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Gas Regional Investment Plan of the South Region 2017 |
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2.1 Worldwide Context
The global context we face today is one of cheap
energy, reduced economic growth and the challenge of
maintaining environmental sustainability, particularly
with regards to the implementation of environmental
policies.
During the COP21 held in Paris in December 2015, the
necessity of accelerating the reduction of global green-
house gas emissions and the promotion of renewable
energy was firmly stated.
Although some uncertainties remain regarding the future of natural gas use and
consumption, in a world driving to a more sober low-carbon society, the conference
also suggested some potentially interesting opportunities for natural gas. The
conclusions drawn in Paris also underlined the importance of climatic change for
both world economic development and public health. The political momentum that
emerged at the COP21 suggests that natural gas may play an important role in the
world's future energy mix, being a key in the transition towards a low-carbon
economy, given that gas is flexible, abundant and cleaner than other fossil fuels. Gas
is a large-scale resource used to facilitate electricity production in combination with
renewable energy sources, and provides clean heating to industrial, commercial and
residential customers. Compared to coal, gas presents the clear benefits of reducing
emissions of carbon and highly polluting particles matter that contribute to poor air
quality.
In the medium and long-term, natural gas has high potential, as it remains a
competitive energy supply for a wide range of consumers and countries. Particularly
promising markets include marine and road cargo transportation, specifically those
using LNG.
In the short term, the consequences of lower gas prices are difficult to predict, which
will bring considerable uncertainty to the supply side for the coming years. As a
result, it is possible that some production investment decisions may be postponed
or capacity reduced (Australia LNG), whereas several new production capacity will
come into production (Yamal LNG due on 2017, etc…).
Another important fact is how the new role of the Unites States as a gas exporter will
impact the market, as it becomes more and more relevant. The technical complexity,
high leverage, and environmental policy restrictions associated with the exploitation
of unconventional gas fields may complicate attempts to replicate the large scale
shale gas experience outside of the United States, especially in Europe. In any case,
the development of small or medium shale gas exploration fields in some countries
may occur.
Pricing levels and structures have changed rapidly in the last two years. Regional-
ised until recently, NG and LNG prices have declined globally in recent years
because of the reduction in oil price, slow demand and increased supply capacity.
There was also a better balance between supply and demand in Asia that contribut-
ed to the LNG price convergence in the Atlantic and Pacific Basins and reduced
arbitrage opportunities for shippers and producers.