Winning the award and attending the IGU World Gas Conference (WGC2006) in Amsterdam was a great opportunity for me to keep up to date with global issues facing the gas industry. I came away with not only a renewed sense of optimism for the future of gas and the promise it holds for Australia, but also with a determination to stay involved with the IGU.

I am now a member of IGU Working Committee 4 and in the triennium 2006-2009 will attend biannual study meetings to review strategies and best practice for asset management, leak reduction and prevention of third party damage.

The conference confirmed that it is the right time for Australia to increase involvement in international issues, being remote from the rest of the world. I aim to raise awareness of the Australian gas industry by incorporating knowledge from the Australian gas transmission network, liaising with the Australian Pipeline Industry Association (APIA), incorporating asset management modelling work conducted by GHD, and presenting a paper at WGC2009.

IGU is a worldwide non-profit organisation with 67 member countries, and AGIT is the Australian Chartered Member. AGIT was established in 1999 by the Australian Gas Association as a fund to pursue educational activities with the Australian gas industry. Its objectives are to contribute to the advancement of study, education and research in fields related to gas utilisation and application development, recognise and support excellence in those fields and promote an understanding of the gas industry. In particular, AGIT awards prizes for excellence, provides financial assistance to those studying or undertaking research, contributes to individuals’ personal and professional development and disseminates information through conferences, lectures and publications.

Each year AGIT conducts an Overseas Study Tour and ‘Gas Speak’. AGIT also invites individual expenditure proposals from organisations involved in the Australian natural gas industry on projects consistent with its objectives. Further information on these events can be found at www.agit.org.au

WGC2006 was attended by 4,000 delegates from 88 different countries and attracted a high calibre of speakers and delegates – including senior representatives from major companies such as Shell, Gazprom, Chevron, Petronas and Qatargas, as well as Government leaders and academics.

The conference confirmed that the global gas industry has a positive outlook, with worldwide growth estimated to be over 2 per cent annually, and proven reserves in place for at least 65 years, peaking by 2040. Technological developments have allowed production from more difficult locations, and transportation of gas over longer distances is now achieved with larger LNG shipping volumes and longer pipelines.

Gas has several advantages over other fuels. However, while its price remains linked to oil, gas will continue to face competition from cheaper, cleaner fuels or those with unrestricted markets such as ethanol, nuclear power and gas-to-liquids. The challenge of constructing the complex facilities required to meet volumes and timing of market demand is tough.

Global dynamics are changing, with significant impacts: Russia, Iran, Qatar and Saudi Arabia currently dominate supplies; UK and the USA are experiencing steeply declining reserves; and Brazil, China and India are emerging as major new economies with high energy demands.

At the conference, LNG was viewed as a key solution to gas shortages and transportation. Currently, pipelines sell three times the volume of LNG, but LNG transportation is increasing fast with predictions that 80 per cent of gas will be imported as LNG by 2040. Qatar, Russia and Australia are expected to dominate the supply chain.

Qatargas, with 9 per cent of global gas reserves, is investing in 7.8MMt/a LNG trains and 60 QMax/Qflex tankers to transport 77 MMt/a LNG by 2010 and is targeting more Asia-Pacific customers.

Russia holds an increasingly dominant position in Europe and is positioning itself to supply the USA with LNG — in direct competition with the Middle East. Gazprom, which controls 25 per cent of global gas reserves, stated that its production is limited only by demand and the challenge of increasing exports and building new pipelines in time. Gazprom is installing 20 per cent more pipelines, which amounts to 26,000 km with 137 compressor stations. Current pipeline projects include the dual 1,200 km North European Gas Pipeline, 198 km Baltic Sea Offshore Pipeline, and the recently constructed 1,250 km Bluestream Pipeline, which achieved the deepest 396 km offshore Black Sea crossing at 2,150 metres water depth. Gazprom is also looking to connect with China, Kazakhstan and Turkmenistan.

A major concern throughout the conference was the influence of regulation on security of supply and investment, with a new global gas sellers’ market emerging with only a few dominant players. Energy policies and regulatory regimes need to be adapted to new business environments and incorporate more efficient trans-national coordination. Further investment needs to be encouraged by implementing innovative coordinating mechanisms for long-term contracting, third party access and liberalised markets.

Interestingly, a global survey carried out by IGU found that 38 per cent of companies viewed regulation as their most important issue and, in response to the question “What makes effective interaction between market players and regulators?” respondents answered 1) transparent policies, 2) open dialogue and 3) quality of expertise. Importantly, companies felt that regulators could affect up to 50 per cent of project value, whilst regulators felt they would not influence more than 25 per cent — indicating that regulators are unaware of their influence on gas projects. A challenge is for regulators to recognise that LNG is different from oil and adapt policies to suit; oil can change hands up to 25 times, whereas LNG is a fixed line of supply, like a pipeline. LNG also involves high technical complexity with project risks and is regarded as more risky than a pipeline venture.

After the conference I visited the 35 km offshore and 80 km onshore sections of the North Holland 48 inch Grijpskerk-Workum-Wieringermeer pipeline construction as a guest of Nacap. In contrast to cross-country pipelines in Australia with minimum complexity, where lay rates up to 3 km per day are typical, installation of the 80 km onshore section was scheduled to achieve only 300 metres per day: Holland is densely populated and this short section included 8 HDD, 12 microtunnel, 60 auger bore, 15 wet sink and 500 minor canal crossings.

I am very grateful to AGIT for the award, GHD for generous funding for my ongoing IGU involvement, Nacap for being my host in Holland, and APIA for supporting my Committee involvement.