Global gas markets will come but not for several decades, the head of BG Group told a conference this morning.
Sir Frank Chapman, chief executive, said getting gas to a similar position as oil, where it can be freely traded globally, would take time.
“I think this will take several decades yet to perfect,” he told the Gastech conference in London. “But there is no doubt an irreversible trend is underway that will change global energy dynamics for good.”
Despite this Sir Frank said there had “never been a more exciting and important time to debate the global future of gas”, which he said was entering a “golden age” and was a destination fuel, not a transition fuel.
“The pace of change is probably faster than at any time in my 38 years in the oil and gas industry,” he said.
He said LNG, combined with a huge expansion of inter-regional pipelines, was transforming the market reach and liquidity of gas.
Unconventional resources were further driving change, particularly in the US and Australia, as well as use of LNG.
However, he said he thought the impact of LNG exports from the US, thanks to the development of unconventional resources there, on global markets would “not be overwhelming” and that regional markets in gas would prevail for some time.
Sir Frank said supply of LNG had already made a huge difference to economies in the Asia-Pacific rim, with Japan the biggest importer, followed by and expected to be taken over by China.
He said last year LNG accounted for 10% of all natural gas consumed, a number expected to grow to 14% by 2025.
He said the International Energy Agency predicted that global gas reserves would last for 250 years at current rates of production.
“However, every golden age has its challenges and gas is no exception,” he said.
“We need to grow the industry’s licence to operate and continue to ensure the highest level of environmental performance.
“The crucial challenge for the industry here is to set standards and self-regulate. Consumers and communities must have confidence in us and it is our job to earn that confidence.”
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