BHP Billiton update on their gas assets

There are a whole lot of interesting slides in a BHP Billiton presentation: Technology, strategy and the growth of gas as a source of global energy. Check out the slides, because a picture of course tells ten (or is it a thousand) words. So I have gone and grabbed a whole lot of screen shots. First, world natural gas consumption shown in Billion Cubic Feet Per Day. I can't even imagine how big a billion cubic feet is, and how you can actually shrink it, but for the purposes of consumption and production, that is what it is measured in. It is much easier to imagine a barrel of oil.

Basically, global natural gas consumption is expected to double inside of thirty years, starting in 1990. And if we believe the forecasts, then natural gas consumption should double between 2000 and 2030, keeping up that thirty year trend. The next slide points out why we have seen lower gas prices, because the improved technology has led to greater supply. In the US, the greater use of technology (fracking) has seen US production improve dramatically. Many companies in the US, either at a services level or at a production level have ramped up their exposure to natural gas, and this next visual tells us why. Natural gas resource estimate sees the US have years and years of "unconventional" gas resources.

The next few slides are specifically related to BHP's business in the US, how their operations are lower cost than their peers. And one slide which explains how 600 thousand jobs have been created by this US gas push. And how they no longer import. No wonder natural gas prices have plunged, there is now huger interest. I suspect that Americans will revolutionize gas usage plugging into the mainstream and developing new methods. We maintain our positive bias towards BHP Billiton, their gas purchases were "early". And interestingly Pat Davies (the ex Sasol CEO) was announced as a BHP Billiton non exec this morning.