The natural gas business of the future is tied to three things:assets, knowledge and its customers, and the companies that knowhow to merge the three successfully will rise above the crowd,Linda Cook, CEO of Shell Gas and Power, told delegates last week atthe GasTech 2000 conference in Houston.

Historically, said Cook, natural gas companies have beenasset-based. However, the value of knowledge has increased, alongwith the needs of the customers. None of the three operate alone,and without all of them, a company will not succeed.

“Asset success was an early driver, and the asset game is stillfundamental,” said Cook. “It takes substantial capital, animpressive entrepreneur and leadership to do something like bringArctic gas to the Lower 48.”

But three drivers – technological, political and societal – arenecessitating changes in the asset-based system. “Technologychanges are accelerating,” said Cook, who cited the fact that morescientists are alive today than at anytime in history, and areexchanging information at a break-neck pace. “That’s how we got thehydrogen fuel cell. Who knows what’s next?”

Another driver is the political changes that she said are”sweeping” the globe making the free market more the norm than not.Finally, there is social change, which gives information access toeveryone.

“A strategic question a natural gas marketer has to ask is ‘howclose to the customer do I need to get,'” said Cook. With so manyoptions available to the customer, and the industry becoming moreefficient, she advised delegates to consider tailoring theirprojects to fit the individual needs. “Integrating other types ofknowledge opens opportunities.”

For instance ‘product development’ is not a term usuallyassociated with natural gas. However, Cook stressed that the newtechnology requires leaders to rethink what they already know. “Asan example, consider gas-to-liquids technology. That’s productdevelopment. And new products access totally different markets.”

A key competitive differentiation is to become a one-stop shop,she said, offering market knowledge and the ability to be flexible.Most important in the equation are the people.

“Quality of people is critical. It’s becoming increasinglydifficult without having the ability to leverage the Internet.There’s a period of experimentation that eventually will end, andthe winners will emerge. People play an ever more important role inthis.”

Pointing to Shell’s ventures with several Internet exchanges,including the InterContinental Exchange and HoustonStreet, Cookemphasized that companies have to be part of the program and keepup with the changes, or they will not last.

“Clearly, we’re no longer purely an asset game. The natural gasbusiness is more complicated than ever before, and the successfulcompanies will pursue new markets with new products,” said Cook.”And all of this is tied to a global vision,” which she said willrequire corporate goals to be merged with sustainability goals.

Carolyn Davis, Houston

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.