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Liquid fuels and natural gas in the Americas

Hydrocarbon Engineering,

A new report has been released by the US EIA which examines the major energy trends and developments of the past decade in the Americas. The report focuses on liquid fuels and natural gas, particularly reserves and resources, production, consumption, trade and investment. The Americas includes North America, Central America, the Caribbean and South America and accounts for a significant portion of global supply, demand and trade of liquid fuels and natural gas. Liquid fuels can include all petroleum and derivatives, natural gas liquids, biofuels, and liquids derived from other hydrocarbon sources.

At the beginning of last year, the Americas accounted for one third of proved worldwide reserves of crude oil, at 536 billion bbls, and one tenth of proved natural gas reserves, at 6 88 trillion ft3, as well as immense recoverable resources of oil and gas including reservoired resources, tight oil and shale gas.

In 2012, the Americas produced 29% of the global liquid fuels supply, at almost 26 million bpd and consumed one third of the supply at nearly 30 million bpd. Overall, the countries in the region imported and exported substantial volumes of both crude oil and refined petroleum products, accounting for 25% of global crude imports, 9% of global crude exports, and 22% of global petroleum product imports and exports. The countries in the Americans imported 4 million bpd and exported 3 million bpd of refined petroleum products in 2012, much of which was exported from the US.

Trade, imports and exports
Over the last decade, the US has been a major crude oil, petroleum product and natural gas trading partner with other countries in the Americas. From 2003 – 2012, the US imported approximately 5 million bpd of crude oil from other countries in the region. However, the quantities and shares of imports form those countries are shifting. US crude oil production is continuing to increase and domestic production has displaced some imports of crude oil, including those from Latin America, defined as Mexico plus Central America, the Caribbean and South America.

The US has been a major supplier of petroleum products to the Americas for the past 10 years, and its significance as a product supplier has grown considerably in recent years. In 2003, the US exported 600 000 bpd of petroleum products to other countries in the Americas, primarily Mexico and Canada. In 2012, US exports to other countries in the region totalled 2 million bpd, still primarily Mexico and Canada but increasingly to other countries, most notable Brazil and Chile. As a result, the US recently became a net exporter of petroleum products.

Trade of refined products in the Americas has chanced as demand in Latin America, included demand for cleaner, low sulfur products, has grown faster than local refining capacity. US refineries on the Gulf Coast, where some of the most sophisticated and economic refining capacity in the world is concentrated, have been well positioned to provide additional supply to meet this growing demand.

In 2012, the Americas produced and consumed approximately 31% of the world’s natural gas, while accounting for 20% of global natural gas trade in both imports and exports. More than 80% of both natural gas imports and exports in the Americas were transported via pipeline to neighbouring countries, while the remainder was traded within the region as LNG. The US EIA predicts that natural gas exports from the Americas will increase further as natural gas supply, particularly in the US, continues to rise as shale gas production increases. Additional LNG terminals and the ongoing Panama Canal expansion, which will allow passage of larger LNG tankers, will further boost LNG exports in the Americas region.

Resources and investment
Companies within and outside the Americas have begun investing heavily in developing and producing liquid fuels and natural gas as they are recognising the abundance of hydrocarbon reserves and the availability of technical capacities in the region. Both IOCs and state owned oil companies in the region have made the most substantial investments, followed by companies based in Europe, Asia and Oceania.

Foreign investment in the region has been concentrated in countries with legal and regulatory structures open to foreign involvement. Countries with the most open structures have attracted significantly more investment than others. Mexico has recently adopted new energy reforms and that has allowed some types of foreign investment in the energy sector.

Asian investment in the Americas has risen dramatically over the last five years, in particular, investment by China’s NOCs to secure both crude oil supplies and physical assets, such as refineries, especially in those countries considered to have more restrictive foreign investment laws and regulations.

The Americas region holds an abundance of existing proven reserves, as well as the promise of abundant resources of both oil and natural gas. While the Americas have accounted for a considerable portion of the global markets in liquid fuels and natural gas and have attracted sizeable investments, the region has the potential to further expand and develop.

To read the full EIA report, click here.

Adapted from press release by Claira Lloyd

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