LNG exports from the US—if and when they happen—based on surplus natural gas from shale development will have little if any effect on the European gas supply scene. That’s according to E.On Energy Trading Chairman Klaus Schafer in comments to Oil & Gas Journal made on the final day of the 20th World Petroleum Congress in Doha.
The immediate effect of shale gas development in the US, said, Schafer, was to divert LNG shipments away from the new and growing import capacity there. That effect has been absorbed by the markets, he said.
Shale gas development in the US has certainly been a “game-changer,” he said in both private remarks and those in his speech to the congress. But in Europe, he said the effect will be less drastic and develop more slowly.
“Natural gas is currently at a price disadvantage to coal in Europe,” he said. Couple that with the likely demand-depressing effects of the ongoing financial crisis and the slow recovery from the 2007-08 global financial collapse, Europe is unlikely to attract much US-produced LNG, no matter how much or how little liquefaction eventually gets built there.
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