NATURAL GAS COMPANIES YEARN FOR AN INTERNACIONAL REGULATION THAT RESPONDS TO THE GLOBAL ENERGETIC DEMAND.

July 2nd 2008

• Linda Cook demanded the need of new international
agreements that assures the supply
• Meziane confirmed the increase trend in the natural gas
demand in Europe
• Abdullah Sallatt affirmed that the natural gas globalization
is happening in a very fast rithm

This morning the first plenary dealt with natural gas as an emerging global commodity in the energetic mix. The increasing demand of this source places the natural gas as an emerging commodity that it will become more important in a short term. Abdullah Salatt, Senior advisor of the H.E. Minister of Energy and Industry of Qatar; Linda Cook, Executive Director of Shell and Mohamed Meziane, President of Sonatrach were the speakers of this plenary.

Increase of the demand

During the conference all the speakers coincided in considering as significant the general increase of the energetic demand and the particular case of natural gas. Thus, Linda Cook related this increase on the energetic demand basically to two main factors: the increase of the world population and the growth of the global economy.

Abdullah Salatt stated that “all the basic elements for a natural gas globalization are happening very fast”.

In this context, the senior advisor of the H.E. Minister of Energy and Industry of Qatar remarked the fundamental role of the countries which concentrate the most quantity of natural gas, demanding the need of a stable geopolitical in those regions as an essential element for a good energy sector development. Mohamed Meziane insisted in the importance of this energy source: “an 80% of the European strategic planning will be fossil combustible, and a big part of them will be natural gas”.

Globalization of the gas sector

In relation with the obvious growth of the demand, speakers remarked the importance of having an interconnected market, a market which responds to the market fluctuations and not to domestic and restrictive policies. In words of Linda Cook “it is necessary to increase the long term supply international agreements that consolidate the energy sector in the international field”. The Executive Director of Shell explained a number of international projects which are taking place at present, confirming that “demand in a global level requires an increase of the gas natural circular flow”. Mohamed Meziane defended this same way of thinking of favouring the increase of international agreement. He exposed the export estimation of the company he leads: “the aim of Sonatrach is to reach an export rate of 35% and obtain a market quote with a constant growth”.

Challenges for the future

The speakers explained main concerns of the gas natural sector, mentioning the geopolitical risks, lack of flexibility in international covenants or the government commitments about financing systems, due to the high investments that have to be made in these kinds of projects.

Linda Cook explained a series of key issues that have to be faced such as reduction of sulfur emissions, the small number of young people in the energetic sector, and she demanded the lack of commitment by suppliers and contractors, which make harder the achievement of a big amount of projects because of the indiscriminate rise of the prices.

Another capital point was the investment in I+D and new Technologies, with the aim of being able to provide the existing demand in a more efficient way and with better results. Mohamed Meziane pointed that “we should be cautious in the investments, because we could suffer a lack of liquidity. Therefore, it becoming necessary to have long term profitability periods”. Meziane added: “the main concern now must be to be able to coordinate and balance the demand in the natural gas market. Its offer and demand have to be stable for the good of all participants, according to legal safety in both offer and demand".

Linda Cook concluded pointing the need of “choose geographical areas where the conditions for the construction of platforms are easier”. Cook affirmed that “is essential to have a standard international regulation concerning the CO2 emissions".