At the 13th Middle East Gas Summit held in Qatar earlier this year, experts from around the world converged to discuss the most preferred natural energy option, gas.

Oliver Appertt, the Chairman and CEO of the French Institute of Petroleum, one of the participants at the Gas Summit spoke to Qatar Today on a broad range of subject from the advantages of natural energy, the geo-politics involved in gas transfer, efficient usage of gas, the LNG aspect of it and environmental angle of energy.

|q|How successful is gas as the future fuel and its conversion to liquid? Will the investments pay off?
|a|The transport sector is one of the main drivers of energy demand. Natural gas is contributing to the challenge of transport thanks to the recent technological developments of GTL. 
Natural gas, as a transport fuel, has been well known for many years. Its CO2 balance is attractive. Ongoing researches on combustion and onboard storage are improving its performances furthermore.
Natural gas will increasingly contribute to the supply of diesel fuel thanks to the developments of GTL technologies. ItÕs possible to produce very good kerosene and diesel fuels without sulphur, aromatic and with an attractive cetane number. But GTL is very capital intensive. Profitability of this technology has been jeopardised by the significant cost inflation the oil industry is faced with.

|q|How would you rate the developments in Qatar in the technology domain?
|a|Qatar is playing a leading role in the technology domain. This is due to its huge reserves, as well as its geopolitical stability and its foreign investment regime. So, it is the country of excellence for the development of new technologies.

|q|Gas being a natural resource, what role does efficient usage mean in keeping the supply flow last longer?
|a|Obviously, gas is a non-renewable resource. So it is a key priority to develop efficient usages. Even if CO2 emissions from natural gas are lower than oil or coal, the climate change challenge is imposing to save natural gas. Gas combined cycle for power generation is a good example of efficient technology as its efficiency is very high compared to others technologies.

|q|What direction is technology taking in shaping newer energy sources like renewable energy and carbon capture and storage?
|a|For power generation, it is necessary to take into account the fact that in many consuming countries, there is a renewed interest for nuclear energy. As well, a great emphasis is put on renewable energy for power generation with wind or biomass. We may also anticipate technological breakthroughs in solar energy.
Many utilities are also considering very seriously carbon capture and storage. CO2 capture and storage in deep horizons appears to be a key technology in order to reduce CO2 emissions in the atmosphere.
All the technologies involved in CCS are already used by the oil and gas industry -- gas treatment, acid gas transportation or underground gas storage. Not surprisingly, the most important CCS pilot is involving a gas field: Sleipner field in the North Sea where 1MT of CO2/y is stored in a deep aquifere since 1996.

|q|What are the prospects of energy convergence in the coming 10 years? Will convergence kill or fuel competition among the energy sources? Will it work in countries like Qatar where there are huge gas reserves?
|a|For decades, natural gas has been competing with oil when it was not flared due to a lack of outlet. At that time, it was written in three words: oil and gas. Thanks to technology, natural gas took a leading position in the energy mix. It was written in three letters: GAS. Deregulation of energy market has lead to a convergence between gas and electricity. Gas is once again written in three words: gas and electricity. Natural gas was considered recently as the preferred energy option for the 21st century.
The dramatic increase of oil prices for the last few years has changed the scene significantly. Gas is no more the preferred option for power generation: it has to compete with coal, nuclear and renewable. It will still compete with oil in its traditional outlets. However natural gas always has competitive advantages due to its attractive price and environmental benefits.
In a country like Qatar, where there are huge reserves, natural gas is obviously the preferred option for internal energy supply. However, it is also necessary to consider alternative energy sources in order to increase export potential.

|q|With natural gas supplies concentrated in particular regions of the world, what premium does geo-political stability mean for efficient gas supply, especially with the current Russia-Ukraine energy conflict?
|a|For consuming countries, an important challenge is related to the challenge related to the uneven distribution of gas reserves: 2/3 of world gas reserves are located in Russia, Iran and Qatar. This concentration of gas reserves in a few countries is raising concern about security of supply, transit conditions. Diversification of gas supply is one of the key concerns of consuming countries. Obviously geopolitical stability of producing countries is playing a significant role in the supply strategy of consuming countries.

|q|With the huge investments needed for gas supply, what role does technology play?
|a|Investment is a major challenge of the gas sector. Upstream would represent 56 percent of total gas investment needs. These investments would be split between OECD and non-OECD countries. Increasing energy nationalism in producing countries is raising a key question: will the investment needed be made in due time?
Cost inflation is reinforcing this fear. Exploration costs of IOC have been increasing by 17 percent for 2003 to 2005. The investment cost of projects is sky rocketing. For example, in the case of LNG, liquefaction costs increased from $200-250/T in 2002 to $800-1000/T today. The cost of LNG carriers increased from $150 million in 2003 to $225 million today.
Technology may play a key role. Two main objectives are pursued: open access to new resources, produce them and bring to the final consumer; contribute to solve the challenges of climate change by reducing CO2 emissions.