 dedicated members. It is also interesting to note that during this decade
By Eugene Pronin, Davor Matic and Manuel Lage
the “centre of NGV gravity” shifted away from Latin America. Pakistan (2.5 million NGVs), Iran
The first decade of the new century and the new
(2 million) and India (0.9 million) are among the
millennium is over so now is a good time to take
world’s top NGV nations. Adding China (0.5
stock. For the NGV industry the beginning of the
million), these four countries account for almost
21st century was extremely successful. During the
50% of the world NGV fleet.
last 10 years isolated national markets have
Another noteworthy fact is the change in the
matured into a global business community that
top 10 list between 2000 and 2010 (see Figure 1).
brings together politicians, the gas industry, vehicle
Argentina, Brazil, India, Italy and Pakistan are still
manufacturers, passenger and goods transpor
there on the list, while Canada, Egypt, Russia, the
tation companies, producers of cylinders and other
USA and Venezuela have left and let Bangladesh,
on-board equipment, the cryogenics business and
China, Colombia, Iran and Ukraine into the
many other stakeholders.
champion’s club. These 10 leading nations have
Statistics from different sources may vary but the general trend is clear: the market is growing.
10.8 million NGVs between them amounting to 91% of the world NGV fleet.
In 2000, there were 3,500 CNG filling stations
market as a whole (see Figure 2), it is particularly
locations where gas vehicles can be filled with
interesting to see the 26% annual growth from
CNG, LNG or biomethane. The world population
2001 to 2008, when this forecast was made.
of NGVs has grown from 1 million vehicles in
The expected volume in 2010 was achieved,
2000 to 12 million in 2010 and gas consumption
giving more credibility to the annual growth
from 2.4 bcm to approximately 30 bcm.
forecast of 18% for the years to come, which
N G V FLEETS 2 0 0 0 AND 2 0 1 0 I N TOP 1 0 COUNTR I ES ( M I LL I ONS )
2000
2010 3000
500 450 400 350 300 250 200 150 100 50 0
2500 2000 1500 1000 500
NGVs (thousands of vehicles)
T h e
B r e a kt h r o ug h
De c a d e
for
NGVs
na ol um bi a U kr ai Ba ng ne la de sh
ly
hi
C
Ita
n nt in a Br az il In di a ge
an
Ira
ki st Pa
NGVs (thousands of vehicles)
Source: GVR and IANGV
194
Ar
A
rg en tin a Ita Pa ly ki st an U Ve ne SA zu el a Br az i Ru l ss ia Eg C ypt an ad a In di a
0
C
right
Figure 1.
Looking at the development of the world
around the world; and now we have 18,300
N G V W ORLD M AR K ET FORECAST
What other major changes did we see on the
single filling station increased from 287 in 2000
40
2007 7 million NGVs
30 2001 1.7 million NGVs
20 10
to 656 in 2010. It has been noted on several
0
91
occasions that the best economic return from a
19
CNG filling station will come when it serves 1,000 NGVs.
50
97 19 99 20 01 20 03 20 05 20 07 20 09 20 11 20 13 20 15 20 17 20 19 20 21 20 23 20 25
The average number of NGVs served by a
2020 65 million NGVs (9% market share)
60
95
decision-making processes.
70
93
they mirror general trends and could be used in
13 years, assuming 18% annual growth
80
19
necessarily reflect the true situation of the market,
Worldwide NGVs (million)
global NGV market during the past decade? Although average numbers do not always
6 years 26% annual growth
10 years 15% annual growth
19
by 2020.
19
would mean some 65 million NGVs in the world
Source: NGVA Europe, NGV Global
So far the world annual average consumption of natural gas per NGV has not changed dramatically. It remains at the same level as 10
invest, promote and support the use of natural gas
years ago: about 2,300 m per vehicle. Light duty
as a motor fuel.
3
automobiles prevail, whereas medium and heavy
have realised the unique and integral combination
NGV fleet. In China, France, South Korea, Spain
of environmental, economic and social advan
and some other countries where relatively large
tages of natural gas which, taken together, make
numbers of medium and heavy duty vehicles are
CNG and LNG the most eco-efficient transportation
used, average yearly consumption can reach
fuel. It is for that reason federal and municipal
11,000, 20,000 or even 30,000 m3 per vehicle.
authorities in many countries extend financial and
Another numerical indicator of NGV success annual gas sales per filling station. In 2000, it was
Figure 2.
Politicians and governments in many countries
duty vehicles make up only 5.8% of the world
during the past decade is the growth of world
above
administrative incentives to all participants in the NGV market. Retrofitting is still the major source of NGVs
just under 700,000 m3, and in 2010 it reached
around the world. However, more and more
900,000 m3.
original equipment manufacturer (OEM) gas vehicles are being marketed. There are now over
l Key progress points
80 NGV models manufactured by almost all
Quantitative indicators alone cannot give a
major automotive companies.
complete picture. Important ideological, political
Natural gas technologies have been
and technological progress has been made in the
successfully tested and approved for nearly all
global NGV market.
transport applications. Apart from the increas-
A key achievement is that in a number of
ingly commonplace gas-powered cars, buses or
positive cases, there is no longer a chicken-or-egg
trucks, there are sea ferries and aircraft, railway
dilemma regarding the provision of refuelling
locomotives and tuk-tuks, airport handling equip
stations and the take up of NGV vehicles. Gas
ment and fishing boats, forklifts at storage
companies all over the world – big or small,
facilities and snow groomers in ski resorts –
government owned or private – have said a
natural gas is safe, clean and offers price
definite “Yes” to the NGV market. They lobby,
advantages everywhere.
The
Brea kthrou gh
Decade
for
NGVs
195
Recent studies which also involved interviews1
Natural gas/hydrogen blends demonstrate high
with OEMs show the positive attitude of (European)
environmental benefits and economic efficiency.
OEMs towards CNG as a cost-effective way to
These blends could be produced at the CNG
meet EU criteria (regarding NOX and CO2
filling stations or onboard the vehicle.
emissions) with downsized petrol engines.
No real commercial success has been achieved
But NGV markets need optimised engines.
in adsorbed natural gas (ANG) technologies,
New generations of CNG vehicles are likely to
although R&D projects have been carried out
move into other regions in parallel with the
in a number of countries. It is realistic to expect
development of more stringent national and
tangible progress in the ANG area in the
local standards.
next decade.
Unfairly forgotten for a time, dual fuel (diesel/
Gas-to-liquid technologies (GTL) remain
natural gas) heavy duty vehicles have returned to
promising although so far the actual introduction
the market.
of GTL falls far behind original expectations.
Radio frequency identification (RFID) tech
Not only NGV technologies are maturing.
nologies have been introduced into the NGV
There is a lot of international activity going on
market to help improve the safety of high-pressure
around the world and relations between IGU and
cylinders.
the UN Economic Commission for Europe
A new generation of ionic compressors has
(UNECE), the European Business Congress (EBC)
recently been introduced. This promising
and major NGV associations are developing. The
technology will exclude the contamination of
“Blue Corridor”, a joint UNECE/IGU NGV study,
natural gas with lubricating oil that circulates
NGV rallies, major international conferences and
inside conventional compressors.
events all over the world – these are just a few
The biofuel community has finally found a way to avoid sacrificing land or other resources in order to make fuel for vehicles. Second generation
examples of true cooperation. Summarising NGV technology developments in the medium-term, we will see more and more
biomethane collected during organic waste
products along five main lines:
processing is probably the best transportation fuel
l CNG hybrid vehicles, for urban bus
from a “green” point of view. Moreover, pipeline-
applications;
quality methane injected into the distribution grid
l Dual fuel technology for heavy duty trucks;
requires no new midstream or downstream
l Biomethane used directly or mixed in different
technologies. The infrastructure is already in place for all categories of end customers including vehicle owners and operators. However, it must also be stressed that biomethane will always be
proportions with natural gas, reducing notably the well-to-wheel CO2 balance; l LNG in trucks and buses for medium- and
long-distance road transport; and l Methane/hydrogen blends, as a bridge to
more expensive than natural gas. Different kinds of LNG and liquefied-to-CNG
eventual hydrogen-based mobility.
equipment are flourishing in many countries. The time of liquefied NGVs is still to come but this will
l Towards 2020
happen soon.
The results of the past decade leave no space for doubt: very solid foundations for the global NGV
1 CNG as an automotive fuel for Europe/CEE: Is it possible to achieve 5%+ market share for CNG? Necessary steps and actions to achieve, Duisburg-Essen University, Centre for Automotive Research, March 2010.
196
T h e
B r e a kt h r o ug h
De c a d e
for
NGVs
business have been laid down. The second decade of the 21st century is the time for really big projects all over the world to make at least 50
million NGVs a reality. To achieve this goal it appears reasonable to: l Develop, modernise and harmonise missing
and/or conflicting national and regional NGV legislative and regulatory regimes for filling station infrastructure and NGV construction and operation;
trate on railway locomotives, air- and watercraft with significant fuel consumption; l Increase the use of LNG/LBM where logistically
and economically viable; l Obtain pan-European permissions and
approvals for onboard LNG tanks for NGVs; l Continue R&D on hydrogen, GTL and hybrid
l Eliminate the remaining barriers that hinder the
technologies for the transportation sector;
transit of methane-powered vehicles between
l Continue the introduction of advanced tech
countries and continents; l Strengthen cooperation between the gas
industry, NGV manufacturers, qualified vehicle modifiers (QVM) and national and local governments; l Build up networking between international
nologies to increase the safety of NGVs systems (like RFID); l Spread knowledge about the benefits of NGVs
among politicians, managers and the general public; l Organise promotional events (such as NGV
organisations such as UNECE, IGU, ISO and
rallies and caravans, trade shows and
EBC and the major NGV associations;
conferences).
l Invite governments and private businesses
to launch large-scale international
And the world gas industry must preserve its leading role in this process.
NGV projects; l Create a comfortable environment for investors
and other stakeholders; l Broaden NGV diversity by introducing new
Eugene Pronin of Gazprom is the President of NGVRUS, Vice Chairman of WOC 5 and the Leader of SG 5.3; Davor Matic of OMV Gas Adria
types and makes of vehicle, particularly heavy
d.o.o. is Deputy Leader of SG 5.3; Manuel Lage is
duty ones with 420+ horsepower engines;
the General Manager of NGVA Europe and a
l Reach beyond on-road vehicles and concen
member of SG 5.3.
The range of vehicles which took part in the NGV rally “Blue Corridor 2010” highlights the breadth of possibilities for NGV development.
The
Brea kthrou gh
Decade
for
NGVs
197
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Russia’s Initiative in UGS Education and Training
analysis and improved performance prognosis.
By A.E. Arutiunov, S.A. Khan and M.P. Khaydina
might satisfy the broad professional, technical and
High levels of UGS automation also imply the need for minimal staffing. No high school trains licensed specialists who managerial requirements of a UGS staff member.
In common with other branches of the gas
As a rule UGS companies have to employ speci
industry, the storage sector is beginning to see a
alists with a standard industry educational back
shortage in technical skills. This is a critical issue
ground: geological, geophysical, drilling, develop
for companies engaged in the operation or
ment of oil and gas fields, engineering and
maintenance of existing facilities, or who are
process systems, etc. The knowledge of any of
developing new projects. In Russia the issue has
these specialists is very specific. At best, they have
been addressed with an initiative to build specific
experience in gas field development and
curricula dedicated to underground gas storage
operation.
(UGS) competencies.
JSC Gazprom has considerable experience in
The UGS sector has been a part of the gas
UGS construction and operation and, since 2006,
industry for approximately 100 years and its
has used this experience to offer programmes
operations are characterised by some specific
designed to provide all-round training and
peculiarities. For example, gas field exploitation
retraining as well as to raise the skill level of UGS
causes a constant and gradual decrease in
staff. Curricula have been developed by JSC
working pressure and a relatively constant
Gazprom’s Transportation, Underground Storage
withdrawal rate, which is not the case in UGS
and Gas Utilisation Department under the control
surface facilities or in their reservoirs. This requires
of Professor, Doctor of Sciences O.E. Aksiutin and
additional expense for the overhaul and ongoing
Candidate of Sciences S.A. Khan. A.E. Arutiunov is
repair of UGS assets, for diagnostics and for geo-
also taking an active role. The coordinator of the
technological inspection. Besides the alternation of
project is the Head of JSC Gazprom’s Department
maximum and minimum allowable reservoir
of Staff Management, E.B. Kasian.
pressures throughout the year, the mobility and the
Gazprom and organisations which have scientific,
the coordination of well construction and overhaul
intellectual and teaching potential, and which also
activities with UGS exploitation regimes, explor
have appropriate experience and staff to take on
ation and fields. This means that UGS staff need
the work. Leading educational and scientific
specialised knowledge and skills in addition to
centres are involved such as Gubkin Russian State
having standard geological and engineering
University of Oil and Gas, Gazprom VNIIGAZ Ltd
capabilities.
and the Institute of Fuel-Energy Complex Staff
Underground storage installations are mostly
200
The curricula are jointly designed by JSC
direction of gas-water contact movement requires
Development Issues (ISD FEC). The following
situated close to gas consumers and inhabited
curricula are currently offered:
districts, generating specific demands for industrial
l A Master’s programme in UGS from Gubkin
and environmental safety. Modern UGS
University’s Gas Technology and UGS
installations are expensive and complicated
Department (with certain studies at Gazprom
industrial facilities. They are equipped with
VNIIGAZ Ltd);
integrated systems, incorporating subsurface and
l A programme of complementary professional
surface modelling in order to allow for fast system
education (about 1,200 hours) leading to a
R us si a’ s
I n i t i a t iv e
i n
U GS
Educat i on
and
T rai nin g
qualification as a specialist in the field of UGS, (ISD FEC); and l Two independent programmes for raising the
level of skills (each comprising 72 hours of tuition) which are taught separately at Gubkin University and Gazprom VNIIGAZ Ltd. All these programmes are included in JSC Gazprom’s continuing professional education system for staff. Another new educational skill conversion programme was prepared in 2009 entitled “Creation and Operation of UGS”. The course of 592 hours will be run by ISD FEC and
Surface installation at the Karashurskoe UGS facility in Russia.
launches this year. All the programmes satisfy the requirements of the State educational system of
After successful graduation and the presen tation of the degree thesis, graduates receive the
the Russian Federation.
State standard diploma. It is a certificate of addi
There are now 11 Masters who are official specialists in UGS and this year six students are set
tional education with a complementary qualifi
to graduate and become Masters. The initial 10
cation given.
students who followed the programme of comple
Under the two-year programme, studies are
mentary professional education successfully presented
mainly carried out on a correspondence basis with
their qualification papers in December 2009, and 12
students also studying eight on-site modules
more students are following this programme. They
during the course. Each module lasts two weeks.
will finish their education in December 2011. Each
The eighth and final module is dedicated to the
year more than 20 people increase their skill
thesis, the State examination and the presentation.
levels after the 72-hour programme in Moscow.
Students also have personal study work and essays to complete between modules.
l Study requirements
Students wishing to study on the new Master’s courses must already have a Bachelor’s degree or be experts with qualifications including oil and gas specialisations, from Russia or elsewhere. Studies are divided between the premises of Gubkin University and Gazprom VNIIGAZ Ltd, and take two years to complete. Master’s thesis super visors are high-level specialists from JSC Gazprom, Gazprom VNIIGAZ Ltd, Podzemgazprom Ltd, or Gubkin University. Students who enrol in the complementary pro fessional education courses must already have higher education qualifications (possibly but not necessarily in fields such as geology, geophysics, drilling, development, oil and gas recovery) as well as UGS experience.
R u s si a’ s
Russia has an extensive network of UGS facilities to balance its gas requirements throughout the year.
I n i t i a t iv e
in
U GS
Educat i on
and
T rai nin g
201
education. Most of the students are employed by Gazprom subsidiary companies with more than 80% employed by Gazprom UGS and its branches. Further development of the UGS professional education system is coordinated by JSC Gazprom’s Department of Transportation, Underground Storage and Gas Utilisation. For the 2011-2013 period, study materials including lectures and manuals will be prepared on the basis of the existing experience in the main Gubkin Russian State University of Oil and Gas teaches the core disciplines for the UGS curricula.
courses: The role of UGS in the gas supply grid; Search for and exploration of geological structures for UGS creation; The peculiarities of drilling and
Students on the skill conversion course
well design at UGS facilities; Computer simulation
“Creation and Operation of UGS” must have
of UGS operation; Control over UGS operation;
either secondary or special technical education or
Theory and practice of UGS design; Economic
work experience in the field of UGS. This is a
indices of UGS operation; Surface complex of
shorter course and in addition to the corres
UGS equipment; Ecological monitoring of oil
pondence work there are five on-site modules.
and gas fields and UGS; and, Usage of horizontal
The fifth module is dedicated to the progress of
and multilateral wells while creating underground
the thesis and the State examination.
gas storage.
Having successfully graduated and after their
The curricula are dedicated to specialists from
thesis has been represented at a State examination,
the CIS and neighbouring countries which cooper
the graduates receive the State standard diploma.
ate with JSC Gazprom. Courses have been dev
This certificate opens opportunities to start a
eloped with a pragmatic approach and students
professional career in a new sphere of activities.
have to know Russian or be ready to study it.
The Gas Technology and UGS Department of
Russian may be taught at the Russian language
Gubkin University is in charge of the professional
department of Gubkin University. Furthermore, an
education in collaboration with the University’s
International Master’s programme has been
Gas Department. The Gas Technology and UGS
proposed in cooperation with a European
Department was organised in 2001 with the
university. All lectures will be in English.
support of Gazprom VNIIGAZ Ltd.
Thus the curricula for preparing specialised
The internationally renowned specialist, Doctor
staff for UGS design, construction and operation
of Sciences, Professor S.N. Buzinov is the scientific
are a key component for the manpower develop
head of the Gas Technology and UGS Department,
ment needed to serve the united Eurasian gas
with leading specialists from Gazprom VNIIGAZ
supply system.
Ltd delivering lectures. The core disciplines as well as some specific
202
Sergei A. Khan of JSC Gazprom served as
ones are studied at Gubkin University and the
Chairman of Working Committee 2 (2003-6) and is
professors, drawn from different faculties have
currently a member; A.E. Arutiunov of Gazprom
experience in manpower development for the oil
PHG Ltd and M.P. Khaydina of Gubkin Russian
and gas industry. The Gas Department coordinates
State University of Oil and Gas participated in the
the academic contributions to this new branch of
second WOC 2 meeting of 2010.
R us si a’ s
I n i t i a t iv e
i n
U GS
Educat i on
and
T rai nin g
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A Fresh Look at the Old World: Methods to Study European and Russian Gas Markets to 2030 By Eric Vambert and Marcos de Freitas Sugaya
P is the price or the cost per volume or energy contents, assumed constant over the lifetime of the asset (€ MWh, $/MMBtu, Nok/m3, etc). N is the life time of the asset, k is a given year from the start of the project (0) to its decommissioning (N), Vk is the corresponding volume of natural gas produced or used, “r” is the discount rate, Capexk is the capital expenditure in the year “k”, and Opexk is the operational expenditure, including taxes.
This article describes and analyses a number of
Given the fact that the discount factor “r” is
methods that can be used to study gas markets in
included in the equation, the price of equilibrium
Europe and Russia, highlighting the most suitable
“P” gives a return that pays for the cost of capital.
for each step of the gas value chain.
Over the life of the asset, the revenue will fluctuate
To study costs along the value chain, we can use
around an equilibrium point, depending on price
a method based on the levelised cost of energy
and volume, and the cost of capital and expendi
(LCOE). The wholesale market organisation is
tures may vary as well.
assessed along with the metrics of efficiency to
Refinements to this equation can be numerous; for
trigger investments, and security of supply is
instance, tax rates are high in the upstream segment
studied as a competition between several options.
and they should be taken into account either
End-user markets are debated in terms of key
independently or in the Opex. However, the simplicity
aspects such as price level, volatility, transparency,
and the fact that one can compare assets that are
taxation and stability of demand. But above all, it
very different in nature, with significant variations in
is important to assess the effectiveness of the legal
lifetime, make Equation 1 very useful and convenient.
and regulatory framework, as it may have a severe
In the end, the build-up of cost along different routes
impact on a number of steps of the gas value chain.
from production site to final user gives a good picture
This set of methods should allow us to make
of the cost for gas in the long term.
recommendations to strengthen the position of
Margin repartition fluctuates along the value
the gas industry on the Eurasian continent. One
chain, but what matters in the end is that the value
interesting outcome of the study will be the
creation from wellhead to burner tip is the highest
indicative conclusion that natural gas should be
possible. The study will therefore focus on a global
one of the preferred energies of the future in
industry approach and not margin repartition (see
Europe and Russia.
Figure 1). Nonetheless, additional factors affecting margins can be important such as:
l Cost along the value chain
l Rent for the producer;
The LCOE method, summarised in Equation 1,
l Margins in wholesale and retail markets;
yields a most reasonable evaluation of the contri
l Margins due to favourable conditions or
bution of an investment in the gas value chain.
scarcity of resources; and l Potential of loss due to reduced volumes or prices.
Equation 1.
Σ N
k=0
204
Σ
l Wholesale markets and price formation
N
P*
Vk ( 1 + r)
k
=
k=0
Capexk + Opexk ( 1 + r) k
There is no such thing as a single market in Europe. Not only are there different locations but also the organisations, the price settlement and
A F r e s h Lo o k at t h e O l d W o r l d : M e t h o d s to S t u dy E u r o p e a n a n d R u s s i a n G a s M a r k e t s to 2 0 3 0
positioning along the value chain differ greatly from place to place (see Figure 2). The long debate over which system is the best has not
BU I LD - UP OF COSTS ALON G THE G AS V ALUE CHA I N
reached and probably never will reach a conclusion.
Enduser
Costs along the value chain include Taxes Margins Cost of Sales
Long-term gas contracts have a good track record in developing the gas industry in Europe,
Costs h €/MW
whereas organised market places (namely Henry Hub) have been successful in making North America one of the biggest gas markets in the world. There is no “one size fits all” in market organisation. Often, the metrics derived from the financial
Exploration & Production
International pipeline or LNG
National Transport
Storage
Distribution
world such as transparency and liquidity do not apply well in the energy industry. Crude oil markets are a success regarding financial metrics, yet they do not always succeed in reaching low and stable prices for the end user. That is why we have to look
Figure 1.
SU I TABLE LOCAT I ON FOR M AR K ETPLACES OR LON G -TER M CONTRACT PO I NT OF DEL I V ERY
beyond the framework of wholesale market organisation and develop a pragmatic approach. What matters in the end is to find the best market organisation that benefits the whole gas
Exploration & Production
International pipeline or LNG
Storage
National Transport
Distribution
industry. A practical example for price formation on the wholesale market is given in Figure 3.
Potential location for wholesale market Over the counter (OTC) or organised
The price level does not depend entirely on the market organisation; price fluctuates between the netback value at the wholesale market point (upper value) and the incremental cost of production. Nonetheless, from time to time price can be out of this theoretical range. In the pragmatic approach developed, the cost of market organisation is analysed and its effects
Figure 2.
PR I CE FOR M AT I ON I N W HOLESALE M AR K ETS
Price
on key aspects of the gas industry computed,
el ion Futitut s b su
including security of supply, end-user price level and stability, and even the indication of triggers for appropriate and timely investments. The best wholesale market organisations are
Replacement value oriented price
Technology
in today’s environment, but will also adapt easily to changes that may happen in the future.
The first aspect of security of supply (SoS) is to provide gas, on a business as usual basis. Invest ments needed to produce and transport this gas to
Production cost oriented price
Scarcity
Oversupply
on
uti
stit
ub
ls Fue
Resource Rent
those that are not only flexible enough to perform
l Security of supply
Supply curve
Ge dis olog tan y/ ce
Economic Growth
Demand curve
Volume
Production Capacity Limit (depends on policy and resources) Note: Figure inspired by: Evolution of Gas Pricing in Continental Europe: Modernisation of Indexation Formulas versus Gas to Gas Competition, Dr Andrey A. Konoplyanik, University of Dundee, Centre for Energy, Petroleum, Mineral, Law & Policy, 2010.
Figure 3.
A F r e s h Lo o k at t h e O l d W o r l d : M e t h o d s to S t u dy E u r o p e a n a n d R u s s i a n G a s M a r k e t s to 2 0 3 0
205
customers are significant, and they should be
point of view as an additional service to provide
developed in a timely manner. Such investments
to customers.
are decided according to reasonable expectations
Therefore, one can chose a rather different
of developments in gas markets. They mirror the
methodology that relies on more stable and
security of demand in the long term. Therefore,
predictable assumptions. In Western Europe the
we think that the first aspect of SoS is to be
actual level of safety for the system is usually
addressed in the topic of end-user market
imposed by law or regulation, this is a good
analysis. A second SoS aspect concerns accidents
starting point to find the best way to provide SoS
along the gas chain (e.g. a supply disruption
on a reasonable basis.
during abnormal weather conditions).
Once the security target is settled, one can
A method to evaluate the value of SoS can be
work on the best means to ensure it. A good path
derived from electricity markets where the metrics
is to arbitrate between different sources of supply,
of lost load values are used. A value of lost load
such as additional storage, additional international
represents the cost entailed to end-users in case
pipelines, reverse flow investments, or additional
of a supply disruption. The values involved are
LNG regasification capacity1. Figure 4 presents
very high, because electricity is essential to
typical breakeven points between major alternative
many businesses and domestic consumers.
supply sources2. Gas sources will be increasingly
Applying this method to gas is not straightforward
distant because of decline of domestic production
because, in addition to the heating applications,
and neighbouring mature fields. The method
gas contributes to the SoS of electricity through
we propose takes that into account and relates
power generation. In addition, customers are
distance to economics. In addition, it takes into
not always willing to pay the real cost of what
account different types of storage. Should flexi-
they want.
bility needs change in Europe following the
It is also possible to consider demand-side management to delay or decrease the gas
evolution of customer portfolios, this could be taken into account.
consumption in the end-user market, thereby b e lo w
Figure 4.
avoiding additional investments. However,
l End-user market and security of
we would rather look at it from a marketing
demand The European gas markets have been the object
COST OF ADD I T I ONAL G AS AS A FUNCT I ON OF THE D I STANCE I N V OLV ED
of many high-level studies but forecasting gas consumption in 2030 is not an easy task. However, it is a necessary one because this is the time horizon for investments in gas
Cost for additional capacity dedicated to security of supply €/MWh or €/m3/day
infrastructure. G
ge
ran
N rL
fo
st e Co for pip ange Cost r Cost range for storage
Distance of supply (km)
A common method relies on linear optimisation to balance supply and demand relying on longterm trends. However, this type of reasoning often leads to volatile results and to huge upward 1 Cost Curves for Gas Supply Security: The Case of Bulgaria, EPRG Working Paper 1031, Cambridge Working Paper in Economics 1056, Florent Silve and Pierre Noël. 2 Methodology currently developed under the supervision of Martin Schwarzbichler, OMV.
206
A F r e s h Lo o k at t h e O l d W o r l d : M e t h o d s to S t u dy E u r o p e a n a n d R u s s i a n G a s M a r k e t s to 2 0 3 0
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PETROCHEMICA L S RENEWABLE S
N AT U R A L E L E C T R I C
G AS
COA L
P OW E R
M E TA L S
or downward revision3. Another pitfall to avoid
role of Trojan Horse to promote more value-
is to put too much importance on the actual
added services.
mood of the gas industry. Everyone remembers
A first step is to assess the maturity of the gas
the optimistic growth scenarios elaborated in
market in a given area, considering each
2007-2008, followed by a downward revision
of the market segments to find where value
of forecasts in 2008-2009. Forecasts are
can be extracted. Customer segments can be
frequently unstable, but key factors that allow
power generation, domestic, industry, natural gas
or prevent growth in gas markets are often
vehicles, natural gas as feedstock and
the same.
side products.
Therefore, another way to proceed is to
A second step, for each segment, is to identify
use or develop toolboxes to predict where
the levers. The first lever to be addressed is
the market is heading. Ideally, the method
competitiveness, followed by the legal and
proposed should work as a compass and
regulatory framework (including CO2 emissions),
map to allow the user to find the best path
societal factors and the image of natural gas,
to value in a changing environment (economic
marketing and innovation (technology, efficiency)
and legislative). It should allow break-
and additional value creation (complementarity
through thinking and not only trends
with renewables, services, etc). Competitiveness is assessed against other
reasoning. The methodology should be value oriented
energies (commodity prices) but also against
because in mature markets, where the volume
the cost of investments, which can be related to
growth can be low in some segments, one can
raw materials, mining, inflation, etc4. At the same
find new growth in value instead. Reasoning
time, for each lever and segment, the assessment
based on value broadens the scope of
of the leverage effect on value creation (related
products and services that can be proposed
to gas sales) is measured and forecasts can
to the customer. Natural gas can play the
be produced on the expectation of growth in each segment.
b e lo w
Figure 5.
3 GEM, published by Observatoire Méditerrranée de l’Energie (OME), October 2009, article “The Role of Supply-Demand Forecast in Long-term EU Natural Gas Security”.
The pursuit of new developments takes place in a changing framework of competing energies, taxes, environmental and security
G AS W I LL BE ONE o f THE FUTURE PREFERRED FOR M S OF ENER G Y I N EUROPE AND RUSS I A Security of demand New needs New value
Growth Exploration & Production
International pipeline or LNG
Storage
National Transport
Distribution
Electricity Coal Oil & Derivatives
Security of supply Industry efficiency
Regulatory and legal framework
208
factors. l Legal and regulatory framework
Customers satisfaction
Natural gas
of supply regulation, among other relevant
A need for heating, electricity, energy or feedstock in Europe and Russia
Government bodies are often concerned with the energy sector, and will not let it set its own rules. In Europe, regulation has left few steps untouched along the gas chain: most of the infrastructure is regulated, except for some international transportation or storage. At the upper end of the gas chain, gas production is 4 From analysis of the relative competitiveness of natural gas for power by Dr Marcos de Freitas Sugaya, Petrobras S.A.; study to be completed under the current PGC C work programme.
A F r e s h Lo o k at t h e O l d W o r l d : M e t h o d s to S t u dy E u r o p e a n a n d R u s s i a n G a s M a r k e t s to 2 0 3 0
less regulated but it is strongly influenced by government policies; at the lower end, regulated tariffs for final users are still widespread in Europe and the CIS. In addition to rules that directly apply to the gas industry, general environmental or energy laws have a significant influence on the industry’s development. Once again, a pragmatic approach is necessary: what are the costs and benefits of a new set of rules for the gas industry, what are the opportunities created? In a short-term perspective, it is possible to evaluate the effects of a given legal and regulatory framework on the gas industry to verify where it is heading. But a richer approach is to determine what the framework should be to ensure a smooth development of the gas industry. Putting it in the perspective of the long-term investments that the industry needs, one should propose a stable and convenient framework that would give enough room for companies to innovate and grow. l Conclusion
Gas is affordable, abundant, reliable and clean. But the industry must work hard in all steps of the gas value chain to maintain its competitiveness and equilibrium and to convince decision makers of the value of natural gas assets. The set of methods we propose have their limitations. However, they should allow us to draw a global picture of opportunities for nat ural gas in Europe and Russia, by providing reliable analysis useful to stakeholders of the gas industry. Finally, this could help to grow the positive reinforcement loop that is drawn in Figure 5. Eric Vambert of GDF SUEZ is the Leader of Study Group 3, Programme Committee C – Gas
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The Ems Gas Pipeline Tunnel – On Time and Budget
River Ems, a major shipping lane and also an
By Enno Freese
The fifth crossed the port of Emden, while the sixth
important nature reserve. Six different ways of crossing the Ems were studied. Four routes were based on a pipeline that went through the estuary. was based on a ring around the city.
On October 1, 2010, the first gas flowed through
The decision was eventually taken to cross the
a new pipeline under the River Ems in northern
Ems itself. Two of the three alternatives were
Germany, marking the completion of phase one of
quickly rejected since they involved a combination
N.V. Nederlandse Gasunie’s North-South
of open excavations and direct drillings, and the
expansion project to expand import capacity.
construction work would have had too great an
Gasunie is responsible for the transport of gas
impact on shipping, and on the ecosystem in
in the Netherlands and northern Germany, and
particular. Gasunie therefore decided to build a
operates a high-pressure pipeline network of
tunnel for the gas pipeline under the Ems, running
15,000 kilometres. Under the North-South
between the north German town of Rysum and the
expansion project, 500 kilometres of new pipeline
Dutch village of Borgsweer. At this point the Ems is
are being built to connect the landfall site for
almost four kilometres wide.
pipelines bringing gas from Norway, which is near the north German town of Emden, with the
l International group of contractors
Netherlands. In phase one a difficult obstacle had
Gasunie awarded this complex construction project
to be hurdled: Emden lies at the mouth of the
to BAM Combinatie Eemstunnel, a team consisting of the Dutch BAM Civiel and the German Wayss & Freytag Ingenieurbau. These companies contracted Smet Tunnelling from Belgium to build the boring machine. The different types of soil in the ground under the Ems were first mapped. This determined the choice of drill head and cutting wheel. It was expected that there would be mainly sand and clay under the Ems, but the possibility of encountering erratic boulders and peat could not be ruled out. It was reckoned that a tunnel with a cross-section of 2.5 metres would be sufficient to accommodate a gas pipeline with a diameter of 1.22 metres, but this was thought likely to create logistical problems. The difficulty of transporting tunnel elements to the front and the problems involved with utilities and the disposal of bored slurry could, it was felt, pose too great a logistical challenge in this rather narrow space. A tunnel diameter of 3 metres was therefore eventually chosen. The boring machine arrived in sections at the construction site in Rysum at the end of December 2008. In January 2009 it was assembled, named
The cutting head of the tunnel borer.
210
T h e
Em s
G a s
Pi p e l i n e
Tu n nel
–
O n
Tim e
and
Bud g et
and blessed according to tradition. No tunnel-
rim ensures a watertight seal between the elements.
builder will start work until the borer has been
In total, about 20,000 concrete segments were
blessed and a statue of St Barbara, the patron
needed for the construction of the tunnel.
saint of building, has been placed at the entrance of the tunnel mouth. In spring 2009, the borer set
l Safety
out on its four-kilometre journey.
Working in a long, narrow tunnel meant working
The whole machine was more than 80 metres
with risks. Fire and smoke constituted a particular
long and was made up of the tunnel borer itself
threat to workers. That is why the safety require
and seven trailers. Behind the cutting head lay the
ments were extremely high. Gasunie abides by
motor and an airtight, sealable chamber where
existing regulations, anticipates new ones, and
the excavation team could shelter in the event of
even goes beyond them. The entire tunnel borer
an emergency. There were also compartments for
was therefore fitted with a sprinkler system. At the
pumps and installations for electricity and air
front end of the borer was an airlock compartment
facilities. Concrete segments with which the tunnel
which was designed as a rescue chamber so that
was lined were delivered at the rear. These
in the event of fire, workers could take shelter
segments were custom-made.
there for up to 12 hours while they waited for
The concrete tunnel segments are reinforced with
help. A special fire fighting engine that could go
steel fibres which prevent splintering of the concrete;
into the tunnel and extinguish any fire was also
this is particularly important at the edges. Six seg
designed for this construction project. The fire
ments form a tunnel ring with an internal diameter of
service at Emden was trained to operate this
3 metres. A tunnel ring is 1.2 metres long. A rubber
equipment. A personnel gate registered who
During construction small trains were used to transport employees and materials.
Th e
Em s
G as
Pi p e l i n e
Tunnel
–
On
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and
Bud g et
211
Sections of pipeline await assembly in a string yard near Rysum.
entered and left the tunnel. Each employee had
l  Laying the pipeline
his own emergency breathing equipment with 30
Drilling a tunnel is one thing: the next challenge
minutes of fresh oxygen. In the tunnel, extra
was to lay a pipeline in it. The decision was taken
breathing equipment was located every 800
to lay the pipeline in a way that had never been
metres to enable employees to walk to the tunnel
done before on this scale. For this method to
exit in the event of smoke formation.
work, the tunnel first had to be filled with water so
The tunnel borer covered a distance of about
that the gas transport pipeline could be driven in.
17 metres a day with work going on around the
Before that, the tunnel was cleared of all the
clock in shifts. Small trains travelled back and
equipment relating to the tunnel borer and the
forth transporting employees and construction
final elements to be removed were the rails for the
materials to the tunnel borer. Initially, one train
trains. While this was being done, a layer of
was laid on to provide the excavation team with
gravel was deposited on the tunnel floor. Wooden
the necessary equipment in good time, but after
portals were also installed every 100 metres to
four months of continuous drilling, by which time
prevent the pipeline from being torn by the
the tunnel borer had reached exactly halfway, a
concrete walls of the tunnel during insertion; this
section of passing track was laid and a second
would have damaged the coating. Tests showed
train was brought in. Sixteen metres below the bed
that the gravel bed did not harm the coating of
of the Ems, the two trains passed each other with
the pipeline. The laying of gravel and the insertion
only 5 centimetres to spare. The tunnel is so deep
of the wooden portals took nearly four weeks.
that the navigation channel can still be dredged
212
Four pipe strings of gas pipeline with a total
deeper in the future. In November 2009, after
length of one kilometre lay waiting at a string yard
nine months of continuous drilling, the tunnel
near Rysum. Although it had a combined weight
borer had reached exactly the right place at the
of 2,850 tonnes, the pipeline floated on water
construction site in Borgsweer on the Dutch side.
when sealed at both ends. One possible danger,
After that it was dismantled and removed in sections.
however, was that it could have risen too high and
T h e
and
Em s
G a s
Pi p e l i n e
Tu n nel
–
O n
Tim e
Bud g et
pushed away the wooden portals. It could then
to expand and contract in response to changes in
have grated along the concrete tunnel wall. It was
pressure and temperature.
therefore decided to completely flood the tunnel
Once this operation had been completed and the
and to insert a ballast pipeline in the gas pipeline
pipeline was successfully anchored, the construction
which would move sufficiently to push the gas
sites on both sides of the Ems were dismantled
pipeline gently down on the gravel bed. Due to
and the land was restored to its original state.
the length of the pipeline, it was flexible enough to
Valve installations at Rysum and Borgsweer are
easily follow the contour of the tunnel. The tunnel
now the only remaining clue testifying to the fact
subsequently took 10 days to fill with water. The
that Gasunie has laid a natural gas pipeline under
question now was whether the theory would work
the Ems. After two years of preparation and a
in practice.
further two years of construction, the gas pipeline
A 750-tonne pipe-thruster was now brought in to push the pipeline down the tunnel. On March
was inaugurated on October 1, 2010. This unique construction was successfully
15, 2010, the first kilometre of gas pipeline slid
completed without disrupting or disturbing nature
slowly into the tunnel at a rate of about 20 metres
or shipping, and on time and budget. Phase two
per hour. The operation was tense, but at the end
of the North-South expansion project is due for
of the day the team gradually sensed that their
completion later this year.
carefully calculated theory was working in practice. The pipe-thruster only needed to exert a force of
Enno Freese is Director of the North-South Expansion
60 tonnes to push the pipeline into the tunnel.
Project, N.V. Nederlandse Gasunie, and the Leader
After a few hundred metres, there was an overÂ
of Study Group 1, Working Committee 3.
whelming feeling of relief that the selected working method appeared to be a success. After nearly a kilometre of pipeline had been pushed into the tunnel, the next kilometre was welded to the first string of gas pipeline and the process was repeated. After two weeks, the gas pipeline reached the receiving trench in Borgsweer on the Dutch side. The ballast pipeline was removed and the pipeline coating was tested. The tests showed that the pipeline had reached the Dutch side completely intact. The pipeline was duly connected to the land-based pipeline and pressurised with water. One more challenging task remained. The pipeline had to be firmly anchored on the gravel bed in the tunnel. A cement-bentonite installation was therefore built at both Rysum and Borgsweer. With the help of pipelines attached to the ceiling of the tunnel, the tunnel was filled from the centre outwards with a mixture of cement and bentonite. The liquid mixture ensured that no air pockets developed in the filler. At the same time, once hardened, this elastic clay allows the steel pipeline
Th e
Em s
G as
A 750-tonne pipe-thruster pushed the pipeline into the tunnel.
Pi p e l i n e
Tunnel
–
On
Tim e
and
Bud g et
213
A wealth of experience Tebodin’s services to the oil and gas sector A household name in the oil and gas sector, Tebodin has decades of experience upstream, midstream and downstream – everywhere where oil and gas are being produced and transported by the most reputable companies. We understand the importance of safety, reliability and cost efficiency and are able to support our clients’ constant drive for continuous improvement. Our services encompass the full range from consul tancy, design & engineering, procurement, construction management, commissioning management and start-up assistance and project manage-ment, both on- and offshore. On all of our projects we maintain rigorous standards for safety, quality, health and care for the environment. Service around the globe The oil and gas sector is one of Tebodin’s main markets: on average 40% of our global revenue comes from this sector. Our global presence extends to around 50 offices, which allows us to offer local and international clients the best of both worlds: international engineering and consultancy expertise combined with local knowledge. In addition to the oil and gas sector, our 3,000 dedicated professionals offer their knowledge and experience to clients in markets as varied as energy and the environment, chemicals, the manufacturing industry, health and nutrition, infrastructure and property. Delivering solutions Established in the Netherlands, Tebodin is an independent, multidisciplinary consultancy and engineering firm with a worldwide office network. In 2010 we celebrated our company’s 65th anniversary – in good health and firmly intending to continue our mission: to be one of the world’s finest engineering and consulting firms by delivering smart and sustainable solutions that empower our clients and enrich our communities.
v A selection of our various projects Integrated services framework contract with NAM NAM is the largest producer of natural gas in the Netherlands. Its onshore projects have been covered in a contract between NAM and LOP (Land Onshore Projects) since 2002. LOP is a joint venture between Tebodin, A. Hak and Cofely. The contract comprises the services for engineering, procurement, commissioning and project management. In 2010, the contract was renewed for another 2.5 years. Assess study Abu Dhabi As Abu Dhabi is preparing for the future, a master plan is being developed for the country’s overall offshore power infrastructure, including ZADCO and ADGAS operational areas. ADMA-OPCO (Abu Dhabi Marine Operating Company) awarded the assess study for this master plan to Tebodin Middle East. The project is the first of its kind ever awarded in the region and will be conducted in a strategic alliance with ABB Norway. EMC for Oman North Territory PDO awarded the large Engineering and Maintenance Contract (EMC) for Oman North Territory to the STSTebodin joint venture. The seven-year contract encom passes various small to medium size oil and gas projects in the North PDO concession area of Oman. The work includes all on-plot engineering, procurement services, construction and commissioning besides management services and maintenance support of all new projects and all upgrades or changes to existing projects. Nitrogen storage Gasunie, the Dutch-based gas infrastructure company, has started producing and storing gaseous nitrogen in an existing salt cavern. When extracted from the cavern, the nitrogen is mixed with high calorific gas to form ‘Groningen’-quality gas for Gasunie’s clients in the Netherlands. A joint venture of Tebodin and Fabricom is responsible for the engineering, procurement and execution of a significant portion of the project.
For further information about Tebodin, please visit www.tebodin.com or contact us at info@tebodin.com.
Part of Royal BAM Group
Tebodin always close People are the basis for our success: clients, employees, partners and stakeholders. And many other people whose lives we want to improve through our work. That is what makes us a people’s business. Close to the markets, in which our clients operate and close to their projects, in which we are personally involved. Worldwide, local Tebodin. Always close. Find out what we can do for you: www.tebodin.com
Gate Terminal BV, and will play a key role in the
Expanding Northern Europe’s LNG Import Capacity
development of the Port of Rotterdam as an LNG hub for Europe. The waterfront facilities can handle LNG carriers ranging from the larger end of the current
For this issue PGC D has contributed an article
Mediterranean fleet to the Q-max class. There are
on the new LNG import terminal in Rotterdam
two jetties, each equipped with four 20” unloading
and an update on expansion at the UK’s largest
arms, and the unloading capacity ranges from
import terminal.
12,500 m3/hour for a single carrier to a maximum of 15,000 m3/hour for simultaneous unloading of
l The Gate Terminal
two carriers.
By Sander Lemmers
The marine facilities are supplied with stand
Gate (Gas Access to Europe) on the Maasvlakte of
alone PLC-based unloading arm process control
the Port of Rotterdam will be the Netherlands’ first
systems, which have been fully integrated into the
large-scale LNG receiving and regasification
overall process automation system. Additional
terminal. It is expected to be operational by the
systems are provided for all ship mooring, berth
third quarter of 2011 on time and budget.
ing and jetty operations. All these operations can
The initial capacity is 12 bcm/year (8.9 mtpa)
be monitored from the central control room or
+ 20% swing with three 180,000 m3 full contain
from the jetty monitoring buildings.
ment storage tanks, but is likely to be increased to
A dedicated channel for LNG carriers will
16 bcm/year (11.8 mpta) + 20% swing, including
ensure a rapid turnaround time and minimise
a fourth storage tank. Gate has been developed
demurrage, port costs and safety risks. The depth
by NV Nederlandse Gasunie and Koninklijke
of the channel has been dredged to only 15
Vopak NV through their joint venture company
metres to deny access to very large crude oil carriers and thus safeguard against collisions. Extensive marine studies have been performed to optimise the approach, turning and mooring of LNG carriers. Gate has made the most of what is a tradi tional Dutch activity: land reclamation. A swap of land and water has taken place in that the LNG storage tanks are built where there was once water and the jetties are now where there was once land. This land reclamation programme has been performed by and in cooperation with the Port of Rotterdam Authority, and fits in the overall masterplan for the Maasvlakte II port extension, currently under construction. The LNG storage tanks are constructed with a shallow ringbeam type of foundation on top of compacted soil. The soil compaction was per formed in several stages. First a 15-metre high preload was put in place for six months to com
An aerial view of the Gate site.
216
Ex p a n d i n g
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pact the underlying clay layers. Secondly the loose soil was further compacted using a technique called vibrocompaction down to a depth of 40 metres as well as pneumatic hammering (dynamic compaction) for the top few metres. As the LNG storage tanks have been constructed only 25 metres away from the water’s edge, an extensive design programme was instigated to allow construction of a heavily reinforced waterfront protection. The initial three LNG tanks are above-ground, full containment 9% Ni storage tanks with concrete outer shells. Each tank will have a net working capacity of 180,000 m3 and three fully equipped low-pressure pump wells. Building a fourth storage tank would bring the total storage volume to
Gate’s waterfront and LNG unloading arms.
720,000 m3. The design guarantees that the normal process design boil-off gas (BOG) from
Any combination of LP and HP pump can be
the storage tank is less than 0.065 volume per
used during Gate terminal operations. The HP
cent per day based on pure methane. Internal
LNG system feeds a series of open rack vaporisers
tank piping enables bottom or top filling to
(ORVs) which will be floating on the natural gas
minimise the risk of stratification and potential
pipeline pressure. The natural gas is delivered to the Dutch
subsequent rollover.
natural gas grid operated by Gas Transport
The tanks are equipped with instrumentation providing real-time process parameters monitoring
Services (GTS), according to contractual
and input to tank safety systems. Besides managing the inventory of the stored LNG, there is extensive instrumentation for the monitoring of potential LNG product stratification, cold spots on the LNG storage tank walls and other tank safety integrity parameters. During the holding and unloading modes of operation, BOG from the LNG storage tanks is compressed into the BOG re-condenser for re-condensation and re-introduction into the LNG send-out stream. The LNG is pumped from the storage tanks by the low-pressure (LP) pumps into a LP LNG distribution system which will maintain process lines in a permanent cryogenic condition, whilst also feeding the BOG re-condenser and high-pressure (HP) pumps. A series of canned pumps increases the LNG pressure to the natural gas grid pipeline pressure.
Ex p a n d i n g
Land reclamation in the Port of Rotterdam.
Northern
Europe’s
LN G
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C apaci ty
217
North Sea temperatures are around 3ºC and with the addition of the power plant heat, the lower end of acceptable ORV design temperatures is achieved. Using the waste heat from the power plant reduces the thermal impact of these facilities to the surface water temperature. Thereby the Gate terminal contributes significantly to a thermally balanced harbour. Indeed, it is the terminal at the highest latitude on the planet to use this LNG vaporisation technology which is normally used exclusively in warm water regions. The conventional LNG receiving and Construction of the seawater intake and pumps at the power plant cooling water outfall.
re-gasification terminal operates in two main
specifications and battery limit conditions. The
operation and the holding mode of operation.
send-out pressure is between 65 barg and 79.9
Send-out takes place in both operational modes
barg and the natural gas temperature needs to
at varying rates.
operational modes, the unloading mode of
be between 0°C and 40°C. Gate can process
In addition to these operational modes the
the most common LNG qualities produced since
Gate LNG terminal can unload two LNG carriers
agreements for nitrogen blending are in place
at the same time in the so-called simultaneous
with GTS.
unloading mode, and can reduce its send-out
The terminal has been designed to deliver a
under conventional minimum send-out rates
minimum send-out temperature of 2°C for a
via the minimum send-out (MSO) mode
10°C seawater inlet temperature to the ORVs.
of operation.
The master metering and custody transfer
For the latter operational mode a high-
system is based on an ultrasonic flow metering
pressure BOG compressor will be installed.
system, using flow computers, a data acquisition
Minimum send-out solutions using HP BOG
system and data processing and storing facilities
compressions systems are generally more cost
with a fully redundant high-data integrity,
effective from a capital and operational
security and safety system.
expenditure point of view than BOG
Gate terminal uses the waste heat of nearby
re-liquefaction based solutions. To spike the BOG,
power plants for its LNG vaporisation process.
when the heating values fall below the minimum
Glass reinforced polyester (GRP) warm water
natural gas specification, in the MSO mode of
lines with an internal diameter of 1.8 metres
operation a small HP blending pump will be
and a concrete sub-harbour tunnel with internal
installed as well.
diameter of 2.2 metres will supply as much as
from one operational mode to the other is based
year + 20% swing.
on fully automated sequences. In addition
The power plants heat up North Sea water
218
Any routine operation as well as changing
60,000 m3/hour for the vaporisation of 16 bcm/
automated sequences are used for start and stops
by approximately 7ºC and the Gate terminal
of rotating equipment, proposed LNG terminal
will take out the equivalent in heat. Minimum
equipment line-up and draining operations.
Ex p a n d i n g
N o r t h e r n
E u r ope’s
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Future developments
l Grain LNG
There are plans to break bulk LNG in the Port
By Peter Boreham
of Rotterdam and back-load into smaller LNG
National Grid Grain LNG has transformed a
carriers (7,500 m to 25,000 m ) to supply
brownfield site on the Isle of Grain peninsular in
remote areas where pipeline gas has no access.
north Kent into a $1.58 billion LNG installation.
It is also intended to introduce LNG as fuel for
With the capacity to supply 20% of the UK’s gas,
shipping in Rotterdam harbour and its
it helps meet the country’s strategic need for a
hinterland. LNG bunkering facilities from shore
more diverse energy mix.
3
3
to bunker barges and subsequent side-by-side
The first LNG shipments to the UK began in
transfer of LNG to the end-user will need to
1959 with trial importation from Louisiana in the
be developed.
USA on the Methane Pioneer to Canvey Island, the
To use additional storage capacity at the
first LNG import terminal in the world. The success
nearby Gasunie peak shaver facility feasibility
of this venture led to large-scale trade from
studies are being done to connect the Gate
Algeria to Canvey Island in the 1960s and con
terminal with this facility via a sub-harbour
tinued to the 1990s, when increased production
cryogenic pipeline using Pipe in Pipe in Pipe
of North Sea Gas reduced the UK’s need for
(PiPiP) technology and 36% Ni Invar material.
LNG imports.
LNG can be used as an automotive fuel as
The subsequent decline of North Sea
well and LNG truck-loading and trucking is
production led to the redevelopment of a site on
another form of LNG distribution that will be
the Isle of Grain, where a peak shave plant had
developed in the Port of Rotterdam.
been built in the early 1980s, for LNG impor
The projected start-up date of the Gate
tation. The site benefits from deep-water access
terminal is the third quarter of this year. By the
on the River Medway, connections to the UK’s
end of 2010 all engineering activities had been
high-pressure gas network and is located near
finished and as-built documentation is now being
to the centre of demand. Grain LNG was
prepared. Procurement activities are nearly
commissioned in 2005, and was expanded in
complete and construction activities are focusing
2008 and 2010.
on energising systems, hydro testing the tanks,
Following inauguration of the latest expansion
completing jetty construction works, pressure
project on December 1, 2010, Grain LNG’s
testing, development of the turnover packages,
capacity is now 20 bcm/year (14.8 mtpa). The
and insulation works for both piping and tanks.
project added a second jetty and a further
The total project construction remains firmly on
200,000 m3 storage tank, and was completed on
schedule and within budget.
time and budget.
The operational team has been formed and
In an innovative approach, the majority of the
the operators are involved in the pre-
processing plant was assembled offsite, at the
commissioning and commissioning activities and
Fabricom facilities in Immingham in the north-east
the development of operation manuals. The
of the UK, in a secure non-weather dependent
project team is making the shift from construction
environment. This allowed preparatory work to
to pre-commissioning, commissioning, testing,
progress at Grain in the meantime and secured
start-up and operations.
sufficient resources at a time of increased compe tition for skilled labour due to major construction
Sander Lemmers of Vopak LNG is the Secretary of
activity, such as the 2012 Olympic Games, in the
Study Group 1, Programme Committee D – LNG.
south-east of England.
Ex p a n d i n g
Northern
Europe’s
LN G
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219
The Fabricom site had direct dock access and
surplus heat from E.ON’s neighbouring gas-
the modules were transported to London Thames
fired power station. Excess hot water from power
port, located just over a kilometre from Grain
generation is piped from the power station at
LNG, for installation. The units arrived at site
approximately 42.5ºC and returned after use by
painted, insulated and pre-tested so the defect
the vaporisers at 15º C. Using the surplus heat
rate on full testing was lower. As the pumps and
in this way will reduce Grain LNG’s fuel gas
pipework columns were built as preassembled
usage and carbon emissions by up to 169 mcm
units and lifted into place, there were safety gains
and 300,000 tonnes a year.
by reducing working at heights and manual lifting. The plant now includes eight LNG storage
The success of Grain LNG is underpinned by long-term contracts. Original customers
tanks (four of 50,000 m3 and four of 200,000 m3),
BP and Sonatrach were joined at the first
14 submerged combustion vaporisers, 12
expansion by Centrica and GDF SUEZ,
compressors and three recondensers. As well as
together with additional capacity for Sonatrach.
two high-pressure connections, the process plant
The second expansion has provided capacity
utilises the original gas connection provided to the
for new customers E.ON Ruhrgas and
peak shave plant with the ability to economically
Iberdrola, together with additional capacity
export BOG directly to the distribution network at
for Centrica.
2 and 38 bar. This ability allows Grain’s customers
The terminal continues with its appetite for
to fully benefit from the dynamic nature of the
growth and additional capacity could be
UK’s commercial gas environment with rapid
available from as early as winter 2015/16.
renomination capacity. Moreover, Grain LNG has demonstrated its commitment to climate change with a deal to use
Peter Boreham, National Grid UK LNG Director, is a member of PGC D’s Study Group 1.
Arctic Princess delivered the commissioning cargo for Grain LNG’s second jetty on October 29, 2010. Commercial operations started on December 1.
220
Ex p a n d i n g
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E u r ope’s
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We complete your project
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GIIGNL’s Information Papers on the Safety and Security of LNG
and manage safety risks. Misunderstanding is not uncommon and is often caused by confusion or incomplete or inaccurate information about LNG pro perties. One also must clearly distinguish its proper ties as a liquid from its properties as a gas or vapour. LNG takes up about 1/600th the volume of
By Tony Acton
natural gas and its boiling point is -162°C, which is considered a cryogenic temperature. At this
The International Group of Liquefied Natural Gas
temperature (somewhat depending upon its actual
Importers (GIIGNL) has prepared a comprehensive
composition), LNG evaporates to convert from a
set of information papers on LNG properties, its
liquid to a vapour. Conversely, natural gas
transportation, storage and re-liquefaction and the
becomes a liquid at these cryogenic temperatures
safety and security of operations.
at atmospheric pressure.
The information papers were developed during
While natural gas is flammable, LNG is not.
2009 by the independent company SEA Consult
The flammability limits of methane are such that
ing of the US, guided by the GIIGNL Technical
any small leak of LNG vapour from a tank in a
Study Group and with technical information and
well-ventilated area is likely to rapidly mix with air
support from the safety experts and classification
and quickly dissipate. Leaks and spills are largely
society, Bureau Veritas of France. The papers are
precluded by a plethora of leak-detection systems
intended to increase understanding of the tech
and similar safeguards.
nical and safety aspects of LNG production, l The LNG process chain
transport and re-gasification. As a service to the LNG industry, GIIGNL has
The LNG process chain includes the extraction of
decided to make the information papers available
natural gas, its processing, liquefaction, transport,
generally. They can be found on the GIIGNL
storage, re-gasification and distribution to
website (www.giignl.org) from which they may be
consumers (see Figure 1).
downloaded and printed without restriction. There
Extraction of natural gas from commercially-
are seven papers in all, selected extracts from
viable, drilled wells produces feed gas which
which follow.
needs to be processed to commercial quality. This involves cleaning it by separating and removing
l Basic properties of LNG
various extraneous compounds, including CO2 and
First, and most importantly, one must understand
water. Liquefaction of the natural gas is achieved
that the very properties which make LNG a good
by refrigeration down to approximately -162°C.
source of energy can also make it hazardous if not
in specially-designed, double-hulled ships, or over
nately methane (about 80%-99%), its composition
shorter distances by specialised, double-skinned
also includes small amounts of other hydrocarbons.
tank trucks. LNG is loaded into and unloaded
The specific chemical composition of natural gas is
from LNG ships and transferred via cryogenic
a function of the gas source and type of process
articulated arms (“hard-arms”).
ing. The chemical composition of the natural gas
222
Transport of LNG over long distances is by sea
adequately contained. While LNG is predomi
Safety systems are designed into every single step
and the properties of its hydrocarbon components
of the chain. Examples include, during the unloading
determine how LNG behaves, affect our predictions
process, the powered emergency release coupler
about its behaviours, and influence how we assess
(PERC), which safely disconnects the ship’s manifold
G I I G NL ’ s
I n f o rmat i o n
Pa pers
on
the
Safety
and
Secur i ty
of
LN G
THE LN G PROCESS CHA I N
left
Figure 1.
connection and the terminal’s hard-arms in
tanks (membrane design). A typical modern LNG
emergency situations, and an emergency shutdown
carrier is approximately 300 metres long, 43
device (ESD), which immediately terminates the
metres wide and has a draft of 12 metres. Cargo
loading process with no leakage. These activate
capacities can be up to some 270,000 m3
either automatically when vessel movement occurs
although most are in the range from 125,000 to
outside the normal operating range, or manually.
170,000 m3. Sailing speeds approach 21 knots.
Re-gasification of the LNG is accomplished by
Smaller LNG ships (1,100-7,500 m3 capacity) also operate in some coastal areas.
using one of a number of kinds of vaporisers. After re-gasification, the natural gas is metered
All LNG carriers have double hulls. The cargo
and sent out for delivery to the end-consumers by
is carried near atmospheric pressure in specially
pipeline. Odours are added in the pipeline system.
insulated tanks, referred to as the cargo contain ment system, inside the inner hull. International
l LNG ships
codes govern the design and construction of
The majority of LNG ships sailing today have been
gas carriers.
designed to carry LNG either in spherical tanks (Moss sphere design) or in geometric membrane
The technology may also be utilised to function as floating storage and re-gasification units (FSRU)
The majority of LNG ships have been designed to carry LNG either in Moss (above
G I I G NL ’ s
I n f o rmat i o n
Pa pers
on
left )
the
or membrane (above
Safety
and
right )
tanks.
Secur i ty
of
LN G
223
in offshore receiving terminals. Floating facilities
the IGC committees and USCG. Each country with
allow LNG terminals to be sited offshore.
an LNG presence tends to have one or more
The LNG shipping industry has an excellent safety record. Since the first cargoes of LNG were shipped on a regular commercial basis in 1964,
governmental agencies monitoring, in varying fashion, their own LNG sector. An extensive network of international work
over 56,000 shipments have been made without a
groups and associations includes, among other
single incident of LNG being lost through a breach
entities, TC67 Work Group 10 (which addresses
or failure of the ship’s tanks.
LNG equipment and installation standards); the
Classification societies maintain standards for
European Committee for Standardisation (CEN),
design and construction and conduct surveys while
which has addressed or is addressing, among
under construction and throughout a ship’s service
other things, the control of major accident hazards,
life. Insurance underwriters require that ships are
equipment / installation design for onshore instal
“in class”; without insurance the ships cannot trade.
lations, and tank design and manufacture; and
LNG ships must comply with all relevant local and
the American Petroleum Institute (API), which
international regulatory requirements, including but
maintains some 500 standards covering LNG and
not limited to those of the International Maritime
all other segments of the oil and gas industry.
Organisation (IMO), International Gas Carrier Code (IGC) committees and US Coast Guard (USCG). Marine quality assurance for LNG carriers is
International gas industry associations codify and disseminate LNG information and safeguards, including best practices. GIIGNL has 66 member
provided through the process of vetting, which
companies in 20 different countries and focuses
assesses ship quality against a known standard to
on import terminal operations. The Society of
determine its acceptance for use. Vetting is con
International Gas Tanker and Terminal Operators
ducted by shipping companies using employees or
(SIGTTO) has over 100 members and represents
independent contractors on their own ships as well
the operators of LNG and LPG tankers and lique
as chartered ships.
fied gas marine loading or receiving terminals. SIGTTO’s focus is on shipping and its interface
l Managing LNG risks – operational
with marine terminal operations. IGU has 109
integrity, regulations, codes and industry
members and spans the entire spectrum of the gas
organisations
industry around the world. The Center for
The safe processing, storage and transportation of
Liquefied Natural Gas (CLNG) is a broad asso
LNG is an essential condition for the continued
ciation of LNG producers, shippers, terminal
existence, growth and sustenance of the entire
operators and developers in the US, as well as
industry. Companies within the industry, govern
energy trade associations and natural gas con
mental bodies and professional trade associations
sumers. Its purpose is to advance the exchange of
are all committed to the continued issuance of
educational and technical LNG information.
codes, guidance, regulations and standards
Ship classification societies review various
intended to assure the safe operation of onshore
aspects of ship quality, including mechanical fit
and offshore LNG facilities, personnel and ships.
ness, security and safety of cargo capacity and
There are a number of international authorities
224
structural integrity, as well as the professional
which are instrumental to the creation, main
competence and training of the crew. The ship
tenance and dissemination of the diverse data
classification process has long influenced the
base, broadly defined, of LNG knowledge.
design, construction and maintenance of ship
Included most prominently among them are IMO,
structures and related engineering systems.
G I I G NL ’ s
I n f o rmat i o n
Pa pers
on
the
Safety
and
Secur i ty
of
LN G
By the end of 2010 Qatar will have the world’s largest Liquefied Natural Gas combined production capacity of 77 million tonnes per annum. This is enough energy produced to meet the world’s entire natural gas needs for 13 days. Qatar supplies all four corners of the world and has a significant and positive impact on world energy use.
technologies, including alarms, emergency plans
A primary safety requirement for the industry is to
and shutdown valves, fireproofing / fire-resistant
contain LNG. Modern LNG storage tanks at
barriers and coatings, flame detectors, gauging
liquefaction facilities and import terminals typically
devices, pressure controllers, relief valves, smoke
have a capacity of 100,000-200,000 m3. A typical
detectors and temperature sensors. Most safety
LNG terminal has two to four such tanks, although
devices are remotely monitored, e.g., in a control
a small number of facilities have 10 or more.
room, to provide a safe and secure way to manage the facility.
LNG tanks have more than one means of containment. The first layer of containment is provided by the tank which holds the LNG (see
l Managing LNG risks – industry
Figure 2). All LNG storage tanks are constructed
safeguard systems
with thermal insulation to limit heat transfer,
Industry safeguard systems are designed to imme
reduce evaporation, and protect the structure from
diately detect, control and mitigate the consequences
cryogenic temperatures which could damage the
of any LNG release at an LNG facility.
structural integrity of the tank. Secondary contain
There are two types of safety features in an
ment is provided either by the use of dikes, berms
LNG facility: equipment / technology systems and
and impoundment dams around storage tanks, or
management systems. The former include multiple
by building a second tank around the primary
levels of hazard detection, mitigation and inter
storage tank to contain the LNG in the unlikely
vention systems. The intervention systems may be
event of a failure in the primary tank.
active, requiring an operator to act, or passive, requiring no operator interaction. The latter type,
Various kinds of tanks are used around the world, including single containment tanks, double
management systems, include, among other
containment tanks, full containment tanks, mem
things, studies during the design process which
brane tanks and in-ground tanks.
first identify the hazards and then review the design to incorporate steps which eliminate or
Liquid and gas/vapour leak detection and b e lo w
Figure 2.
I
l Managing LNG risks – containment
response systems associated with LNG storage
control / mitigate the hazards. They also include,
incorporate a wide array of relevant devices and
for example, the drafting, refinement and
implementation / dissemination of sound operating procedures
A M ODERN LN G STORA G E TAN K DES I G N
and safe working practices. Typical layers of protection implemented in modern LNG terminals are illustrated in Figure 3 (over). These layers begin, in a sense, with the siting and design of the terminal. The next layer reflects the control and monitoring features (includ ing, for example, detectors and trained operators). Prevention components include alarms, shut-down valves, etc. Protection is provided by elements such as
226
G I I G NL ’ s
I n f o rmat i o n
Pa pers
on
the
Safety
and
Secur i ty
of
LN G
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While the LNG industry has been in worldwide
LAYERS OF PROTECT I ON
existence for well over 60 years, there have been relatively few accidents, incidents, injuries or
Community Emergency Response
deaths in any facet of the entire industry, despite
(emergency broadcasting)
the presence of ships and trucks travelling the
Plant Emergency Response
oceans, seas and roadways of the planet. No
(emergency response procedures)
injuries to the public have occurred since LNG trading first became commercially viable some
Protection
(impounding areas, fire extinction system...)
60 years ago. Like other members of this energy family, the
Prevention
safety hazards and risks of LNG can be effectively
(alarms and shut down valves…)
and efficiently managed through the multiple layers of codes, standards, best practices, measures and con
Control and Monitoring
tingency planning applied throughout the industry.
(detectors, trained operators...)
l GIIGNL
Siting and Design
GIIGNL is a non-profit organisation founded in 1971 that studies and promotes the development of activities related to LNG, in particular pur chasing, processing, importing, transporting, handling, re-gasification and various uses of LNG.
right
To this purpose, the Group aims to provide its
Figure 3.
members with an overview of the state-of-the-art impounding areas and fire extinction systems.
technology in the LNG industry and of its general
Company management of the incident is provided
economic state. GIIGNL promotes the exchange of
by implementing the plant emergency response
information and experience among its members to
procedures. In addition, community emergency
enhance the safety, reliability and efficiency of
response begins with notification about an inci
LNG import activities and of the operation of LNG
dent, which activates governmental oversight,
import terminals in particular. The Group has a
mobilises additional response resources to
worldwide focus and its membership is composed
reinforce the facility’s response, and thereby
of nearly all companies in the world active in the
protects the public and adjacent properties.
import, terminalling and re-gasification of LNG. In order to improve its service to the LNG
l Questions and answers
industry, GIIGNL would greatly appreciate feed
Some 50 commonly-asked questions and answers
back from users of its website in general and the
are provided in this final information paper org
LNG information papers in particular. Please
anised around general topics related to LNG
provide any comments to the Central Office (see
import terminals and the transportation modes
www.giignl.org for the contact details).
which interface with them. These include LNG
228
production, shipping and re-gasification, LNG
Dr Tony Acton was, for many years until 2010, the
properties, safety features and procedures, stan
Chairman of GIIGNL’s Technical Study Group and
dards and regulations, hazards, incidents and the
is now Principal of ActOn LNG Consulting
benefits of LNG trade.
(drtonyacton@btinternet.com).
G I I G NL ’ s
I n f o rmat i o n
Pa pers
on
the
Safety
and
Secur i ty
of
LN G
GTI Progresses on Technology, Education and Conference Programs Gas Technology Institute (GTI) of the USA is an Organisation Affiliated with IGU and is furthering gas research, technology development, training and deployment across an array of gas-focused topics. The company is based in Des Plaines, Illinois (near Chicago), on a campus which includes the head quarters building, modern laboratory and research facilities, offices, training facilities, and an extensive library. Specialised laboratory facilities are used for the development and testing of advanced energy technologies from gas supply to utilisation. GTI seeks to solve important energy challenges and create value by turning raw technology into practical solutions related to the overall industry value chain. Key objectives are: v Expanding the supply of affordable energy; v Ensuring a safe and reliable energy delivery IGU ad 148x210mm 2-11_IGU ad 148x210mm infrastructure; and 2-11 2/7/11 3:49 PM Page 1 v Promoting the efficient use of energy resources.
Selected initiatives currently include: v Biogas technology development and the use of renewable resources with natural gas; v Pipeline integrity and risk management; v Expansion of natural gas and alternative fuels for transportation; and v Training the next generation workforce. IGU and GTI have a history of cooperation in organising the IGRC and LNG conferences. Following a successful 2010 event in Amsterdam, IGU will also co-sponsor the conference, Global Unconventional Gas 2011: Unlocking your Potential (GUG2011). This international confer ence will share the North American experience and help enable and accelerate the global potential of unconventional gas in Asia and beyond. GUG2011 will be held September 12-14, 2011 in Beijing, China. For more information on GTI, visit www.gastechnology.org.
Gas Technology Institute Research and technology development for natural
Training in exploration &
production, LNG, distribution/ transmission, and utilization
gas customers and the energy industry
Conferences > GUG 2011, Global Unconventional Gas September 12-14— Beijing, China > tcbiomass2011, the International Conference on Thermochemical Conversion Science September 28-30— Chicago, USA
www.gastechnology.org
Publications and Documents Available from IGU
IGU Secretariat c/o Statoil ASA 0246 Oslo Norway Tel: +47 51 99 00 00
As a non-commercial organisation promoting
Fax: +47 22 53 43 40
technical and economic progress in the gas
Email: secrigu@statoil.com
industry worldwide, IGU offers its publications
230
free of charge. You are invited to download the
IGU publications
publications currently available from the IGU
l IGU Articles of Association
website www.igu.org or order hard copies from
l IGU Annual Report
the Secretariat.
l Triennial Work Programme 2009-2012
P u b li c at i o n s
a n d
Do c u m ents
Av a i l a b l e
fro m
IG U
l IGU Organisation Chart 2009-2012 l IGU General Brochure l IGU Guiding Principles for Sustainable
Development
Int ernational Gas I n T E R n a T I O n a l
l Natural Gas – Part of the Solution to Global
l IGU Gas Efficiency Award 2008/2009 & IGU
Social Gas Award l Current IGU Strategic Statement
Publications from WGC 2009
OCTOBER 2010
l Natural Gas Unlocking the Low-Carbon Future
I n ter n a ti on a l G a s
Climate Changes l Natural Gas as a Transportation Fuel
l Natural Gas Industry Study to 2030
OCTOBER 2010 G a s
U n I O n
E IN L O R S GAS’ STAINABLEE A SU GY FUTUR ENER .igu. www
org
l IGU Energy Efficiency Indicators l IGU proposed Guidelines for Gas Market
Integration l Best Practices Initiative l Proceedings of the 24th World Gas
Conference, Buenos Aires 2009 Joint publications with other organisations l The Role of Natural Gas in a Sustainable Energy
Market (with Eurogas) l Guidebook to Gas Interchangeability and Gas
Quality 2010 (with BP) Scientific and technical papers and documentation l Proceedings of the 23rd World Gas Conference,
Amsterdam 2006, (CD-ROM) l Sustainable Development and the Role of Gas (2006) l Gas to Power Global Outlook, (2006) l The Art of Regulation, (2006) l Proceedings of the 22nd World Gas Conference,
Tokyo 2003 l Proceedings of the 17th, 18th 19th, 20th and
21st World Gas Conferences, (CD-ROM) l International Gas, ISC, all issues of the
bi-annual IGU Magazine from 2004-2010 Please check the IGU website for other (older) publica tions which are still available from the IGU Secretariat.
Pu b l i c at i ons
and
Docu m ents
Av a i l a b l e
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231
OB I TUAR I ES GTI Mourns the Passing of Bernie Lee It is with deep sadness that IGU affiliated organisation the Gas Technology Institute (GTI) notes the loss of Dr Bernard S. “Bernie” Lee, who died on November 7, 2010 aged 75. Dr Lee, former President and CEO of the Institute of Gas Technology (IGT), was well-known and highly respected within the natural gas community. He joined IGT in 1965 and was responsible for the development of various synthetic fuels programmes involving coal, oil shale and liquid hydrocarbons, becoming President in 1978. Dr Lee was a strong leader in the international LNG community and played an active role in organising the International Conference & Exhibition on LNG series. He was a member of the Steering Committees from LNG6 through LNG13, and chaired the Steering Committees of LNG7, 9, 11 and 13. He retired in 1999 but con tinued to be involved profes sionally, serving as an energy advisor in Malaysia and China. During the past four years, he had been actively promoting the development of massive electricity storage (MES) to the renewable energy industries and the scientific research community. Dr Lee served on IGT’s Board of Trustees and Executive
232
OB I TUAR I ES
Committee and on several other US industry boards, including the National Fuel Gas Company, NUI Corporation and Peerless Manufacturing Company. He received his bachelor’s degree and doc torate in chemical engineering from the Polytechnic Institute of Brooklyn in 1956 and 1960, respectively. In Memory of Katarzyna Steczko The Oil and Gas Institute of Krakow, Poland, pays homage to Dr Katarzyna “Kasia” Steczko, who died on March 27, 2010 aged 67. A woman of great heart and intellect, Dr Steczko was a
demanding leader but at the same time she asked much of herself, which allowed her to be an excellent research worker. A graduate of Jagiellonian University in Krakow, Dr Steczko started her profes sional career in the University before moving in 1980 to the Oil and Gas Institute. For many years she was the head of the Institute’s Environment Protection Department and developed a range of research projects, notably on the management of wastes and waste waters and on methane emissions from the natural gas system. She was also active in the fields of natural gas quality and the management of chemicals used in the petroleum industry. Internationally, Dr Steczko participated in several Euro pean projects, represented Poland in ISO technical committees dealing with gas, contributed to the IPCC’s work and was valued member of the IGU team. In the 1997-2000 Triennium, she was an active member of the then WOC 8 – Environment, Health and Safety and organised the Committee’s meeting in Krakow in May 1998. She continued as a WOC 8 member for the 2000-2003 Triennium and presented a report at WGC2003 in Tokyo. Most recently she was a mem ber of PGC A – Sustainability
2011 April 5-7 IGU Executive Committee Rio de Janeiro, Brazil May 12-13 European Gas Technology Conference EGATEC2011 Copenhagen, Denmark June 6-7 16th European Gas Conference Oslo, Norway June 10 Eurogas General Assembly Milan, Italy June 14-16 Shale Gas Series: Europe Summit Warsaw, Poland September 12-14 Global Unconventional Gas 2011: Unlocking Your Potential Beijing, China September 12-16 45th Annual IPLOCA Convention Beijing, China October 3-7 IGU Council Meeting Dubrovnik, Croatia
For the IGU Secretariat Secretary General: Torstein Indrebø Director: Hans Riddervold Senior Advisor & Press Contact: Erik Gonder Advisor to the Secretary General: Jeanet van Dellen Advisor to the Secretary General: Carolin Oebel Administration Assistant: Åse Nicolaysen For ISC Editor-in-Chief: Mark Blacklock Copy & Picture Editor: Adrian Giddings Publisher: Nigel Ruddin Publications Director: Robert Miskin Special Projects Director for IGU: Karin Hawksley Finance Director: Yvonne O’Donnell Finance Assistants: Maria Picardo, Anita d’Souza Senior Consultants: Jeffrey Fearnside, Michael Gaskell, William Innes, Jonathan Unsworth Art and Design Director: Michael Morey Printed by: Buxton Press Ltd IGU and ISC would like to express their thanks to all those who helped in the preparation of this publication. Thanks are also due to the following companies, people and organisations for providing pictures. The credits are listed by article. Where the pictures for an article came from a variety of sources, the appropriate page numbers are given in brackets after each source. Cover: flame – David Parker/Science Photo Library; Inside the drilling platform of Sakhalin II – Gazprom; Rio skyline – Flickr User: Rodrigo Soldon; IEF-IGU 2nd Ministerial Gas Forum in Doha & IGU-Worldwatch Gas Symposium in Cancún – IGU, CNG-fuelled taxi in Detroit – Ford Motor Company.
October 18-20 4th Biennial Conference & Exhibition of the Asia-Pacific NGV Association (ANGVA2011) Beijing, China
IGU Events and IGU-related Events 2011-2012
October 19-21 IGU Research Conference (IGRC2011) Seoul, Korea
2012
October 31-November 1 Australia Gas Sydney, Australia
March 13-15 IGU Executive Committee Houston, USA
November 7-10 World Shale Gas Conference & Exhibition Houston, USA
June 4 IGU Council Meeting Kuala Lumpur, Malaysia
November 28-December 9 17th Session of the Conference of the Parties to the UNFCCC (COP17) Durban, South Africa December 4 IGU-Worldwatch Natural Gas Symposium Durban, South Africa
June 4-8 25th World Gas Conference Kuala Lumpur, Malaysia You can find links to many of the above events by visiting www.igu.org.
December 4-8 20th World Petroleum Congress Doha, Qatar
Messages: Malaysian Gas Association – MGA (10 & 15 right), Kuala Lumpur City Hall (11), IGU (14), Mary Evans Picture Library (15 upper left), Gazprom (15 lower left). IGU Members and Organisation: Statoil (22), IGU (26), MGA (Datuk Abdul Rahim Hj Hashim and Ho Sook Wah, 27), AFG (Jérôme Ferrier and Georges Liens), IAPG (Ernesto López Anadón, 27), IGU (Torstein Indrebø, 27). News from the Secretariat: IGU (30, 31, 34, 35, 36, 38, 40 & 42 upper), Dietmar Gust/Handelsblatt (42 lower & 43). Bigger Role for Gas Discussed at 2nd IEF-IGU Ministerial: IGU. A Busy Council Meeting in Qatar: IGU (51, 54, 56, 57 & 58 Eggar), UNIDO (58 Yumkella), Clingendael International Energy Programme (58 van der Linde), Jon Chomitz/IHS CERA (58 Yergin). News from Organisations Affiliated to IGU: Danish Gas Technology Centre (64), GIE (69), Enagás S.A. (70), Wärtsilä Corporation (73), PRCI (76), Spectra Energy (77). IGRC2011 Launches Call for Papers: COEX Convention and Exhibition Centre. 25th World Gas Conference is On Track: MGA. Progress Report: All IGU except Flickr User: Hulivili (93), MGA (95 lower), Sonatrach (116), Qatargas (124 upper), Woodside Energy Ltd (124 lower). The Brazilian Gas Industry: Paulo Maurício (146 left), Geraldo Falcão/Petrobras Image Database (146 right), Petrobras (147), Marcos Morteira/ Petrobras Image Database (150), Paulo Cabral/ Petrobras Image Database (152).
Ev e n t s
Acknowledgements Cancún Agreement Hailed as a Lifeline: International Institute for Sustainable Development. IGU Joins Forces with Worldwatch for COP16 Gas Symposium: IGU. The Gas Industry in Mexico: GDF SUEZ. The New Potential of Gas: Abengoa Solar (173 left), Iberdrola, S.A. (173 right). Renewable Gas: East Midlands International Airport Limited. Promoting Wholesale Gas Markets: EFET (188), OMV AG (190). The Breakthrough Decade for NGVs: Eugene Pronin. Russia’s Initiative in UGS Education and Training: Gazprom UGS Ltd (201), Gubkin Russian State University of Oil and Gas (202). The Ems Gas Pipeline Tunnel – On Time and Budget: N.V. Nederlandse Gasunie. Expanding Northern Europe’s LNG Import Capacity: Gate Terminal/Aeroview B.V. Rotterdam (216 & 217 lower), Gate Terminal (217 lower & 218), Grain LNG (220). GIIGNL’s Information Papers on the Safety and Security of LNG: Roar Lindefjeld/Statoil (223 left), Samsung Heavy Industries (223 right). Obituaries: GTI (232 upper), IGU (232 lower).
and
Ac k nowled g em ents
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