The gas sector differs from the electricity sector in that not every country produces or uses gas, natural or manufactured, whereas every country generates and uses electricity. The transport of natural gas requires enormous investment with pipelines covering great distances, sometimes thousands of kilometers, or conversion plants and shipping for liquified natural gas (LNG). 21.7% of gas produced in 2000 was traded internationally, a ratio which is consistent with the industries manufacturing products in the energy sector.
This report is concerned with the 73 countries which are significant producers or significant consumers of natural gas. 43 of these countries produce natural ags and 66 consume it. 7 of the producing countries are not significant consumers. The natural gas industry is relatively young compared with the other energy industries, coal, electricity, oil or manufactured gas. There are countries covered in this report which are significant producers but are only beginning to consume gas themselves. A few small consumers rely on shipped LNG requiring no high pressure transmission pipeline systems but only low pressure distribution pipes.
There is wide variation in the uses of natural gas and this has a bearing on the opening of markets. There is no point setting up a mechanism to gice free choice to domestic users in a market which hardly has any, where usage is entirely industrial or for power generation.
The liberalisation of the energy markets involves three basic processes; privatisation, unbundling and market deregulation. These may or may not all be applied in one country, depending on the model of liberalisation which is adopted. Privatisation is not the same as deregulation and either of them can be carried out independently.
An industrialised country with a mature infrastructure and strong industrial off-take has different needs from a developing country. Unlike electricity, natural gas is not necessarily available locally. With the switch from town gas, manufactured from coal and distributed locally, to natural gas piped over long distances from the wellheads, the gas industry followed a pattern more similar to the electricity sector. Large-scale transport became a very significant element of the industry. Four large companies supply nearly half the gas used in Western Europe and about half of Europe’s gas is transported through the pipelines of the leading German gas company, Ruhrgas. Liberalisation of the industry has been slower and is currently less advanced than for electricity, although comparable principles of privatisation, unbundling and market opening are being applied.
From the NRG Expert Historical Data Series