Sour gas and sulphur: rising volume, corroding value Report

Insight 12 September 2018

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Report summary

Sour gas is coming to the fore. IOCs are targeting a greater gas mix in their portfolios, meanwhile many NOCs are looking for strategic domestic supply. From the Middle East to Central Asia, the biggest and boldest upstream projects must deal with sour gas and its toxic hydrogen sulphide impurities – whether associated with oil or non-associated. Sour gas output will increase by over 50% in the next decade, supplying almost 10% of global gas and shaping sulphur's US$10 billion-a-year market. That excludes the growing volumes re-injected at oil megaprojects.

Executive summary
What is sour gas?
Where is sour gas?
- Middle East and Central Asia dominate the outlook
What are the development constraints?
- Technical: why is sour gas such an issue?
- Commercial: is there an investment case for IOCs?
- Strategic and corporate: are sour gas assets in the right hands?
Sulphur: upstream's lesser-known product
The US$10 billion global sulphur market: five key takeaways
- 1) Oversupply is expected
- 2) China is the dominant market
- 3) Prices are volatile, but regional benchmarks are highly correlated
- 4) Non-China markets matter
- 5) Storage capacity is crucial swing factor
Is it a golden age for sour gas?