What Is Natural Gas?
Dismissed as a useless byproduct of crude oil production until the second half of the 20th century, natural gas now provides 23 percent of all energy consumed in the world. And the demand is growing.
An economical, environmentally friendly and efficient energy source, natural gas is the cleanest-burning conventional fuel, producing lower levels of greenhouse gas emissions than do heavier hydrocarbon fuels, such as coal and oil. Historically, natural gas also has been one of the most economical energy sources. Natural gas fuels electric power generators, heats buildings and is used as a raw material in many consumer products, such as those made of traditional plastics.
The International Energy Agency predicts that the demand for natural gas will grow by more than 67 percent through 2030. Chevron is well positioned to meet this escalating demand.
What Chevron Is Doing
Natural gas is a growing segment of Chevron's energy portfolio. Our natural gas resources span six continents, including significant holdings in Africa, Australia, Southeast Asia, the Caspian region, Latin America and North America.1 Chevron has a net production of more than 5 billion cubic feet of natural gas per day including equity shares in affiliates, and we expect to substantially increase this volume over the next decade.
Although world gas resources are plentiful, the regions with natural gas surpluses are often oceans away from the greatest demand. Chevron has the capabilities to meet the challenge of developing resources and delivering natural gas to markets where its use is growing. Chevron uses the latest technologies to develop the full spectrum of natural gas products, from conventional pipeline gas to liquefied natural gas (LNG) to gas-to-liquids (GTL).
We have a highly integrated gas business with expertise in every aspect of developing natural gas – exploration and production, liquefaction, shipping, regasification, pipeline operations, gas marketing, power generation, and GTL technology. Our Global Gas organization is focused on commercializing our natural gas resources while pursuing growth opportunities.
In the regions where Chevron has significant gas resources, it is pursuing projects to build liquefaction facilities that will cool natural gas into a liquid so it can be shipped safely in specialized tankers to growing markets. We are a longtime participant in Australia's North West Shelf Venture, which ships LNG to customers in Japan, South Korea and China. Chevron also supplies natural gas to LNG processing facilities in Point Fortin, Trinidad, and in Bontang, Indonesia.
Working closely with host governments and partners, Chevron is pursuing two major LNG supply projects in Africa: the Angola LNG project, which is under construction, and Olokola LNG in Nigeria, where technical and commercial work is under way. Chevron holds a 36.4 percent interest in Angola LNG and a 19.5 percent interest in Olokola LNG. Chevron is leading the development of the extensive Greater Gorgon Area gas fields offshore Western Australia. The Gorgon project involves a proposed LNG and gas processing facility on Barrow Island. The company also plans to develop an LNG project on the northwest coast of mainland Australia based on its Wheatstone natural gas discovery.
As supply projects move forward, Chevron is securing capacity in LNG receiving and regasification facilities. At these facilities, the liquefied natural gas is heated to return it to its gaseous state so it can be delivered to customers through pipeline systems. The company has secured capacity at the Sabine Pass LNG receiving facility in Louisiana, which was completed in the second quarter of 2008.
Chevron also is developing a GTL business as another alternative for commercializing gas resources. The company is pursuing opportunities in several countries in GTL technology to create synthetic diesel fuel, lubricant base oils and naphtha from natural gas. GTL diesel delivers higher performance and lower environmental impacts than traditional diesel fuels. Oil refiners can blend GTL diesel into conventional diesel, increasing the supply of fuel that meets stringent air-quality rules.
In addition, Chevron is partnering with the Nigerian National Petroleum Corporation to construct a GTL plant in Escravos, Nigeria. Located next to Chevron's Escravos Gas Plant, the new facility is expected to convert 320 million cubic feet per day of natural gas into 34,000 barrels per day of GTL diesel fuels, GTL naphtha and liquefied petroleum gas.
Numerous pipeline projects also are a part of Chevron's efforts to deliver natural gas to growing markets. The West African Gas Pipeline, for example, will transport Nigerian natural gas over 432 miles (678 km) to customers in Ghana, Benin and Togo. Chevron holds a 36.7 percent interest in the project, which shipped first gas in December 2008.
Through its global gas business, Chevron will continue to find, develop and deliver natural gas to meet the rising demand for energy.
1The rules of the U.S. Securities and Exchange Commission (SEC) permit oil and gas companies to disclose in their filings only proved reserves. Terms such as "resources" are not permitted to be used in filings with the SEC. U.S. investors should refer to disclosures in Chevron's Annual Report on Form 10-K for the year ended December 31, 2007.
Updated: March 2009