Never Too Early to Plan
Delays in exploration and production could be blessings

There’s a joke in the oil industry that goes: “The lead drilling engineer for an exploration well walks into his boss’ office and says, ‘Well, I’ve got good news and bad news.’ ‘What’s the bad news’, the boss asks. ‘We didn’t find oil,’ the engineer replies. Curious, the boss asks, ‘Ok, what’s the good news?’ ‘We didn’t find gas.’”

While natural gas is a lucrative resource — just ask Qatar — which was identified by the US Energy Information Administration (EIA) in 2013 as the world’s fastest growing fossil fuel in terms of consumption, the joke’s punch line comes in part from the fact that gas is difficult and often costly to transport. The two methods for moving natural gas from discovery source to refinery and then to market are pipelines and liquefied natural gas (LNG) terminals. LNG is the preferred method of shipment for long hauls, but the liquefaction plants cost billions of dollars to build and depend on sufficient quantities of natural gas to be worth constructing. This makes an export plan perhaps the most important consideration for any country with significant natural gas reserves.

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