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Market
Natural Gas Reserves
Natural Gas Production
Natural Gas Consumption
International Trade
Regional Markets
World's resources of natural gas, although finite, are enormous, while estimates of its size continue to grow as a result of innovations in exploration and extraction techniques. Natural gas resources are widely and plentifully distributed around the globe. It is estimated that a significant amount of natural gas remains to be discovered.
Distribution of proved natural gas reserves (%) in 2004
Proved reserves are those that could be economically produced with the current technology.
The former Soviet Union holds the world's largest natural gas reserves, 38% of the world's total. Together with the Middle East, which holds 35% of total reserves, they account for 73% of world natural gas reserves.
In 2000 total world reserves were 150.19 trillion cubic metres. Global reserves more than doubled in the last twenty years.
World's ratio of proven natural gas reserves to production at current
levels is between 60 and 70 years. This represents the time that remaining
reserves would last if the present levels of production were maintained.
Natural gas production (billion cubic metres ), 1970-2004
Source: UNCTAD based on data from
BP Statistical Review of World Energy June 2005
World main producing countries in 2000 were United States (22.9 % of world production) and the Russian Federation (22.5 of total production). Other major producing countries are Canada, United Kingdom, Algeria, Indonesia, Iran, Netherlands, Norway and Uzbekistan. These ten countries alone accounted for more than 86% of total natural gas production in 2000. North America and the Former Soviet Union together accounted for 59% of global production.
Total world production in 2000 was 2422.3 billion cubic metres. Production growth in 2000 was 4.3%, a significantly higher growth that the 1990-2000 annual average. Although production increased in all regions, the faster growth was recorded in the Middle East and Africa. During the nineties production rose in all regions but the Former Soviet Union.
World natural gas production is expected to grow in the future as a result of new exploration and expansion projects, in anticipation of growing future demand.
Natural gas accounts for almost a quarter of world's energy consumption. As clearly shown in the graph below, consumption of natural gas has increased considerably in the last 30 years.
Natural gas consumption (billion cubic metres), 1965-2004
Source: UNCTAD based on data from BP Statistical Review of World Energy June 2005
World main consuming countries in 2000 were United States, accounting for 27.2% of total consumption, and the Russian Federation, with 15.7% of total consumption. North America and the Former Soviet Union together consumed 55% of total natural gas. The share of Europe in total natural gas consumption was 19.1%. These three areas account for three quarters of global consumption.
Consumption growth was 4.8% in 2000, with the highest rates of growth registered in Africa (12.8%) and Asia (7.8%). Total world consumption was 2404.6 billion cubic metres.
The most important energy agencies in the world are forecasting important increases in natural gas demand in the next 20 years. The largest increments in future gas use are expected to be in the developing countries.
Consumption per capita by country, tonnes oil equivalent
Source: UNCTAD based on data from BP Statistical Review of World Energy June 2004
According to Cedigaz, 26.3% of total world marketed natural gas production was internationally traded. LNG (liquefied natural gas) tankers trade accounted for 21% of total international trade. The low share of international trade is due to the high transportation costs. Natural gas is complex to transport and requires large investments, while many gas resources are far from consuming centres. The construction and management of pipelines also poses legal and logistical problems.
Main exporting countries by pipeline in 2000 were the Russian Federation, Canada, Norway, Netherlands, Algeria and United Kingdom. The main importing area by pipeline, apart from United States, which took hold of all Canadian exports, was Europe.
Most LNG trade takes place in Asia-Pacific, with Indonesia, Malaysia and Australia as exporting countries and Japan as the main importing country. Algeria and Qatar are also major exporters of LNG.
World LNG infrastructure as for World LNG Source Book 2001 (Gas Technology Institute):
- Twelve countries have liquefaction facilities: Abu Dhabi, Algeria, Australia, Brunei, Indonesia, Libya, Malaysia, Nigeria, Oman, Qatar, Trinidad and Tobago, and the United States.
- 38 receiving terminals are operating in ten countries: 23 in Japan, three in Spain, three in the U.S., two in Korea, two in France, and one each in Belgium, Greece, Italy, Taiwan Province of China, and Turkey.
Interactive map - Major trade movements (billion cubic metres), 2004
By pipeline
Liquified Natural Gas (LNG)
 |
Source : UNCTAD based on data from BP Statistical Review of World Energy June 2005
Due to the low weight of international trade in total world production,
there is not a globalized natural gas market but rather regional markets,
which vary in terms of their organization, maturity and market structures.
The main areas are North America, Western Europe and Former Soviet
Union. Other regional markets for natural gas are increasing in importance,
as the Asian-Pacific or Latin American markets. Gas demand in Africa,
South Asia or China is mainly met by domestic or regional sources.
The Middle East is primarily a supplier region.
North America
The countries of North America constitute a very integrated and mature market for natural gas. The North American natural gas market is almost self-sufficient. The liberalization process in natural gas market started as early as the seventies in Canada and United States, and they are the countries who have gone furthest in opening the market to competition.
The United States is the first world producer and consumer of natural gas. According to USEA (United States Energy Association) "Toward a National Energy Strategy", the number of natural gas consumers has been growing these last years to reach in 2001 totals nearly 175 million Americans. Natural gas is extracted from 288,000 producing wells and transported by 125 natural gas pipeline companies through a 1.3 million-mile network of underground pipes to more than 1,200 gas distribution companies who provide customer service in all the 50 states. Almost all the gas consumed in the United States is produced in North America. Large deposits of natural gas are known to exist in about half of the 50 states, but just five states (Texas, Louisiana, Alaska, New Mexico and Oklahoma) hold more than one half of the country reserves.
The following graph reflects the functioning of the natural gas market in USA in 1998:
Source: Energy Information Administration
* For detailed information on natural gas markets in North America, see: U.S. Energy Information Administration, Natural Resources Canada-Natural Gas Division
Western Europe
The reserves of natural gas in Western Europe are limited, accounting for less than 5% of global resources. At present, the European market is under structural changes resulting from the liberalization process that is taking place. Main producing countries are Netherlands, Norway and United Kingdom. The gas industry in Europe consists mainly of downstream activities undertaken by transmission and distribution companies.
More than 30% of gas consumption is met by pipeline imports from
Former Soviet Union and Algeria as well as LNG imports from North
Africa. Import dependence is expected to continue in the future, although
supplies are considered to be at reasonable distance. The structure
of the natural gas supply and transport system in Europe is shown
in the following graph:
Source: Eurogas
* For more information on European natural gas market:
European
Union-DG Energy & Transport , Eurogas
Former Soviet
Union
The Former Soviet Union holds the largest proved world reserves of natural gas. The Russian Federation is the second major producing country and the world leading exporting country. Natural gas is the predominant fuel in Russia, accounting for nearly half of the country's domestic consumption. The Russian Federation exports all the gas that is not consumed domestically. Before the break-up of the Soviet Union, the majority of this gas was exported to Eastern Europe. Since then, Russia has continued to supply to the Commonwealth of Independent States and to Eastern Europe but trying to diversify geographically its exports, with more than 62% exported outside of traditional destinations. Apart from Russia, Turkmenistan is the only significant exporter. Russian natural gas industry is a monopoly run by Gazprom, which controls more than 95% of production.
* For detailed natural gas market overviews on different countries,
see:
Oilonline
Energy
Information Administration
International Gas Union
