Evolution of Natural Gas Business Model with Deregulation, Financial Instruments, Technology Solutions, and Rising LNG Export. Comparative Study of Projects Inside the US and Abroad

Abstract

One of the primary energy sources, natural gas is widely used for power generation, industrial production, transportation, commercial buildings, and households. The industry is a capital intensive one for all stages from exploration to delivery. Two types of supplies: pipeline and Liquefied Natural Gas (LNG), recently have faced a direct intra-industrial competition. Physical nature of methane and associated transportation costs lead to domination of so-called "natural monopolies" or "national champions" and strict government regulation, which postponed the development of free trade and competition. After decades of technical innovations and cost curve improvement in LNG sector, increasing global energy consumption, shale boom in the USA, and demand for supply diversification reformulated the role of gas in the global energy balance. While the pipeline sector remains to be in the hands of large corporations and a subject of strategic interstate and international agreements, LNG provides more diversity and flexibility of trade. However, even after a long history of LNG shipment since the late 1950s, this market is still regional with high spreads between countries and terms of delivery. The paper presents the evolution of business models in the natural gas industry, focusing on the primary drivers as government regulation, technologies, and regional markets trends on the way to liberalization and cointegration. Thus, our primary objective is to show relative influence power of these drivers. This analysis also defines the competitiveness of corporate business model under conditions of asymmetric information in regional gas markets, deregulation trends, fast-growing production technologies and downstream infrastructure (specifically in the LNG sector). We also enclose the analysis of the most globally competitive gas projects. We analyze changes in value chain change and trading contracts. Our methodological approach poses model-based principles, including option and contract models, jointly with game theory elements.

Workflow for Probabilistic Resource Estimation: Jafurah Basin Case Study (Saudi Arabia)

“…Moreover, the range of OGIP f ree (7.24~1359.55 Tscf) is much broader than OGIP sorbed (87.38~288.32 Tscf), which shows the higher uncertainty of free gas estimation in shale reservoirs. The ratio of maximum to minimum estimation of the EUR gas doubles OGIP, revealing that the gas recovery factor is the crucial point for the development of the field, according to Equation (5). Comparison of OGIP and EUR con with OGIP illustrates the importance of gas-oil ratio and oil recovery factor, respectively, in resource estimation and economic evaluation.…”

“…Given that the world's regional gas markets are currently awash with relatively cheap liquefied natural gas (LNG) [5], a reconnaissance study by investigators at the King Abdullah Petroleum Studies and Research Center (KAPSARC) has used a World Gas Model to explore whether LNG imports could possibly complement and support other policies and gas development initiatives in the Kingdom [2,6].…”

A comprehensive review of Liquefied Natural Gas (LNG) market dynamics: Analyzing the current trends, challenges, and opportunities in the global LNG market

“…The inception of the LNG industry can be traced back to the mid-20th century, when the first commercial LNG plant was established in Algeria in 1964. This marked a significant milestone, introducing a new form of energy that could be transported over long distances, unlike traditional natural gas (Talipova & Parsegov, 2018). The subsequent decades saw a gradual expansion of LNG trade, with major projects in the Middle East, Australia, and Southeast Asia contributing to the global LNG supply.…”

“…The introduction of new technologies, such as the Q-Max LNG carrier, revolutionized the transportation of LNG, making it more economical and accessible. This era also witnessed the liberalization of energy markets, which facilitated the entry of new players and increased competition in the LNG sector (Talipova & Parsegov, 2018). Gonçalves (2014) provides an in-depth analysis of the turn of the century paradigm shift in the LNG industry.…”

State support mechanisms and the leading renewable energy projects: a Russian experience

“…The obtained results are of practical importa nce and will be used in the development of a methodical approach to risk assessment in RES projects, in assessing the effectiveness of new mechanisms of state stimulation of the sector. The results will also be integrated into the concept of studying competition in the global energy market (Oppong et al 2016;Lisin et al 2017;Lisin et al 2018;Lai et al 2015;Fouquet et al 2008;Gitelman et al 2017;Panepinto et al 2017;Chebotareva 2018b;Talipova et al 2018;Smaliukienė and Monni 2019).…”