The Gas Exporting Countries Forum
IHS CERAWeek has long been regarded as the industry standard for high-level energy conferences and the recent conference held in Houston, Texas provided delegates with access to an impressive number of energy executives from around the world.
One of those executives was Leonid Bokhanovsky, Secretary General of the Gas Exporting Countries Forum (GECF), who presented an address at the Ministerial Dialogue session on Wednesday, March 6, 2013. Mr. Bokhanovsky began his address by describing the strategic role that the GECF plays in the global gas market and the growth of the GECF that has taken place in recent years with the accession of Oman and the United Arab Emirates as new members of the now 13-member organization.
Source: Presentation of Leonid Bokhanovsky, IHS CERAWeek 2013
For an organization that has often been referred to as the “Gas Opec,” Mr. Bokhanovsky’s presentation seemed designed to shift the public’s perception of the GECF from that of a cartel shrouded in secrecy to a more positive image of a primarily research based organization focused on dialogue and transparency as it promotes the interests of its members which collectively control 62% of the world’s natural gas resources and 64% of the world’s LNG trade.
Source: Presentation of Leonid Bokhanovsky, IHS CERAWeek 2013
In this regard, the fact that Mr. Bokhanovsky was even at IHS CERAWeek is notable and indicative of the GECF trying to play a more active role in the discussions regarding the growing and evolving global gas markets.
After highlighting some of the key developments taking place within the GECF, Mr. Bokhanovsky noted some of the major developments in the natural gas markets and industry, including the continued expansion of unconventional gas production in North America and impending LNG exports from that region, as well as the fragile state of the global economy, the expansion of renewables, and various advances in upstream and downstream technology. He referred to these developments as a “multiplicity of market factors as well as a multiplicity of opportunities.”
Mr. Bokhanovsky closed his prepared remarks by outlining projections of rising global gas supplies that include recent conventional finds in East Africa as well as expectations for the expansion of unconventional production in other regions over the long term, reminding everyone of the substantial challenges that lie ahead regarding this endeavor.
During the question and answer session, David Hobbs, Senior Associate, IHS, and Head of Research at KAPSARC, asked Mr. Bokhanovsky his thoughts on the globalization of gas markets around the world. Mr. Bokhanovsky said that despite all of the growth in global gas supply, liquefied natural gas (LNG) production and shipping capacity, and pipeline expansions, transport costs have also continued to rise and would likely constrain gas markets from becoming as globalized as oil markets, at least for the short to medium term.
Regarding potential LNG exports from North America, Mr. Bokhanovsky said that he believed the United States is likely to become an important player in LNG markets but that domestic energy security concerns and opposition from the petrochemicals industry would pose serious barriers to future US LNG exports.
Mr. Bokhanovsky closed the session by pointing to 2013 as an important year for the GECF, particularly as it prepares for the second GECF Gas Summit, which will be held during July in Moscow and chaired by Russian President Vladimir Putin.
By Susan L. Sakmar - Law professor, attorney, and author of the forthcoming book “Energy for the 21st Century: Opportunities and Challenges for Liquefied Natural Gas (LNG),” available at Edward Elgar, Ltd., (UK Pub.), http://www.e-elgar.co.uk/bookentry_main.lasso?id=14131.