Is the Scene Set for a Global LNG Market Pricing?
(Room D201-D202, Elicium, Second Floor)
09 Jun 15
4:00 PM
-
5:30 PM
Tracks:
Theme: Europe's Transitioning Power Sector
It is conventional wisdom that there are three main gas markets in the world: the European market (driven by supply from North Sea, Russia and some LNG, but with pricing increasingly set by gas to gas competition); the North America (domestic gas and now shale gas) and the LNG market that focuses around Asia. Historical pricing charts support this view – the EU is taking steps to force Russia to remove crude oil linkages in its pricing to Europe to free up price competition among suppliers, Henry Hub prices are clearly driven by domestic US forces, while crude linkages remain common in Asia.
But the world is a-changing. Shale gas is driving a revolution in LNG in the USA and changing the dynamics of fuel flows between the USA and Europe; reform in power pricing and inter-fuel economics in Asia are changing the way LNG is perceived and used in Asia and new supplies of LNG from as far afield as Africa may not play by the conventional game-rules. Russia itself is selling gas to the west by pipe and by 2018 by a second land route east to China, and LNG from its eastern flank and in time from its western sea-board as well.
Is the scene now set for global LNG market pricing? How many fuel linkages are needed between USA and Asia; between USA and Europe and across Russia before the effects ripple across the globe and connect all these markets?
This presentation will explore the changing drivers of supply and demand in USA, Asia and Europe – with a particular focus on what is happening in Asia -- and review the question of what it all means for global gas market dynamics.