A Vital Resource: Which Region Has the Most Natural Gas Reserves?
Total global natural gas reserves stand at 6,606 trillion cubic feet, of which 43% are in the Middle East.
Dec. 14 2015, Updated 8:05 a.m. ET
Natural gas in the integrated energy complex
In the earlier parts of the series, we analyzed crude oil demand-supply, reserves, and prices. In this part, we will switch our analysis to natural gas, another major commodity that integrated energy companies explore and produce. Natural gas is also an important feedstock for integrated energy companies’ petrochemical operations.
The Middle East is the primary holder of natural gas reserves
The chart above portrays the distribution of natural gas reserves across the globe in 2014. Total global reserves stand at 6,606 trillion cubic feet, of which 43% are in the Middle East. Iran is the primary holder of natural gas reserves in the Middle East. This scenario is different in terms of distribution of crude oil reserves, where Saudi Arabia has the main portion. Iran, with 18% of the global natural gas reserves and 9% of the global crude oil reserves, occupies a critical spot on the global energy map.
Europe and Eurasia
Europe and Eurasia contain 2,049 trillion cubic feet of gas reserves, representing a 31% share of total global reserves. The Russian Federation contains 18% of global reserves, followed by Turkmenistan, which holds 9% of worldwide gas reserves. The reserve-to-production ratio for Europe and Eurasia stands at 58, signifying the number of years the reserves would last at current production rates.
Other regions hold almost a fifth of global gas reserves
The Asia-Pacific region holds 8.2% of global reserves, led by Australia. Exxon Mobil (XOM) has operationalized an LNG (liquefied natural gas) complex in Papua New Guinea. Chevron (CVX) made five natural gas discoveries in Australia in 2014. CVX has spent ~$8.5 billion on LNG projects worldwide.
South and Central America contain 4% of global natural gas reserves. Royal Dutch Shell’s (RDS.A) acquisition of Repsol S.A’s LNG portfolio in 2014 gave the company access to LNG supply positions in Peru, Trinidad, and Tobago. BP (BP) has an upcoming LNG project in Alaska.
The First Trust ISE-Revere Natural Gas Index Fund (FCG) contains energy companies that mainly derive their revenues from exploration and production of natural gas.