Europe Key to LNG | Russell T. Rudy Energy LLC
As a result of the shale revolution, the domestic natural gas market was flooded with new production. This led to low prices, and an effort by operators to find new markets. These included pipeline sales to Mexico (and to a lesser degree, Canada) and liquefied natural gas (LNG) for export. With abundant, cheap feedstock, LNG looked like a promising international market. “Oil Voice” recently featured an article by Paul Harris. The author makes the case that in an increasingly competitive global LNG market, Europe will play a critical role. Harris based his conclusion on input from a number of European Energy executives.
Monika Zsigri with the European Commission, observed that as European Union (EU) gas production declined, net imports increased by 11% last year. Concurrently, LNG shipments to Europe rose by 6% and now comprise 13% of gas imports. Qatar remains the EU’s largest LNG supplier with a 56% market share, followed by Algeria and Nigeria. While the U. S. has not been a major player so far, our emergence is exerting a downward pressure on prices.
However, by 2025 LNG imports are expected to increase dramatically, especially in the United Kingdom, France, Ukraine, Poland, Greece and Croatia.
Constanza Jacazio with the International Energy Authority, anticipates European demand stabilizing in the short term but gradually increasing due to the decommissioning of coal and nuclear power plants. She sees the rebalancing of international LNG markets being heavily influenced by economic growth in China and other developing Asian economies, as Japan and South Korea play a lesser role. However, she thinks current low LNG prices will stimulate demand.
Armelle Lecarpentier with CEDIGAZ, the international association for natural gas, sees the market on the verge of being oversupplied. She thinks the U. S. will become the swing producer and China and the developing nations of Asia the swing consumers. Lecarpentier anticipates the flexibility in the LNG market leading to increased demand in South East Asia, South Asia, North Africa and Latin America. This will be partially offset, in her opinion, by increased efficiency and conversion to renewable energy sources in Europe.
To read the article in its entirety, please go to http://www.oilvoice.com/n/Why-Europe-is-pivotal-to-LNG-growth/e5aad5640063.aspx .
Russell T. Rudy Energy, LLC buys oil, gas and mineral interests nationwide. Please call (800-880-0940), or write (info@rudyenergy.com ) to let us know if you agree, disagree or would just like to comment on this, or any of our posts.
