Natural gas is a viable alternative to coal and often cheaper than oil for transportation

NRG Expert’s in-depth analysis of the global natural gas market confirms that natural gas is becoming an increasingly attractive fuel for power generation and transportation. UK) 3 October 2012

Natural gas on the rise – key findings:

•     Low gas prices have made natural gas more attractive
• Carbon reduction commitments are encouraging production
• Natural gas is seen as a cleaner fuel than coal
• Increasingly it is seen as a cheaper fuel than oil for transportation
• Natural gas liquids (NGLs) are increasingly replacing oil products in the production of petrochemicals, especially ethane for naphtha.

Further highlights from research:

Supplies of natural gas not constrained

Supplies of natural gas are not constrained, due to the glut of shale gas in the North American market. The cost of producing shale gas has been declining due to advances in hydraulic fracking. However, low gas prices have made some fields less profitable. While global natural gas prices are projected to rise, natural gas producers are looking for alternative sources of revenue as well, to ensure profitability, if natural gas prices for electricity and heat generation fluctuate.

Transportation fuel

Transportation fuel substitutes such as a drop-in fuel and compressed natural gas (CNG) are being used commercially. The drop-in fuel being produced by Sasol and Shell is a diesel substitute and thus restricted to diesel cars. CNG is also mainly used by vehicles that don’t travel long distances such as public buses or on predictable routes such as trucks.

The use of natural gas liquids (NGLs) for petrochemical production has grown

The use of natural gas liquids (NGLs) for petrochemical production has grown in major natural gas markets such as the US and the Middle East, especially Qatar. As natural gas liquids prices are relatively high, but comparatively lower than oil, it is a viable alternative to oil. In the US, chemical companies have announced plans to locate plants close to shale gas fields or natural gas pipelines.

Natural gas markets becoming more international

Traditionally the natural gas market has been regional, and to a large extent still is, with most natural gas transported via pipelines and sold via long-term oil-linked contracts. As newer markets have been created for natural gas and demand has grown in geographically isolated countries, the market for liquefied natural gas (LNG) has grown considerably in order to transport natural gas over longer distances.

A more international market has been developing. Additional LNG trade routes are expected in the mid-to-long term as Canada and the US become net exporters of LNG gas. Other countries such as Australia are expected to become major exporters, with others losing their market share. Likewise net importing countries may increase domestic production of unconventional natural gas, reducing their import demand. Overall it appears that demand is growing for natural gas

Natural gas market research

If you are working in this industry, NRG Expert’s report on the global natural gas market can provide an invaluable resource. Background information

NRG Expert is a London and Toronto based energy intelligence and market research publisher. Market Research

For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2012/10/prweb9970109.htm