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The GE Oil & Gas Annual Meeting in Florence, Italy, now in its 14th year, took place in January. GE Oil & Gas President & CEO, Dan Heintzelman kicked off the proceedings by announcing that this was the largest ever attendance in the event’s history. More than 1,000 attendees from over 70 countries assembled to be briefed on the latest trends in oil production, the acceleration of subsea exploration, the growth of unconventional resources, the evolution and expansion of LNG, and the impact of monitoring and diagnostics.

“These megatrends are driven by a rapid evolution of technology and capabilities that are unleashing enormous opportunities to find and deliver more fuel to those who need it and to help those who extract it do so in more efficient, cost-effective and environmentally responsible ways,” said Heintzelman. He was enthusiastic about the “shale gas revolution,” which, he said, is creating demand for GE equipment in LNG (p.18) as well as across the oil & gas sector.

The theme of this year’s meeting was “Leading Progress Together.” As such, GE assembled a cast of speakers representing companies involved in some of the largest projects in the industry. This included Md Arif Mahmood, Vice President for Corporate Strategic Planning at Petronas, Zuhair Al-Hussain, Vice President of Southern Area Oil Operations at Saudi Aramco, Steve Beamer, Vice President of Reliability and Maintenance for Upstream Production at BP, Lee Tillman, Vice President of Engineering for ExxonMobil Development Company, Khalifa Al- Sowaidi, CEO of QAFCO, Keith Elliott, Vice President of Major Projects at Noble Energy and Laszlo Varra, Head of Gas, Coal and Power Division, International Energy Agency (IEA).

Al-Sowaidi of Qatar-based QAFCO, the largest single-site ammonia and urea producer in the world, explored the theme of building long-term growth in the Middle East. His company operates six trains of turbomachinery used mainly in melamine, ammonia and urea. “Ammonia is manufactured using natural gas as the feedstock,” he said. “Currently, we are manufacturing 3.7 million tons of ammonia per annum with most exports going to India and South Africa.”

Al-Sowaidi was followed by Keith Elliott of Noble Energy, an independent firm that deals with the development of unconventional resources in North America as well as deep water exploration and emerging natural gas plays. “We are experiencing major growth of the global gas industry with a big expansion of supply,” he said. “As a result of unconventional supplies, such as shale gas, the U.S. is approaching energy independence. This was unheard of five years ago and it is changing the dynamics of the industry.”

Chinese gas


The business aura of the proceedings was brightened up the laconic humor of IEA’s Lazlo Varra. He focused on China, stating that it was the only country in Asia that would have a meaningful increase in its internal gas supply over the next few years. However, it remains dominated by coal and this will continue for the foreseeable future. “China is planning to capitalize on its large volume of domestic coal, so I don’t see combined cycle gas turbines playing a big role there,” he said. “However, wind, solar and nuclear will show strong growth as China seeks to strengthen its domestic energy base.”

While most countries utilize coal resources almost exclusively for power generation, China still uses 23% for heating. That is where Varra sees an opportunity for gas — to take over from coal heating while ameliorating the smog problems that coal creates in many Chinese metropolitan areas.

As for recent massive estimates of shale gas reserves in China, Varra does not take them too seriously. He explained that the U.S. has over a million exploration drills done over the last century or so that have given rise to a continent with well-known geology. That knowledge has facilitated the rapid exploitation of shale gas in North America. China’s geological data, on the other hand, is uncertain, unreliable and largely unknown. The Chinese government is working hard to change that, he said. Nevertheless, problems remain.

“From what we know so far, China’s geology is less favorable than that in the U.S.,” said Varra. “Shale gas in China is generally found in populated locations and areas where water usage is already high, or else in remote desert sites.”

Another issue is that China has a transmission pipeline network that is now less than 10% as extensive as that in the U.S. Again, the government is building gas infrastructure but it will take time to establish the necessary backbone for a gas boom.

GE Oil & Gas uses this conference to release its latest product and contract news. This year was no exception. Products released included a new version of its integrated compressor line (p. 31); while Heintzleman announced that the company achieved orders of $18.2 billion in 2012 and revenues of $15.2 billion (p. 10).