Fersharaki highlights differences between oil, gas

Facts Global Energy chairman Dr Fereidun Fersharaki, pictured, has highlighted significant differences between oil and gas.
While presenting an overview of the global LNG supply and demand during the PNG Petroleum and Energy Summit in Port Moresby yesterday, Fersharaki said: “With oil, you produce first without worrying where you sell it.
“With LNG, you need to find where or who your buyers are before producing. The chances of making a mistake is very big.
“You have to sell 70 per cent of your LNG first before you start building.
“Another difference in the oil market there is a policeman called Opec (Organisation of Petroleum Exporting Countries).
“In the gas market, there is no policeman. The oil market is global and the gas market is regional.
“That is we have the United States price, European price and Asian price, and these prices will never converge.”
On the country’s LNG business, Fersharaki said Papua New Guinea was a growing global player.
“The future could be very dramatic for the role PNG can play,” he said.
“So we need to be focused on reliable buyers, new and emerging buyers.
“We believe that the richest point in the spot LNG prices will be reached in the middle of 2018, somewhere in the US$3-US$4 (K9.45-K12.60) range.
“That is about the same time you have to reach an investment decision for the Papua LNG.
“This is a challenging environment.”