Natural Gas Trade

Natural gas is usually sold according to its heating values. The heating value of a product gas is a function of the constituents present in the mixture. In the natural gas trade, a heating value of one million Btu is approximately equivalent to 1,000 ft of natural gas. 

Table 1.7 shows the data for the U.S. natural gas trade by country. The data indicates that the U.S. import of natural gas mainly depends on Canada. 

Table 1.7 United States Natural Gas Trade (Billion Cubic Feet)...

The Union itself should not intervene too directly in the supply choice of its natural gas importers There is an emerging global market for natural gas and the EU currently has a relatively well-composed mix of imports. The increasing part of LNG in international natural gas trade will facilitate a further diversification, though at higher prices than previous long-term pipeline gas supplies. The well-founded objective of supply security should not lead to too heavy interventionism by member states of the EU in favor of its own incumbent companies. 

In contrast to current United States oil production and use patterns, the United States is not a significant importer of natural gas. Trade agreements with Canada and with Mexico are responsible for the import of natural gas but these are more of a convenience for the Border States rather than for the nation as a whole. 

The nameplate capacity of worldwide methanol plants is given by country in Table 2 (27). A significant portion of this capacity is based on natural gas feedstock. Percent utilization is expected to remain in the low 90s through the mid-1990s. A principal portion of this added capacity is expected to continue to come from offshore sources where natural gas, often associated with cmde oil production, is valued inexpensively. This has resulted in the emergence of a substantial international trade in methanol. In these cases, the cost of transportation is a relatively larger portion of the total cost of production than it is for domestic plants. 

The London-based International Petroleum Exchange (IPE) is the second largest energy futures exchange in the world, listing futures contracts that represent the pricing benchmarks for two-thirds of the world s crude oil and the majority of middle distillate traded in Europe. IPE natural gas futures may also develop into an international benchmark as the European market develops larger sales volume. 

About 20 percent of the world s natural gas production was exported during the late 1990s, three-quarters of it through pipelines, and the rest by LNG tankers. The former Soviet Union, Canada, the Netherlands, and Norway are the largest pipeline exporters, while Indonesia, Algeria, and Malaysia dominate the LNG trade. The largest importers of piped gas are the United States, Germany, Italy, and France Japan and South Korea buy most of the LNG. 

Futures Prices Natural gas futures contracts began trading on April 3, 1990, on the New York Mercantile Exchange (NYMEX). Sabine Pipe Line Company s Heniy Hub near Erath,... 

As one more common example of liquid fuels present reference may be drawn to liquified petroleum gas (LPG) or bottled gas or refinery gas. This fuel is obtained as a by-product during the cracking of heavy oils or from natural gas. It is dehydrated, desulfurized and traces of odours organic sulfides (mercaptans) are added in order to identify whether a gas leak has occurred. Supply of LPG is carried out under pressure in containers under different trade names. It consists of hydrocarbons of great volatility such that they can occur in the gaseous state under atmospheric pressure, but are readily liquifiable under high pressures. The principal constituents of LPG are n-butane, iso-butane, butylene and propane,... 

In 1993 Russia had 48,000 kilometers of pipeline carrying crude oil, 15,000 kilometers for petroleum products, and 140,000 kilometers for natural gas. In recent decades, the natural gas lines have expanded at a much faster rate than the crude oil lines. The main natural gas pipeline, one of the Soviet Union s largest international trade projects, connects the natural gas fields of northern Siberia with most of the countries of Western Europe. Completed in 1984, the line passes nearly 4,000 kilometers across the Ural Mountains, the Volga River, and many other natural obstacles to connect Russian lines with the European system. 

NAFTA n.a. NEA NEDC NG NGC NGL NGPL NMVOC NOC NUTS North American Free Trade Agreement Not available Nuclear Energy Agency New European Driving Cycle Natural gas Natural gas from coal Natural-gas liquids Natural gas plant liquids Non-methane volatile organic carbons National Oil Company Nomenclature of Territorial Units for Statistics... 

The concept of GRI was based on the recommendation of an ad hoc committee of the Boards of A.G.A. and the Interstate Natural Gas Association of America (INGAA), the trade association of the interstate pipeline companies. GRI was incorporated in Illinois as a not-for-profit scientific research corporation... 

The research journals are the primary place where research results are first published. The prices of compounds change rapidly, and are to be found in journals instead of books. The New York Times finance page lists a number of commonly traded metals (aluminum, antimony, copper, gold, iron, lead, mercury, platinum, silver, zinc), food (corn, soya, wheat, rice, sugar), fuels (fuel oil, gasoline, natural gas), and textile (cotton, wool). The Chemical Market Report is a weekly journal that lists the prices of many chemical substances in a supplement, which depend strongly on purity and intended use. 

In addition, it is in the interests of Azerbaijan s balance of trade and fiscal budget for the additional 1.0 bcm of optional natural gas (together with its associated liquids) to be produced and put into storage in summer - and used in winter instead of imported gas or exportable oil products. 

Figure 10 shows the established worldwide trade routes for natural gas. There is however, a strong-growing trade over the Atlantic to the United States of America, where especially Trinidad, but also Nigeria, are exporting LNG to the United States of America. And by the year 2006 a new corridor will be opened for overseas export of LNG from the Northern part of Norway to basically the United States and Spain as shown on Figure 11. 

Figure 10 Current major trade movements for natural gas and LNG according to BP statistical review of world energy 2003 [3].

Last decade LNG trade doubles its volume. Now LNG represents approximately 22% of worldwide cross-border gas trade. And there is a consensus in LNG industry (according to IEA, [4]) that the demand is expected to double to approximately 220 - 270 BCM/y by 2010 and as a consequence LNG trade will experience strong growth. LNG has much higher cargo density than natural gas, so under the development of technology and costs reduction the LNG supply becomes more and more attractive. Figure 6 demonstrates the tendency to equalize the prices for delivered LNG and pipeline NG, see [5]. 

Although the natural gas industry has been a familiar business worldwide for decades, the natural gas industry is a fairly new trade for Norway. The first exploration and exploitation of hydrocarbons from the Norwegian Continental Shelf (NCS) was carried out as late as in the early nineteen seventies. 2 Since then however, remarkable growth has taken place and Norway is now a major European natural gas supplier. In 2002 Norway supplied approximately 12 % of the consumption in the OECD Europe, and the Norwegian market share is expected to grow in the years to come. 

Both natural gas as well as gas transportation service have traditionally been traded under take or pay contracts. In the gas transportation industry, deregulation typically brings along a transition from bilateral long term contracting to transparency and non-discriminatory behavior. Transportation suppliers typically offer a menu of often short-term transportation contracts with different degrees of priority and flexibility. In some systems shippers may also bid for capacity rights. 

The purpose of this book is to address opportunities extended from science and research pertaining to the exploitation and international trading of natural gas that involves transit countries. This especially relates to the transport and handling of gas from remote regions and pipelines that are... 

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