taking the long view on LNG
October 27, 2015 - Despite the current environment, the energy industry must retain a long-term perspective and continue to invest in liquefied natural gas (LNG) projects to keep up with growing global demand, Pierre Breber, executive vice president of Chevron Gas and Midstream, tells an audience at the Gastech Conference & Exhibition in Singapore on October 27. Breber notes, the U.S. Energy Information Administration (EIA) projects global energy demand to grow 40 percent by 2035, with demand for natural gas expected to grow by 50 percent over the same period.
Pierre Breber, executive vice president of Chevron Gas and Midstream, speaks during a panel discussion at the Gastech Conference in Singapore.
Gastech brings together more than 2,000 international delegates to confer over key issues impacting the global energy business, with particular focus on natural gas and LNG demand in Asia. Breber participates alongside other prominent representatives from the global natural gas supply chain in a panel discussion titled “What will be the impact of lower oil and LNG prices on LNG buyers and sellers over the next five years?”
Breber notes that rapid changes from a seller’s market to a buyer’s market happen regularly in the energy industry, which is the reason our capital-intensive business focuses on long investment cycles. “Inevitably, when projects start up and supply comes online, years after investment decisions were made,” Breber says, “the world looks different from what buyers and sellers had forecast.”
Breber notes that the current buyers’ market has created rising interest for LNG across Asia, as well as in the Middle East, Europe and South America. And yet, he warns, “We’re seeing a number of LNG projects slowed, or even put on hold, as investments critical to ensuring affordable and reliable energy supplies are deferred.”
He adds, “This is a trend we must not overlook.”
Gill Riggs, Chevron Asia Pacific Exploration and Production Company’s general manager for human resources, also participated in Gastech, as part of a panel on “Championing Women in Energy.
Considering the projected growth in overall global energy demand, Breber says, “The world is going to need all forms of energy – natural gas, crude oil, coal, renewables and nuclear – as people everywhere reach for affordable and reliable energy to drive both economic growth and improved living standards.” Breber adds, “Our industry must continue to grow supplies, particularly of natural gas.”
He notes that natural gas will show the most rapid growth as many countries count on imports of the fuel to meet domestic demand. And, he states, “Ensuring there is sufficient LNG supply is going to be challenging.”
Meeting this challenge will require a partnership between buyers and sellers, as well as the support of host governments. “LNG can only be sourced if host governments enable the development through mutually beneficial financial, social and environmental terms and conditions,” says Breber.
Freeman Shaheen, general manager for Global LNG Supply and Trading, appeared in the conference as session chair of a discussion of gas and LNG in the future Asian fuel mix.
In weighing the funding of these projects Breber notes, “Producers will need to drive down the costs of their projects, and buyers will need to keep an open mind that low prices today won’t last if long-term supply does not keep up with demand.”
“Getting the best outcome will require keeping a focus on innovation and strong partnership,” Breber concludes, “as well as a long-term perspective that recognizes energy markets are the largest and most efficient in the world and can move in two directions.”
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Published: October 2015