Gastech: WoodMac expects global gas dependencies to continue, tighten

By OGJ editors
AMSTERDAM, Mar. 21
-- Global interdependencies among gas markets will continue over the next decade, said Wood Mackenzie’s Noel Tomnay, head of global gas research, in remarks to Gastech in Amsterdam on Mar. 21. This trend will influence pricing in the global gas market, he said.

Tomnay pointed to the likelihood of North American LNG exports, the continuation of tight Asian gas markets, and European concerns for security of supply.

Recently, he said, “we’ve seen linkages between the US, Europe, and Asia in various forms, and looking out to 2020, each region’s gas market dynamics will continue to influence supply and demand and regional gas prices.”

WoodMac’s data suggest North America will remain disconnected as oversupply depresses Henry Hub prices. But it “will not be isolated,” said Tomnay. North American movements towards becoming an LNG exporter will have an “implicit impact” on price, “even before the first molecule of LNG is loaded on a ship.”

North American LNG exports pose several questions for the global gas market:

• How much LNG volume can be exported before it becomes self-limiting?

• What will choke volumes first: rising US gas prices that make it uneconomic or the fear of price rises that might drive vested interests to persuade regulators to restrict exports?

• Will the threat of North American LNG exports impose a future ceiling for European gas prices?

In contrast to North America being awash with gas, he said, the challenge for Asia-Pacific markets is lack of supply: With nearby Pacific-produced LNG insufficient to meet growing demand in the medium term, we can anticipate a “growing reliance” on Middle East and Atlantic LNG imports.

“Particularly between 2013 and 2016, the market in Asia is looking tight, and recent events may increase this tightness, which in turn would have repercussions for Europe,” he said. If Europe also tightens at the same time, as seems increasingly likely, we may see a “pronounced price spike.” In the longer term, Tomnay said, the high cost of new Australian LNG projects will keep Asia Pacific long-term contract prices high.

Europe, on the other hand and in the medium term especially, remains more vulnerable to supply issues. “The last few years of oversupply may have resulted in European complacency regarding supply security,” he said. WoodMac’s analysis, however, suggests that Europe could be as much as 100 billion cu m short of gas in as few as 7 years.

Addressing this requires supply projects in addition to those already planned. Medium term, it’s likely that Europe will compete with Asia for LNG supply and rely more on supply from Russia.

Related Articles

Canada Briefs

12/12/2014

Kinder Morgan to deliver natural gas to Corpus Christi Liquefaction

12/11/2014 Kinder Morgan Inc. (KMI) companies Kinder Morgan Texas Pipeline, Kinder Morgan Tejas Pipeline, and Tennessee Gas Pipeline Co. (TGP) have entered in...

Magnolia LNG lets EPC contract to SK E&C USA

12/03/2014 Magnolia LNG LLC parent-company Liquefied Natural Gas Ltd. agreed to an engineering, procurement, and construction contract with SK E&C USA cov...

Pipeline leak dampens Atlantic LNG production

12/01/2014 Atlantic LNG (ALNG) reported a 35% reduction in LNG production because of insufficient natural gas supply from Trinidad and Tobago’s National Gas C...

Real-time monitoring improves LNG inventory measurement

12/01/2014 Kogas has improved the calculation method for determining stocks at its LNG terminals, changing from a sampling method to a real-time monitoring sy...

Watching Government: Greece and energy in Europe

11/24/2014 Amid growing energy supply geopolitics, Greece is a stable anchor within a rapidly destabilizing region, Yannis Maniatis, its Environment, Energy, ...

Freeport LNG nears construction phase

11/19/2014 Freeport LNG Expansion LP expects later this month to close on financing and begin construction on the first two trains of its natural gas liquefac...

Woodside releases draft EIS for Browse LNG project

11/19/2014 Woodside Petroleum Ltd. has released its draft environmental impact statement (EIS) for the proposed Browse LNG project offshore Western Australia.

ANGA president calls for sharper focus on gas transportation issues

11/17/2014 America’s Natural Gas Alliance Pres. Martin J. Durbin called for a stronger focus on transportation as he outlined issues that the US gas industry ...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected