TRIBUNE NEWS NETWORK

DOHA THE global energy consumption grew by 2.5 percent in 2011 to the equivalent of 247m barrels of oil a day, shows an analysis of the energy sector by QNB Group. The share of gas and non-hydrocarbons in total consumption was almost identical a decade ago.

Oil’s share has fallen by a corresponding percentage i.e. 6 percent.

The volume of LNG traded grew at a rate of 8.8 percent a year over that period, more than triple the rate of overall energy consumption.

The growth in the LNG trade is demonstrated by the increasing number of countries involved in exporting or importing it. At the end of 2011, there were a total of 24 LNG liquefaction plants in the world with a rated capacity of 278mn tonne per year. The actual volume traded increased by 20.7 mt (9.4 percent) to 240.9mt, with two-thirds of the increase coming from Qatar and the remainder from Yemen and Peru. Qatar exported 74.8mt in 2011, 31 percent of the global LNG supply.

At the other end of the chain were 89 re-gassification terminals across 25 countries, with a combined capacity of 640mt/y, up 6.5 percent during 2011.

In other words, the theoretical demand capacity is 2.3 times the currently available supply. A decade ago only 12 countries had re-gassification terminals.

However, LNG contribution is still small compared to oil. Around 6mn barrels oil equivalent of LNG was traded every day in 2011, meeting about 2.4 percent of global energy usage, but this is barely a tenth of the energy content of the oil trade. The oil figure is 55m barrels a day, including both crude oil and condensates from gas fields, according to data just released in British Petroleum’s annual Review of World Energy.

Oil itself remains the largest source of this energy, providing a third with coal and gas close behind. Non-hydrocarbon energy sources—nuclear, hydro and other renewable energy—together meet only 13 percent of the demand.

International trade in hydrocarbons currently meets 35 percent of the world’s energy needs. Within this, the growth in the LNG trade is one of the most significant developments of the last decade.

The proportion of hydrocarbons that are traded, rather than consumed in their countries of production, is large and rising. This is because there is a mismatch between the location of hydrocarbon reserves and the demand for their usage. The largest net demand is in Europe and East Asia, while much of the supply of oil and gas comes from the Middle East, Russia and Central Asia.

Oil is the most heavily traded hydrocarbon, both in energy terms and in proportion to its production. In 2011, 62 percent of oil pumped from the ground was exported, up from 57 percent a decade ago. Only 31 percent of gas produced is traded, roughly a third of it as LNG. This is partly because infrastructure required to ship LNG is more expensive than the equivalent established systems for transporting oil. However, improvements in LNG technology in the last decade have reduced the trading costs.

Coal is the least traded hydrocarbon, comprising only 14 percent of traded energy. This is because it is expensive to transport and because the bulk of global coal reserves are located in countries which need it to meet their own domestic energy demands, particularly China and the US.