Summary of Week 3
Through this week, we have learned that demand for gas is set to rise sharply in the decades to come.
But the supply of gas around the world will also grow, especially as more and more countries emulate the US and begin tapping into their unconventional gas reserves.
Over time, ever more of this gas will be delivered to customers via LNG ships that are “destination flexible” rather than via fixed pipelines. Gas contracts are likely to be shorter. Spot gas markets will grow, deepen and become more liquid. Gas trading hubs will emerge, particularly in Asia, and provide alternative pricing mechanisms for LNG contracts.
Next week, we are going to study some of further geopolitical changes that might hinder the development of natural gas and LNG market and Saudi Arabia’s rejections under two years’ low oil prices to cut its prices and to maintain market share. How US shale gas poses threat to Russian energy and why the energy giant seeks to expand its markets to the Asian region will also be analyzed.