Natural gas is a gas primarily consisting of methane with zero to 20% ‘higher’ i.e. more complex oil and gas in the mix such as ethane. The natural gas is referred to here is natural gas located deep in the earth known as thermogenic gas created from the effect of high temperatures and pressures acting on buried organic material. Rather than biogenic gas created by the action of microorganisms in marshes, bogs and landfills.
Reserves of conventional natural gas are usually found ‘associated’ with oil deposits or ‘unassociated’ in isolated natural gas fields.
Russia has the largest natural gas reserves followed by Iran and Qatar. These countries have at least more than triple the reserves of the next country by reserves and accounted for 53% of the reported global natural gas reserves in 2009. However, these three countries are not the biggest producers. Qatar only started producing gas in the double digits in 2001 and exports from Iran are limited by international sanctions.
The US and Russia are the top two natural gas producers by a large margin followed by Canada, Iran and Norway. Both the US and Russia accounted for 38% of production. In 2009 the US overtook Russia to become the largest producer of natural gas, due to a ramp up of production of unconventional gas from shale rock.
Extracted gas is transported via pipelines or cooled into a liquid form known as LNG. Then LNG is shipped via tanker then re-gasified and transported via onshore pipelines. LNG has been gaining a larger share of the market as some of the major producer of cheap gas such as Qatar and Australia are located a large distance away from major markets such as China, India, Europe and North America.
