Global demand and supply of natural gas
In this part, we will look into the global demand and supply centers for natural gas. The global supply of natural gas stood at 335 billion cubic feet per day in 2014. Main suppliers were North America and Europe & Eurasia, which constituted 28% and 29%, respectively, of global supply. The United States was a key supplier in the North America region, contributing 21% to the total world production. The Middle East contributed 17% and Asia-Pacific contributed 15% to the total world supply. China, Indonesia, and Australia were the major supply hubs in the Asia-Pacific region.
The United States is the largest consumer of natural gas followed by the Russian Federation. The US and the Russian Federation represent 22% and 12%, respectively, of global gas demand in 2014.
Exxon Mobil (XOM) and BP (BP) produced 11 and 7 billion cubic feet per day, respectively, of natural gas worldwide in 2014. Chevron (CVX) produced 5.1 billion cubic feet per day of natural gas globally in 2014. CVX is likely to witness a rise in gas production from its upcoming Gorgon and Wheatstone projects in Australia. The bulk of Royal Dutch Shell’s (RDS.A) gas production comes from Asia and North America.
Excess demand in the Asia-Pacific zone
The Middle East and Africa regions have a supply surplus. On the other hand, the Asia-Pacific region has a supply deficit. Collectively, China, Japan, and India, constitute 10% of global demand for natural gas. The Asia-Pacific zone consumes 66 billion cubic feet per day of gas compared to the 51 billion cubic feet per day it produces, leading to excess demand of 15 billion cubic feet per day. No wonder integrated energy companies with gas projects in Asia and Australia are targeting the demand in the Asia-Pacific zone.
The PowerShares DB Energy Fund (DBE) invests in futures contracts of energy commodities. It has ~10% exposure to natural gas futures.