PWC: LNG to meet 40% of global gas supply growth in 2010
The LNG market is expected to deliver 40% of the global gas supply increase by 2010, according to a new report published by PricewaterhouseCoopers.
LONDON, Mar. 8 -- The LNG market is expected to deliver 40% of the global gas supply increase by 2010, according to a new report published by PricewaterhouseCoopers.
Energy companies will be able to use four different strategies to capitalize on the changing market: upstream push, market pull, full integration, and portfolio plays, the report said.
Nigeria, Australia, and Qatar are expected to lead in LNG exports. About 91.2% of gas reserves are in countries outside of the Organization for Economic Cooperation and Development. New liquefaction capacity has been proposed in Iran, the Russian Federation, and Yemen, all of which provide access to global markets for upstream owners of gas reserves. For utility companies and energy departments in end markets, LNG is a means of diversifying and securing energy supply.
Michael Hurley, Global LNG leader at PWC, said LNG's ascendance will "be characterized by both complexity and globalization, which demands a mind shift by many players away from the predominant linear fixed supplier and buyer chain of supply to a more flexible disaggregated model of the market."
Shipboard regasification, small-scale liquefaction, and liquefaction hubs, in particular, could open up the prospect of many more players and for nontraditional suppliers to break into the traditional supply models and consortia.
But the report warns that the LNG market is cyclical with some infrastructure built in the 1970s remaining unused until the 1990s. "LNG remains a price-taker not a price-setter on most of the gas markets, and its value depends on the balance between the main oil and gas price, the price of other fuel sources such as coal or nuclear, and the cost of carbon," the report said.
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