Natural Gas Developments EPPM, Bangkok, 9 October 2008 Technical trends, challenges and solutions Issues related to global warming and what are the solutions Role of government and industry Kjetil Tungland, StatoilHydro
2 Natural Gas Developments - Issues Global consumption trends Climate change Role of natural gas Technological trends Role of government and industry
3 This is StatoilHydro Established on 1 October 2007 following a merger between Statoil and Hydro s oil and energy business 31,000 employees in 40 countries Large oil and gas producer with 1.7 million barrels of oil equivalent (boe) per day and 6.3 billion boe in proven reserves The world s largest deep-water operator and the second largest gas supplier to Europe A world-leader in the use of deepwater technology Aworld-leader in carbon capture and storage
Integrated and flexible infrastructure Snøhvit 4 Melkøya Norwegian Continental Shelf 2007 Export pipelines to Germany, Belgium, France and the UK Åsgard Kristin ~ 7.800 km of gas pipelines p Åsgard transport ~ 120 BCM of capacity Ormen Lange Norne Heidrun Haltenpipe Tjeldbergodden Gassled* operated by Gassco, StatoilHydro share 32,1% StatoilHydro is Technical Service Provider and developer for the bulk of the gas infrastructure Statfjord Nyhamna Tampen Link Troll Kollsnes Vesterled Kårstø Sleipner St Fergus Europipe II Ekofisk Europipe I Langeled Norpipe Zeepipe Franpipe Emden/Dornum *Includes Zeepipe, Europipe I, Europipe II, Franpipe, Statpipe, transport related facilities at Kårstø, Vesterled, Oseberg gas transport, Åsgard Transport, Norpipe, Kollsnes, Langeled, Tampen Link Easington Zeebrugge Dunkerque
5 World: Total primary energy demand Demand keeps increasing - Natural Gas increases its share 18000 Mtoe Other renewable Biomass & waste 16000 14000 Hydro Nuclear 12000 Natural Gas 10000 8000 Oil 6000 4000 2000 Coal 0 1980 2000 2005 2015 2030 Source: IEA WEO 2007 Reference Scenario World
6 Human GHG emission trends Gigatonn nes 90 80 70 60 50 40 30 S2 S1 27 Gt 20 10 0 1970 2004 2030 *) IPCC FAR, WG III, 2007. S1 and S2 are two of IPCC s emission projection scenarios
7 Global CO 2 emissions 2 Mt 40000 Gas 30000 Oil 20000 10000 Coal 0 1990 2005 2015 2030 Source: IEA WEO 2007 Reference Scenario World
What can we do? 8 ENERGY EFFICIENCY REDUCE CONSUMPTION MORE EFFICIENT ENERGY USE MORE EFFICIENT ENERGY CONVERSION TOOL-BOX GLOBAL WARMING MITIGATION ENERGY SWITCHING from COAL & OIL to NATURAL GAS & HYDROGEN RENEWABLES CO 2 -STORAGE NUCLEAR POWER
9 EU s Climate Change Targets for 2020 20% less climate gas emissions 20% renewables 10% bio fuels 20% more energy efficient Source: Council Conclusions March 2007
10 Emissions effect of gas Illustrative Example 2. New coal plant reductions 3. Gas switch reduction Significant CO 2 reductions from new plants A cleaner alternative to coal An important part of reaching the EU s climate goals 4. New CCGT emissions 1. Old coal plant emissions Source: Deutsche Bank
11 The future of gas in power generation steady increase 7000 6000 5000 4000 3000 Mtoe Other renewable Biomass & waste Hydro Nuclear Natural Gas Oil 2000 1000 Coal 0 1990 2005 2015 2030 Source: IEA WEO 2007 Reference Scenario World
12 World: Primary natural gas demand Bcm 3 000 Increasing demand in developing countries Over 1000 bcm demand increase 2000-2015 2 000 Developing countries Transition economies 1 000 OECD 0 2000 2005 2015 Source: IEA WEO 2007 Reference Scenario World
13 Natural gas - World proved reserves Source: BP Statistical Review 2008
Increasing the need for intercontinental transportation 14
15 Key technology themes in the gas value chain Exploration & Production Liquefaction & Transportation Final consumption Find and produce - More, - Cheaper Transport - Longer, - Cheaper Consume - More efficient, i - Cheaper?? Emissions: Capture and Store
16 Find and produce more gas - cheaper Master harsh environments Locate and understand the formations Optimal drainage for maximum recovery, Technologies for complicated reservoirs
17 Transport the gas longer - cheaper Long distance pipelines Liquefaction and shipping - Floating LNG, GTL Integrated development and operations
18 Increase efficiency in use capture and store residual emissions
19 Role of Government and Industry A complicated challenge No Electricity Vulnerable Water Shortages Scarce Electricity Future Water Vulnerability FSU OECD OECD 300 300 mill 1.1 billion 0.0 1.0 2.0 2.7 3.0 4.0 5.0 6.0 6.4 Global Population (billion) Source: WNA 2006
Indicative cost comparisons - Who pays for the conversion? 20 Fuel Opex Capex HFO Gas Oil Coal Natural Gas Future alternative?
21 Different roles Government International commitments, treaties, commercial framework National implementation Directives Incentive schemes Promotion and support for new technology and solutions Right of way Intergovernmental cooperation / agreements Industry Corporate Social Responsibility New technology Reduced costs Higher efficiency i Break through alternatives Commercial solutions Cooperation Balanced sharing of risks
22 The path ahead The future will be fossil, but emissions must, and can, be reduced Natural gas can serve as a bridge to low carbon emissions A complex mix of approaches Social policies Economic policies Technological development Cooperation is key Government to Government Business to Business Government and Business