02/09/2014 01:40 AST
Over the last decade, the discovery of massive quantities of unconventional gas resources around the world has spurred a renaissance within global energy markets, redirecting international attention to natural gas as a leading source of energy supply.
Modern technology allows natural gas to be chilled at ultra-low temperatures to a liquid state, called liquefied natural gas or LNG, making it easier to store and transport.
Buyers of LNG process the gas through specialized import facilities that convert it back into its gaseous state.
Qatar: The king of LNG
Since 2006, Qatar has led the world in annual LNG exports, producing a volume of 77 million tons per year (MTPY) at its 14 gas processing and liquefaction facilities, known as “trains” in industry lingo.
RasGas and Qatargas, joint venture companies with state-owned Qatar Petroleum, produce the country’s LNG at the Ras Laffan Industrial City, a compound of gas processing facilities that is home to the largest LNG export terminal in the world and located around 50 miles outside of Doha.
Qatar boasts the third largest natural gas reserves in the world and has a vast resource wealth that makes the nation of around 280,000 citizens the richest in the world in terms of GDP per capita.
The North Field offshore Qatar is the largest non-associated gas deposit in the world and the country’s primary hydrocarbon asset, which it shares with its neighbor across the Arabian Gulf, Iran.
The Gulf nation meets most of its domestic energy consumption through its gas resources, which provide for over 60 percent of government revenues.
Nearly all of the natural gas exported from Qatar takes the form of LNG, with the remainder transported by pipeline to the UAE and Oman.
Early market entry and heavy investment in LNG infrastructure has allowed Qatar to become an LNG powerhouse and the world’s largest exporter of the product.
Of the 29 LNG importing nations, 26 buy from Qatar. In 2005, Qatar halted further development of its North Field, imposing a moratorium on new projects in order to maintain supply stability over the near term.
With no further LNG projects planned in the near term, the emergence of high-capacity LNG projects around the world threatens Qatar’s supremacy as the current market leader as new projects prepare to go online.
New supply from international markets
The bulk of new LNG capacity in the near future will come from Australia, the US, Canada, and East Africa. Regional economics and geographic advantages will make these countries solid competitors for a share of the global LNG market.
Japan, South Korea and Taiwan are the largest buyers of LNG — together importing over half of the supply in the market.
These countries are dependent on imported energy as they have highly industrialized economies and lack domestic energy resources.
China and India will lead LNG demand growth in the future as the countries import greater quantities of LNG to fuel their rapidly expanding economies.
Following the 2011 tsunami that devastated Japan’s Fukushima-Daiichi nuclear power facility, the country decommissioned its nuclear energy program and turned to increased hydrocarbon imports.
Japan currently is the largest buyer of LNG in the world, importing 35 percent of global supplies at its more than 30 re-gasification facilities.
By default, the Asia Pacific region has become the largest market for LNG in the world.
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