Arctic gas fundamentals and alternatives

This paper presents a North America natural gas outlook from Purvin and Gertz, an international energy consulting firm that provides strategic, commercial and technical advice to the petroleum industry. In particular, this presentation focuses on natural gas market fundamentals and how they may impact the development of Arctic gas. The economics and technical feasibility of Arctic gas development were questioned. It was noted that although high prices generally encourage investment in new supplies, high prices may also reduce potential demand growth. Industrial gas demand has dropped greatly since the late 1990s and the sector is at risk in the future. It was suggested that coal will remain the primary source of power in the United States, as the lower 48 gas market has an increasing supply deficit. Existing liquefied natural gas (LNG) import terminals in North America were illustrated along with permitted LNG regas projects. Charts depicting world gas reserves indicate that LNG trade is likely to undergo rapid expansion, particularly Qatar's north field. Alternatives to LNG include coalbed methane, tight gas, deep gas, deepwater gas, gas hydrates, and other frontier gas. The paper also addressed changes in the Canadian natural gas outlook with reference to the Mackenzie and Alaska gas pipelines, natural gas prices, markets, and demand factors. 12 figs