While it continues to deal with the fallout of the Macondo well blowout in the Gulf of Mexico (GOM) last April and it reported decreases in both quarterly and annual physical sales of natural gas, BP plc remains firmly atop both NGI's 4Q2010 Top North American Gas Marketers Ranking and NGI's Full-Year 2010 Top North American Gas Marketers Ranking.
The embattled energy giant reported physical sales of 25.10 Bcf/d in 4Q2010, a 13% decline from 29.00 Bcf/d in 4Q2009, but it remained out of reach of Shell Energy North America, the second ranked company in NGI's quarterly survey, which reported 15.10 Bcf/d in 4Q2010. BP was also the highest ranking company in the Full-Year 2010 survey, reporting an average 26.10 Bcf/d, a 10% decrease compared to 29.10 Bcf/d in 2009. Shell reported 15.60 Bcf/d for 2010, a 6% increase compared with 14.70 Bcf/d in 2009.
ConocoPhillips continues to run neck and neck with Shell for the second spot on the NGI survey, reported 14.70 Bcf/d in 4Q2010, an 4% increase compared with 14.10 in 4Q2009. Houston-based ConocoPhillips also reported an increase for the full year, reporting 14.65 Bcf/d in 2010, up 2% compared with 14.30 in 2009.
This year will be a period of consolidation for BP, according to Group CEO Bob Dudley (see NGI, March 7). The company already has sold some major North American properties and cut spending since the GOM disaster (see NGI, July 26, 2010). To meet its $30 billion divestiture target by the end of 2011, BP will continue to pare its assets with sales in the United States, Canada and the United Kingdom.
The 24 marketers that participated in both the 4Q2010 and 4Q2009 surveys reported a total of 135.83 Bcf/d was transacted in 4Q2010, an 8% increase from the 126.08 Bcf/d that changed hands in the year-ago period.
|2.||Shell Energy NA||15.10||15.50||-3%|
|5.||EDF Trading NA||7.23||4.05||79%|
|9.||JP Morgan ***||6.39||3.57||79%|
|20.||Southwestern Energy Co||1.51||1.18||28%|
|21.||Bank of America Merrill Lynch||1.45||1.31||11%|
Source: Quarterly financial reports with the Securities and Exchange Commission, or if necessary, statements signed by company officials and provided to NGI. Some previous-year data has been updated by the companies since it was originally reported.
Companies providing data directly to NGI include Bank of America Merrill Lynch, BP, Chevron, Citigroup, ConocoPhillips, EDF Trading NA, Gazprom, JP Morgan, Louis Dreyfus, Macquarie Energy, Shell Energy and Tenaska. *Macquarie Energy data reflects Macquarie Energy LLC's transactions in the United States and Macquarie Energy Canada's transactions in Canada. **The gas volume figures for Apache, Chesapeake, Devon, EnCana and ExxonMobil represent the amount of North American gas produced in the quarter. Those companies may be marketing more third-party gas for sale. ***JP Morgan acquired RBS Sempra Commodities' wholesale natural gas marketing and trading unit effective Dec. 1, 2010; JP Morgan's total includes RBS Sempra volumes for December only.
But Maryland-based energy consultant Ben Schlesinger, who nine months ago called gas "a market in search of demand" (see NGI, June 14, 2010), says little has changed since then.
"I would still characterize the market that way. In fact, I would say it's more that way than ever because there is so much production that is coming out of the shale fields that is more than offsetting conventional gas supplies," Schlesinger told NGI. Potential markets for domestic natural gas -- electric power generation, liquefied natural gas (LNG) exports, and transportation -- are not growing as quickly as could be hoped, he said.
"I think we are seeing some efforts to try to stimulate growth of gas use to replace certain coal-fired power plants that are old, [Environmental Protection Agency]-grandfathered and likely to be closed down before long anyway," Schlesinger said. "To accelerate those closures, gas can be used as part of what makes up for them, plus to meet some growth in the market. But having said that, for the fourth year in a row gas and wind are sharing that honor. But still, it's a potential growth market for gas."
LNG exports to Europe and Asia may offer more near-term promise.
"Europe is a real important potential market for U.S. excess gas supplies, and there's no reason we shouldn't export to them, particularly since Europe is so concerned about the reliability of Russian gas. Even though Russia has an enormous gas resource, that's not being developed fast enough for a variety of reasons, and also the Russians have had some disputes with their neighbor countries that have resulted -- for one reason or another, without ascribing blame -- on calling into question gas supplies during times when they're needed most." Major European gas utilities are concerned "and very keen on diversifying their gas supply sources," Schlesinger said.
"China, I think, would also be interested in importing U.S. gas if they could. It would be a nice way to counter the balance of payments issue, and they've certainly shown an interest in it...but they're not LNG-dependent the way South Korea and Taiwan are." Japan is also heavily dependent on LNG imports, Schlesinger said.
But it is unclear what power demand there will be following the earthquake and tsunami that struck that country March 11. Both Russia and Qatar have said they are willing and able to step in with supplies of LNG to take up the slack for lost power generating capacity. The United States has been a long-time supplier of LNG to Japan via the Kenai LNG export terminal in Alaska. However, last month ConocoPhillips, operator of the terminal, said the facility would be mothballed due to an inability to secure contracts for the plant's output (see NGI, Feb. 14).
Any significant impact on the market from integration of natural gas into the transportation fuel mix remains elusive, Schlesinger said.
"The economics have been so good for so long, the technology has been good for so long and the fill availability has been around for so long -- since the early '90s -- that we should have had 20 million of these vehicles in the United States, but we don't. We have 150,000, and we have 250 million non-natural gas vehicles."
Joining the NGI survey is Russian oil giant Gazprom, which reported 1.23 Bcf/d in North American sales in 4Q2010. Gazprom's market value rose 4% in 2010 to $149.4 billion, making it the sixth largest listed energy company, according to the PFC Energy 50 annual ranking (see NGI, Jan. 31).
JP Morgan reported 6.39 Bcf/d for 4Q2010, a 79% increase from 3.57 Bcf/d in 4Q2009, helped in large part by the Dec. 1, 2010 acquisition of RBS Sempra Commodities' wholesale natural gas marketing and trading unit (see NGI, Dec. 6, 2010). RBS Sempra, which had reported 6.51 Bcf/d in 3Q2009, exited the survey in 3Q2010.
"If the volumes for December were extrapolated across the rest of the quarter, we would have seen an even greater increase," a JP Morgan spokesman told NGI.
Not appearing in NGI's quarterly survey for the first time since 4Q2003 is Nexen Inc., which last year agreed to sell its North American downstream natural gas marketing business to Goldman Sachs commodity trading subsidiary J. Aron & Co. (see NGI, May 17, 2010). Nexen reported 1.80 Bcf/d in 3Q2010, a 63% decline compared with 4.90 Bcf/d in 3Q2009; and 3.10 Bcf/d in 2Q2010, a 33% decline compared with 4.60 Bcf/d in 2Q2009.
Highlights of NGI's Full-Year 2010 Top North American Gas Marketers Ranking included EDF Trading NA's 95% jump from 3.33 Bcf/d in 2009 to 6.50 Bcf/d in 2010. EDF recently proposed contracting between 0.7 and 1.5 million metric tons/year of bi-directional LNG processing capacity at the Sabine Pass LNG terminal in Louisiana (see NGI, Jan. 24).
ExxonMobil Corp. reported 3.16 Bcf/d in 2010, a 65% increase compared with 1.92 Bcf/d in 2009, while Sequent Energy Management reported a 54% increase (4.57 Bcf/d in 2010 compared with 2.96 Bcf/d in 2009) and Southwestern Energy Co. reported a 30% increase (1.36 Bcf/d in 2010 compared with 1.05 Bcf/d in 2009).
|Company||Full Year 2010||Full Year 2009||Change|
|2.||Shell Energy NA||15.60||14.70||6%|
|4.||Macquarie Energy *||11.46||n/a||n/a|
|7.||EDF Trading NA||6.50||3.33||95%|
|9.||JP Morgan ***||4.88||n/a||n/a|
|19.||Bank of America Merrill Lynch||1.57||1.59||-1%|
|21.||Southwestern Energy Co.||1.36||1.05||30%|
Source: Quarterly financial reports with the Securities and Exchange Commission, or if necessary, statements signed by company officials and provided to NGI.
Companies providing data directly to NGI include Bank of America Merrill Lynch, BP, Citigroup, Chevron, ConocoPhillips, EDF Trading NA, JP Morgan, Louis Dreyfus, Macquarie Energy, Shell Energy and Tenaska. *Macquarie Cook Energy data reflects Macquarie Cook Energy LLC's transactions in the United States and Macquarie Cook Energy Canada's transactions in Canada. **The gas volume figures for Apache, Chesapeake, Devon, EnCana and ExxonMobil and represent the amount of North American gas produced in the quarter. Those companies may be marketing more third-party gas for sale. ***JP Morgan acquired RBS Sempra Commodities' wholesale natural gas marketing and trading unit effective Dec. 1, 2010; JP Morgan's total includes RBS Sempra volumes for December only.
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