Tales of harnessing the power of natural gas date back as far as the first century AD. Legend has it that gas seepage from the ground at the court of the King of Persia was lit to heat the King’s royal kitchen.
But far from being a fuel of the past, the appeal of natural gas has never been greater, with Liquefied Natural Gas (LNG) in particular set to play an increasingly important role in supplying present and future power needs.
As the environmental impact of burning traditional fossil fuels becomes more evident, there is increasing awareness of the need to reduce the global carbon footprint and seek alternatives to coal and oil.
Gas – which produces fewer carbon emissions and is relatively inexpensive – is the perfect complement to the growth of renewable energies like wind and solar power, offering a continuous power supply when the wind doesn’t blow, or the sun doesn’t shine.
The growth in demand for LNG, of course, requires an expansion of import and export terminals to allow specially-designed carriers to transport gas across continents. And that expansion is already well underway.
Building LNG facilities requires investment and specialist knowhow, but transporting gas by ship avoids the heavy cost of building new pipelines.
In addition, a record number of new LNG carriers are being built to ship gas from the major exporters such as the US, Qatar and Australia in order to meet future demand, from Asia in particular.
At current consumption rates the supply of natural gas exceeds demand, but as the world’s population continues to grow and industrialization transforms the economies of developing nations, the demand for affordable electricity will increase. And gas-to-power plants, which use LNG or piped natural gas as their feedstock, will be key to providing a significant proportion of that electricity.
Economies in Asia depend on a reliable and consistent supply of clean, inexpensive energy to fuel current and future economic growth. Myanmar, Bangladesh and Vietnam are just some of the countries expected to register rapid demand for power.
Some future demand will be met by the growth in renewable energy sources. But major oil and gas companies have an essential role to play in smoothing the transition from coal and oil-fired power to renewables, and in making sure growing energy demand is met.
Adding to technologies such as ‘scrubbing’ noxious fumes and capturing carbon from flue gasses of traditional power plants, investing in cleaner energy from natural gas is another route to meet the power needs of developing nations in a more sustainable way.
Ensuring that a consistent and reliable natural gas supply is maintained will require careful management of both supply and demand issues. And upstream gas companies have several options to become more involved in ensuring demand for the raw materials they extract.
One approach is to invest in developing gas-fueled power generation plants to create direct and immediate demand for their gas. Extolling the clean credentials of gas as a source of electricity should also ensure longer-term market growth.
Making the move from an energy extractor to a power generator sounds like a smart move but it does come with some serious challenges. One way to overcome these challenges is to forge reliable partnerships - with utility companies, developers, suppliers, and engineering, procurement and construction specialists – in order to complement their knowledge and boost their expertise.
Producers keen to break into Asian markets, or develop an existing presence, need to offer a full range of services to their clients.
This means putting infrastructure in place to import a consistent supply of LNG, with a re-gas terminal and pipeline to transport the gas on to its final destination. To achieve this effectively producers also need to act quickly and with confidence, finding partners with a strong reputation for developing infrastructure.
BP predicts that natural gas will become the Earth’s major energy source by 2040. As such, gas will remain a priority sector for investments over the coming years.
In addition, the introduction of new digital technologies could facilitate a wave of efficiency improvements and cost reductions throughout the industry, lowering future energy prices.
Managed efficiently - and with the correct investments and partnerships - gas has the capacity to help the world’s economies achieve a lower carbon footprint while also meeting their growing energy needs.
Together with renewable alternatives, natural gas holds the power to generate a brighter future.