Though oil will continue to be the world's primary energy source for years-even decades-to come, there's little doubt that natural gas will eventually displace oil in that role. This is the view of Bernard J. Picchi, senior managing director and integrated energy analyst for Foresight Research Solutions LLC, a New York-based independent research firm. In making his case for an increasingly natural gas-ruled energy world, the analyst cites the cheapness of stranded gas versus crude oil. "One barrel of light sweet crude oil commands a price of about $55 per barrel today. But 6,000 cubic feet of natural gas-the energy equivalent of a barrel of oil-might cost as little as $3 in Qatar." Picchi also takes note of the vastly larger reserve base of natural gas worldwide versus crude oil. He points to a recent BP Plc report, which estimates global gas reserves at 6,200 trillion cubic feet-67 years of supply at current production rates-versus worldwide crude oil reserves of 1.1 trillion barrels which amounts to about 39 years of supply. Another reason for the rising prominence of natural gas: its superior environmental qualities compared to oil and coal. "Gas has no sulfur or ash and few particulates. Energy users are aware of-and are willing to pay for-these superior qualities. In addition, the enactment of laws and treaties that curb pollution emissions tends to favor gas over other fossil fuels." Also favoring a rising tide of global natural gas usage is the current ability of gas producers to reach markets anywhere in the world economically via liquefied natural gas (LNG) tankers, he points out. Furthermore, "gas processors now have the ability to competitively manufacture transportation fuels like zero-sulfur diesel fuel and jet kerosene using gas-to-liquids (GTL) technologies." The bridge between the current oil economy and a radically new and staggeringly expensive one is likely to be a natural gas economy in which LNG, GTL and other methane-based fuels will fill the existing grid of pipelines, terminals and service stations to service the current stock of vehicles and existing utility plants, he believes. "No renewable fuel could be commercialized without having to scrap our current energy infrastructure." With most major oil companies now well positioned in LNG, the most interesting LNG-related investments currently might be engineering/construction firms like Chicago Bridge & Iron, Fluor, Halliburton and Technip; shippers such as Teekay Shipping; terminal operators like Cheniere Energy and McMoRan Exploration; and utilities with substantial stakes in LNG terminals such as Dominion Resources, El Paso Energy, Sempra Energy and TransCanada, he adds. While GTL is a far newer industry than LNG, it is one with greater growth potential, Picchi believes. This said, only a few energy companies-ExxonMobil, Shell, Sasoil and Syntroleum-have articulated their GTL investment strategies. In addition to these, he cites a small number of engineering/construction and air-separation companies-Air Products and Chemicals, Praxair, Air Liquide and Linde-that are likely to benefit from the rise of GTL. The emergence of this brave new world of natural gas-related opportunities, however, won't be to the benefit of all energy industry players, warns Picchi. "The development of a truly global gas market will create casualties, especially in the North American gas industry whose current high prices could fall when LNG grows to a meaningful share of the U.S. gas supply."
2023-09-22 - Oceaneering intends to use the net proceeds from the offering, together with cash on hand if necessary, to fund the purchase of any and all of its 4.650% senior notes due in 2024.
2023-09-21 - Arclight Capital Partners adds former Vistra Corp. CEO Curt Morgan as senior adviser.
2023-09-20 - LNG developer NextDecade Corp. has secured debt financing to support construction of the company’s Rio Grande LNG export project in South Texas.
2023-09-20 - Hess Midstream will repurchase $100 million worth of units from the company’s sponsors, Hess Corp. and Global Infrastructure Partners.
2023-09-20 - Permian Resources will not receive proceeds from the stock offering.