Introductory comments made by International Gas Union President, Professor Joe M Kang at the World Petroleum Congress session “Gas Mega Projects”, Houston, Texas, 6 December 2021

Good afternoon to everyone. My name is Joe M. Kang, President of IGU.

It’s an honour to be here to engage such a knowledgeable audience and to moderate a panel with the most significant and influential energy players in the world – either as supply players in the case of Chevron, Exxon & Total, or the global demand player, Petronet of India.

Please allow me a few brief words about the IGU. The IGU has approx 160 members, 90 charter members and 70 associate members representing 98% of the global gas value chain from production to end user We are the Global Voice of Gas.

When I introduce each panelist please welcome them warmly.

• Nigel Hearne, President, Chevron Eurasia Pacific Exploration and Production Co.
• Peter Clarke, VP LNG, ExxonMobil, USA
• David Mendelson, Senior Vice President Americas Division E&P Management Committee Member, TotalEnergies
• Akshay Kumar Singh, MD & CEO, Petronet LNG Ltd, India

We will come to the thoughts of the panelists in a few minutes – but first, I’d like to put the subject of our session into some context.

Gas mega projects are fiendishly complex on an engineering basis, exceptionally capital intensive and are often put at risk due to a lack of long term clarity and short term volatility. However, they exist because of the near existential nature of gas to 21st Century human existence. Crucially gas today and gases tomorrow are fundamentally more effective across the energy triennium challenges when compared against than the alternatives.

At the IGU, we sum this up with the belief that natural gas today, and tomorrow, a portfolio of natural, decarbonised and renewable gases will be the catalyst for and foundation of a more sustainable global energy system.

Until there is a new energy technological revolution that fundamentally changes the equation, our core message must be “gas works” – it is this understanding and concept that encapsulates why gas megaprojects exist.

I’ve been positive up to now. We are all aware that there are some major challenges that must be considered – if we want to realise the value of gas mega projects and avoid the often mentioned “stranded asset” issue. I’d like to talk about some of the challenges that we all face in the gas value chain and how we must work together to demonstrate the value of our work.

I believe that we currently face something akin to a “perfect storm”.

Due to a shift in policy in a number of global centers, environmental and emissions policy has become vital to the global energy dynamic. One part of the trilemma – environmental – appears to have been prioritized by the global policy, regulatory and financial élite. When combined with the effects of COVID, which shut demand for energy, the argument for a more aggressive energy transition has become more prominent.

This has led to an apparent restriction on certain energy sources. What we used to call “hydrocarbons” are now called “fossil fuels”. What used to be “natural gas” is called “fossil gas”. Gas’ inherent advantages are deliberately overlooked due to the perceived need to decarbonize at almost any cost.

This perception has led to a greater challenges for global gas mega projects. There is a perceived risk on both policy / regulation and therefore capital liquidity provision that has led to a certain amount of delay on either FID or further development of multi TCF projects. Projects which are vital to drive sustainable development across the world.

I firmly believe that this is a major driver for the current global energy price volatility that we face. Markets are reacting as they are meant to – post COVID recovery increased demand without a similar increase in supply liquidity means that prices will go up.
I hope that this will be recognized by our shared core stakeholders and that the necessary strategic investments will be more welcome – thereby increasing liquidity and calming markets down.

But for now, let’s calm down a little. Let’s move away from the challenges and back to the positives – why we must manage the perceived risks and jointly engage with our stakeholders

If the world is concerned about pollution, we must demonstrate that natural gas is part of the solution

Natural gas can be a major positive catalyst for a cleaner environment through fuel switching from dirtier fuels. Fuel switching to natural gas alone can deliver a reduction of 5.5Gt (13%+) in energy sector CO2 emissions, and drive air pollution down globally. The climate debate should be seen as a positive driver for natural gas demand. There is a uniquely harmonious relationship between natural gas and renewables. Natural gas is the ideal partner for renewable energy, which should also be seen as a driver for natural gas demand.

Gas as a driver of socio economic and industrial value in the developing world

Much of the developing world suffers from a significant energy poverty crisis. The IEA suggests that 1.6 billion people in developing Asia have no access to clean cooking facilities. That is roughly 20% of the world’s population. Nearly 10% of population in Central & Southern Asia lack reliable electricity access. This creates a brake on regional socio-economic development. There will be more than 2 billion additional people living on the planet by 2050, which much of that growth coming from the so-called developing world.

Much of Europe, North America and Asia have benefitted from gas’ unique properties. Gas is and will remain the foundation of the developed world’s energy system. Why should the developed world benefit from industrialization and deny the benefit to the rest of the world?

As I have heard many times in Africa and Asia, “we are committed to transition, but we must define our own transition”

Clean air

Enhanced use of gas today in industrial and domestic environments could drastically cut air pollution and thereby reduce 7 million deaths pollution caused every year. It would immediately improve quality of life and public health by cleaning up the air and environment.

This is not a developed vs developing world situation. Contact lens and glasses wearers that go to Europe where there is lignite and coal fired power will know how much filth there is in the air – there will be a nasty sediment next to their eyes at the end of the day. The same pollution will be in your lungs.

From Bogota to Bejing, to London to Istanbul to Morbi in Gujarat, we have seen gas switching clean the air and make peoples lives better.

Ladies & Gentlemen.

As you can see, there are many reasons to be positive about gas demand and how we can promote its unique attractive characteristics today and far into the future.

And now its time to hear the views of our panelists. We are going to do this in alphabetical order, so no one can accuse us of favoritism!

Post session comments:

As we look forward to next year, I would like to invite all of your to join us at the IGU’s World Gas Conference, to be held in the City of Degu in May. We look forward to continuing the debate within the gas value chain as to the most efficient and successful strategy and to positively engaging with our mutual stakeholders to continue to demonstrate that gas is the catalyst for and foundation of a more sustainable global energy system for a very simple reason. Gas Works.