Increased Natural Gas Supply and Low Gas Prices is Hampering the Growth of Global Regasification Industry/n
Increased Natural Gas Supply and Low Gas Prices is Hampering the Growth of Global Regasification Industry
Following the economic recession, the global natural gas industry has been struggling with over-supply and low prices. The situation is most pressing in North America where natural gas prices are hovering in the range of $3.5-$4.0/Million Metric British Thermal Units (MMBtu) due to the low demand for natural gas in the region coupled with abundant supplies from Canada and domestic production. In Europe, major planned gas transmission pipelines might compete against the development of Liquefied Natural Gas (LNG) regasification infrastructure. In addition, there has been an increased focus on exploring and exploiting gas shales as unconventional sources of natural gas in the region.
Despite the short to medium-term outlook for the global LNG regasification industry being uninspiring, the long-term picture remains positive. With the industry majors betting on natural gas as the fuel of the future, the long term growth prospects for LNG regasification remain promising.
Asia Pacific Will Drive the Growth of Global Regasification Industry
The Asia-Pacific is expected to be the main driver of the global regasification industry, with traditional importers like Japan, Taiwan and the Republic of Korea depending heavily on LNG to meet their domestic natural gas demands. Growing gas demand in China and India is also going to make the LNG market in the region quite lucrative.
Qatar is looking to aggressively increase its LNG supplies to China and India. LNG producers in Australia and Papua New Guinea (PNG) are also looking to increase their markets in these countries. The growing LNG industry in Iran will also be eyeing these expanding markets. With North America and Europe struggling with lower demand, the growing demand in Asia, driven by China and India, will also encourage companies to invest in liquefaction terminals in Nigeria and Angola to supply LNG to India and China.
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Shale Gas Development in the US Will Hamper Growth of its LNG Regasification Industry
Unconventional gas sources like gas shales in the US are being developed at a rapid pace in order to supply huge quantities of gas to the North American domestic market. Increasing domestic gas production has forced LNG regasification companies in the US to re-export LNG cargoes to other markets such as the Asia-Pacific and Europe.
Some LNG receiving terminals in the US have also already petitioned to the US government to allow them be converted into liquefaction terminals or to re-export their LNG exports to other markets.
All of these factors have led to some of the planned regasification terminals to be postponed or cancelled as an abundance of natural gas in North America, one of the key natural gas importing regions, would hamper the development of its regasification industry.
Growth Of Unconventional Natural Gas Sector Affecting the Global LNG Regasification Industry
The success of the US’s shale plays has spurred the search for this lucrative resource in Europe and other parts of the globe. Recently, China has started developing its first shale gas project. In Australia, Beach Petroleum has signed an agreement with a Canadian company to evaluate shale gas potential in South Australia's Cooper Basin. In India, the state-run Oil and Natural Gas Corporation (ONGC) has been trying to partner with Schlumberger to assess the availability of shale gas in the country. The pilot project is expected to start in 2011. The increased availability of gas shales in different regions worldwide might impact the future prospects of the global LNG regasification market.
Surplus LNG Production and Reduced Imports Has Transformed the Global LNG Market into a Buyer's Market
With reduction in LNG demand in North America and Europe, there has been heightened competition between LNG producers from the Middle East and Oceania to supply LNG to a few demand centers, mainly in the Asia-Pacific. With a growing number of suppliers and limited importers, the fundamentals of the global LNG regasification market are currently favoring the buyers.
“Global LNG Regasification Markets - Capacity Growth, Market Analysis and Competitive Landscape to 2015” is the latest report from GlobalData, the industry analysis specialist, offering extensive information on the worldwide LNG (Liquefied Natural Gas) regasification markets. This study provides a detailed analysis of the global LNG regasification markets with a focus on the key issues and trends to 2015. The research examines capacity forecasts, the demand for natural gas, the LNG trade movements and prices in the existing regasification markets, key contracts defining future trade and the market structure of the LNG industry in each country to 2015.
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