LNG15 Conference shows the growing importance of liquefied natural gas in the world energy sector

Experts foresee demand for highly-qualified professionals for the LNG sector over next few years

Attendance at the International Conference on Liquified Natural Gas has surpassed the expectations of its organizers, the Spanish Energy Association Sedigas, with a total of almost 5,000 participants including delegates, exhibitors and visitors, a full one thousand more than expected. The conference, which will be officially closed this afternoon by Spain’s Secretary General of Energy Ignasi Nieto, has run from 24 – 27 April at the Barcelona International Convention Centre.

Although this event is dedicated to a narrower sector, GNL15 has managed to attract a higher rate of attendance than the broader World Gas Congress (which also covers LNG) held in Amsterdam in June 2006. This fact “demonstrates the growing importance of LNG in the gas and wider energy sector as an alternative way of supplying gas in Europe,” according to Antoni Peris, President of Sedigas.

Peris’s opinion coincides with that of Fabrizio Barbaso, the Deputy Director General of Energy and Transport of the European Commission. Barbaso stated that LNG holds out the possibility of diversifying gas routes and suppliers in order to secure the supply of energy for Europe. “If costs keep falling, LNG can play a key role in the supply of energy,” said Barbaso.

The range of experts who have given papers at LNG15 and the active participation of 500 companies from 55 countries over the past four days are proof that liquefied natural gas has become a truly global industry. This was confirmed by Tan Sri Dato Sri Mohamed Hassan Marican, President and CEO of Petronas who foresees an annual growth rate of 8% for the sector until 2015. Consultants Wood MacKenzie expect the world trade in LNG to increase threefold over the next 15 years. Rune Bjørnson, Executive Vice President of Norwegian company Statoil, emphasized the strong prospects for the LNG sector. He is predicting that global sales of LNG will double in the next ten years, with the strongest growth coming from the US market.

A sector of the future: demand for qualified professionals

The LNG industry will also generate demand for many highly-qualified professionals in the coming years. 117 new gas carriers have entered active service over the last three years, creating the need for technical and specialized manpower, according to James A MacHardy, Secretary General of the Society of International Gas Tankers and Terminal Operators (SIGGTO). New regasification and liquefaction plants being planned throughout Europe will increase the demand for workers. For this reason, Sedigas has invited engineering students from Spain’s main universities to attend the conference and get to know the sector and the opportunities it can offer at first hand.

Spain – the world’s third largest consumer of LN

LNG15 has also confirmed Spain’s position in the LNG market as the third larger importer of this source of energy. With five liquefaction plants operating in Barcelona, Sagunto, Cartagena, Huelva and Bilbao, 400 gas carriers delivered cargoes of LNG to Spanish ports during 2006 at an average of 1.1 per day, according to Antoni Peris, President of Sedigas.

World trade in LNG reached a total of 211.1bcm in 2006, an increase of 11.7% on figures for the previous year, according to Cedigaz. Spanish regasification plans received 11.1% of the gas transported by gas carriers worldwide.

The strength of growth in demand for LNG is such that “Europe is starting to see LNG as a very viable alternative for its gas supplies, according to Peris. For this reason, LNG projects are currently underway in various parts of Europe.

Significant speeches and forecasts on the LNG sector

Joan Clos, Spanish Minister of Industry, Tourism and Trade, urged gas companies to invest in building installations that can increase the storage capacity for LNG in Spain. “For this reason, the Spanish government has set up a new financial framework which will offer private investors who invest in this kind of infrastructure a guaranteed return of 8.5%,” he told an audience of over 2,000 delegates at the official opening ceremony of LNG15.

Tan Sri Dato Sri Mohamed Hassan Marican, President and CEO of Petronas, also spoke of the changing dynamics of the LNG market, driven by the diversification of supplies and the increasing availability of shipping capacity. For Marican, these new dynamics have lead to in LNG trading beyond the confines of the specific regions to the East and West of the Suez Canal. Thus, while LNG prices remain regionalized, those of the Atlantic Basin are more responsive to market forces, whereas prices in the Pacific Basin are still strongly linked to those of oil. For the president of Petronas, such changes in the global gas market are compelling buyers to adopt more diversified contracting strategies. One of the major challenges facing the LNG sector, according to Marican, is reining in costs to avoid an increase in the price of gas which could make it lose competitivity.

Another interesting keynote speech was that of Rune Bjørnson, Executive Vice President of Statoil, who stated that “Europe enjoys a good geographical location in relation to LNG reserves.” Europe will enjoy an adequate supply of natural gas in the coming decades, according to Bjørnson.

James A MacHardy, Secretary General of the Society of International Gas Tankers and Terminal Operators (SIGGTO) said that the industry is still booming compared to previous years, a fact demonstrated by the growing demand for tankers. “We need ships and terminals because over 25% of the natural gas consumed today is transported by sea,” said MacHardy. 26 ships were built last year, 34 will be built this year and 2008 should see 57 more. MacHardy also pointed out that gas reserves in Canada and the US are dwindling and that LNG will become a complement to existing gas supplied to the US. There are currently 20 projects approved in the US, many of which will come to fruition.

MacHardy also illustrated the safety record of the LNG shipping industry with some figures: “We have never spilled a large volume of LNG with 46,000 loaded voyages completed.”

Exhibition

One of the leading attractions of the conference has been the exhibition, officially opened on Tuesday by María Teresa Costa, President of the Spanish National Energy Commission. With a total surface area of over 20,000m2 and 200 exhibitors, it has provided a full picture of the wide range of products and services available to the LNG industry.

Barcelona, 27 April 2007

For further information:
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