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World Gas Conference 2018: The major challenges of natural gas

Presented by: Total

Every three years, the International Gas Union organizes the World Gas Conference. It's a perfect opportunity to highlight the relatively unknown financial and environmental advantages of this resource, a fairly recent newcomer in the history of global energy. The event is also an opportunity for Total to reaffirm its commitments to gas, the cleanest fossil fuel, and share the strategy underpinning its ambition to become the responsible energy major.

The 27th World Gas Conference (WGC) took place in Washington, D.C., from June 25 to 29, 2018. Organized by the International Gas Union, which brings together more than 150 members accounting for over 97 percent of the global gas market, its aim is to promote this resource as the cornerstone of a global, sustainable energy system.

The fact that the event was held in the United States is highly symbolic, since the country is the world's largest consumer and producer of gas today. In 2016, the United States produced 749.2 billion cubic meters1 of gas and consumed 778.6 billion. Faith Birol, executive director of the International Energy Agency (IEA), calls this rise of LNG America's "second natural-gas revolution," after shale gas. According to the IEA, more than half of the increase in North American gas production could be exported as LNG by 2022. This would make the United States one of the world's biggest LNG exporters, alongside Australia and Qatar.2

The U.S. is a heavyweight in today's global gas landscape, as Total's Chairman and CEO, Patrick Pouyanné, emphasized just before the event kicked off: "It is highly symbolic that the WGC is taking place here, in the United States, […] one of the world's key exporters of LNG." He also mentioned that North America was the main beneficiary of "the shale gas revolution. […] 10 years ago, the forecasts were that it would have to import LNG."

The biggest change since the 2015 conference in Paris, France, is the reversal between what was then a surplus in LNG supply, and demand, which has since risen, particularly in countries that weren't previously importers, such as Bangladesh, Pakistan and Egypt.

The priority, however, is to continue to focus on demand. Natural gas has yet to find its place in the global energy mix, because it is still competing with cheaper fuels, such as coal, that have a greater environmental impact.

From 'oil and gas' to 'gas and oil'

The WGC is a must-attend event. Since 1931, it has been the global gathering of natural gas industry stakeholders to discuss the sector's issues, opportunities and prospects — and challenges too. For five days, influential leaders, policy-makers and experts in the gas industry shared their insights and vision of the gas market.

All of these reasons explain why Total wanted to be present and visible. The French company has invested in the gas industry since the 1970s, when the perception of gas changed from a "dangerous compound that disrupted oil production" to a usable resource. Today, Total is a major operator in liquefied natural gas (LNG) and pursues a proactive strategy in the sector, aiming to supply cleaner, more reliable and affordable energy around the world. As Patrick Pouyanné, the chairman and CEO of Total, pointed out: "Developing and promoting gas is a key focus of our strategy. As we will move from a little less than 50 percent production share in our upstream portfolio to a 60 percent share over the next 20 years, I think that an 'oil and gas' major like Total will be known as a 'gas and oil' major." Duly noted.

Total took advantage of the WGC 2018 to talk about its commitments to natural gas. These include being an integrated, world-class player across the entire value chain, from exploration to marketing, acquiring an estimated market share of 10 percent by 2025, and continuing to advocate, especially in developing economies, for gas as a smart choice in economic, technological and environmental terms, in order to lower the share of coal.

LNG bunker in Singapore

Total announced at the WGC that it had signed a Heads of Agreement with Pavilion Energy to jointly develop a liquefied natural gas bunker supply chain in the Port of Singapore. The agreement covers the shared long-term charter of a new generation bunker vessel to be commissioned by Pavilion Gas in 2020. It also includes an LNG supply arrangement that will enable Total to deliver LNG bunker to its customers.

The increasing use of LNG bunker is workable solution to the International Marine Organization's (IMO) decision to cap the sulfur content of marine fuels beginning in 2020. Not only does LNG bunker produce no sulfur oxide, but it is also a readily available, competitive solution that contributes to the IMO's long-term strategy, announced in April 2018, to reduce shipping's greenhouse gas emissions.

Argonauts, the ARGOS Challenge winner, displayed at the Total stand

Designed and financed by Total, the Autonomous Robot for Gas & Oil Sites (ARGOS) Challenge was organized in partnership with France's National Research Agency (ANR). In 2014, five international teams were selected as finalists from more than 30 research projects. Argonauts, a team of two partners — Austrian start-up Taurob GmbH and researchers from Germany's Technical University of Darmstadt — was selected in May 2017 to develop the first autonomous surface robot for oil and gas sites.

Total has teamed up with the Oil & Gas Technology Centre (OGTC) to test the robot at a Total site in the United Kingdom this fall.

A functioning prototype, which meets the complex requirements of the modern oil and gas industry, is weather-resistant, ATEX-certified3, and capable of independently performing inspection rounds, detecting malfunctions and responding to emergencies, was on show for visitors to the Total stand.

A round table on the major challenges of gas

The Washington, D.C. conference was also an opportunity for Patrick Pouyanné, Total's CEO, to take part in a round table discussion on "The Biggest Challenges and Opportunities Facing the Global Gas Industry." Speakers discussed the challenges that gas must overcome to quickly become the transition energy from fossil fuels to renewables.

To stay on track with the decarbonization commitments made at the Paris COP21 in 2015, natural gas must be chosen over cheaper fuel such as coal. "The gas industry faces a pushback," said the Total CEO. "This raises the risk of a huge mistake for the world." A mistake that could cost the planet a few more degrees' warming by the end of the century.

"In the race to reduce emissions, we must make the case for gas to reduce doubt. We need to educate people about its benefits," said Bob Dudley, group chief executive of BP. Bill Cassidy, a United States Senator from Louisiana, added that: "[…] in the political process, there will be a need to convince others that gas is key to a low emissions future, and support is required from the private sector."

Speakers also highlighted that methane emissions, through increased efficiency and technology, are a critical emerging battleground. A study published recently by the United States Environmental Protection Agency (EPA) revealed that these emissions are much higher than previous estimates showed. "Natural gas' future is not a given, we must advocate it, take methane into the question. We must take the whole production chain into consideration, be more cautious, and take it more seriously," Patrick Pouyanné added in conclusion.

By looking further into the future, the question to ask is whether gas will survive in a low-carbon world. In Europe, greenhouse gas emissions must drop by 95 percent to achieve the Paris Agreement target. It's a far-off challenge, but we must start addressing it now. And before the next WGC in 2021, to be hosted in Daegu, South Korea.

1 Source: BP Statistical Review of World Energy June 2017.

2 Qatar, Australia, Malaysia, Nigeria and Indonesia are the world's main LNG exporters, accounting for more than two-thirds of global LNG supply.

3 European Union Directive 2014/34/EC on the harmonisation of the laws of the Member States relating to equipment and protective systems intended for use in potentially explosive atmospheres (recast), as defined by ATEX Directive 99/92/EC.

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Photo: Total