Interdependence of economies is a reality in today’s fast shrinking globe. Regional markets are increasingly influenced by developments in difference parts of the world, and gas markets are no exceptions. The shale gas revolution in North America, economic recession in Europe, the Arab Spring and the Fukushima nuclear accident in Japan provide example of events which have had an impact on gas supply, demand & pricing far beyond their immediate geographical regions.
Australia along with USA is on its way to become the world’s biggest LNG supplier by 2018 on the basis of various new LNG supply projects initiated there. Gas markets are likely to remain in over supply for the next five years according to Booz & Company’s latest report, The next cycle: Gas markets beyond the Recession, published on 22nd June. This means spot market prices are likely to remain under pressure for some time while contract prices in European and Asian markets become more structural.
By 2020 the share of natural gas is expected to reach 29 % of the primary energy consumption from 23 % at the present. Estimates say 60% more LNG consumption than present levels by Asia Pacific region in next 5-10 years. Mr. B.C. Tripathi – Chairman & Managing Director, GAIL (India) Limited said, “The share of unconventional gas in Asia is projected to increase with its commercialisation in India, China and others. Transnational flow of gas is going to increase and there would be greater convergence of gas markets, especially with regard to price formation, as they exist today between the three regions of the world.”
The conclusion that can be drawn is because of “its green properties” and highly efficient application technologies, natural gas will remain the fuel of choice and will continue to make a growing contribution to energy supply. Natural gas can play an important role as a bridging fuel to a sustainable energy future over the coming decades.
“Royal Dutch Shell – the world’s biggest LNG company, will move the headquarters of its integrated gas business to Singapore from Europe as part of its quest to feed Asia’s surging demand for the fuel
Reuters, 5.12.12 ”