Asia to Drive Natural Gas Demand Over Oil: Shell CEO
Despite natural gas prices falling to near 10-year lows last week, Royal Dutch Shell's CEO Peter Voser says demand for gas will be much higher than oil in the long term with the Asia-Pacific region driving the sector's growth.
"I think you cannot travel around Asia at the moment without getting the question, 'can you sell us some LNG (liquefied natural gas)?'" Voser told CNBC on the sidelines of the World Economic Forum in Davos.
"The market (for natural gas) has actually started to dry out. We need new projects to come on stream and a few are coming on in the next few years. But that's not sufficient, we need to invest further," he said.
Low demand and high inventory levels in the U.S. has deterred some companies from future investments, but according to Voser, America's waning demand doesn't reflect what is happening in the rest of the world.
"If you're talking about North American gas, clearly the current price levels are not sufficient to actually bring all the developments forward. You have seen a lot of companies starting to cut their production."
With oil and gas production normally taking seven to eight years to come on stream, Voser says Shell is sticking to its long-term strategy to produce more natural gas.
"We produce more gas in 2012 now, 52 percent versus 48 percent oil," he said. "Clearly Asia-Pacific, that's going to be the driver."