The U.S. Energy Information Administration's forecast of a global "golden age" of gas can only be realized if sufficient natural gas supplies can be brought to market, a Chevron official told attendees at the IHS CERAWeek conference Wednesday in Houston.

Natural gas has become a hot topic not only in the United States but worldwide as countries seek ways to meet future energy demand while reducing carbon dioxide emissions, said Joseph Geagea, president of Chevron Gas and Midstream.

Much of this gas demand is expected to occur in Asia, Geagea noted, and with limited indigenous gas supply in some Asian countries and pipeline capacity to bring in supply. Geagea has seen no evidence that future demand will lighten.

Gas, particularly shale gas, and liquefied natural gas (LNG), are transforming the energy landscape in the United States and internationally. However, not all countries will pursue shale gas development, said Geagea, noting that industry technology, understanding of U.S. geology, pipeline capacity, conducive regulatory environment and transparent marketplace enabled the U.S. shale gas revolution to unfold.

Geagea and a panel of energy industry officials expressed optimism over the potential for natural gas, but challenges remain in bringing natural gas to market, including the significant capital investment and need for pricing mechanism that will make LNG projects financially feasible to construct.

South Korea, Taiwan and Japan remain solid LNG import markets, but other Asian economies are expected to consume more LNG as well. Gas demand is forecast to grow not only in China and India, but in Indonesia and Malaysia, previously LNG exporters. Seventeen new LNG import terminals are proposed for construction to serve new markets – Vietnam, Pakistan, Bangladesh and the Philippines.

To meet global demand, LNG export terminals are under construction worldwide, many of them in Australia. Seven of the 11 liquefaction projects currently under construction are located in Australia, and include a mix of traditional offshore projects to floating LNG. Australia's close proximity to Asia means the nation will play a key supply role for energy in Asia.

LNG projects are large, expensive and complex. Four of the seven Australian LNG projects have experienced cost overruns. Labor costs are a key driver behind costs in Australia, where oil and gas workers enjoyed the highest salaries paid in the industry last year, said Woodside Energy CEO Peter Coleman.

High costs mean less room for error on project delivery, Coleman noted. To prevent cost overruns, companies need to get back to the fundamentals of project development.

In addition to defining and planning work early, companies also need to have the right contracting strategies and the right people working on these projects, Coleman commented.

"Operators must have strong capabilities across the value chain right through to marketing and shipping," Coleman added.

Chevron is participating in construction of the Gorgon LNG project, one of the biggest, if not the largest LNG project undertaken. To meet future demand, the world will need a Gorgon-size project each year for 20 years.

"With LNG infrastructure, many countries won't be able to participate in the golden age of gas," Geagea commented. "The number of projects on the drawing board can make up for the supply shortfall, but only if they come online."

Realistic time frames for bringing sanctioned projects online are needed. While 75 million tones of new LNG capacity are expected to come online in 2014, many projects will be delayed or not sanctioned, Geagea noted.

Competitive project pricing presents another issue. While Henry Hub may be an appropriate price hub to use for U.S. projects, it may not be applicable to projects in east Africa, western Canada or Australia. The danger of focusing on pricing mechanisms is that projects will be delayed, and will undermine global efforts to obtain reliable energy resources, Geagea noted.

"The reason for the success of hubs like Henry Hub is the infrastructure and market liquidity they provide," Geagea said.

In Europe, infrastructure is being built, liquidity is increasing and buyers and sellers are coming together. However, this has not occurred in Asia – until that happens, discussions of establishing a gas hub in Asia are premature, Geagea noted.

U.S. LNG exports make sense, but will take time, Geagea noted. The United States could reap substantial economic benefits from LNG exports, but the United States needs to implement a long-term regulatory framework for LNG export terminals based on free trade and market principles, not periodic changes in the political climate.

"LNG projects are expensive, massive and complex, and can take an average of 18 years from first discovery to bringing first supply to market," Geagea noted. "These projects need an environment conducive for development."

Chevron has been able to bring the development time frame for its Wheatstone project in Australia down to 12 years. However, the regulatory environment still poses a challenge for these projects, with the project being proposed not always the project that ends up being constructed.