Turkey LNG Market Analysis and Outlook to 2020 - Drivers, Challenges, Infrastructure, Supply- demand and competitive landscape
- Language: English
- 100 Pages
- Published: February 2013
- Region: Turkey
In testimony before the U.S. Congress, former Federal Reserve Chairman Alan Greenspan warned that the tightening supply of natural gas to the industrialized and developing economies is likely to have profound effects on energy markets and more importantly, economic growth. In a dramatic departure from his traditional focus on monetary and fiscal issues, Greenspan claimed that the only long-term solution to the impending natural gas crisis would be a worldwide expansion of LNG activity. The U.S., Western European and Pacific Rim nations would have to develop LNG projects rapidly, if a chronic supply shortage is to be averted.
Since the inauguration of International Gas Trade 20 years ago, the economic, political, environmental and financial forces shaping the natural gas industry have changed dramatically. In the aggregate, trade in pipeline gas, LNG and LPG has outstripped total energy demand growth rates as natural gas continues to gain share of worldwide energy markets.
International trade in pipeline gas is expected to grow as the conversion from oil and nuclear energy to natural gas gains momentum. The F.S.U., Norway and Iran are competing with Algeria for the growing market in Western Europe, as governments become more environmentally responsible.
Over the past two years, a dramatic turnaround in natural gas activity and prices has taken place in the U.S. Gas prices have recovered dramatically and have spurred increased drilling. Imports from Canada, after a long period of expansion, are expected to decline dramatically in the coming decade. Gas pipeline companies are now signing a greater percentage of long-term contracts as customers flee the spot market in order to secure adequate gas supplies at advantageous prices.
The LNG market worldwide is sustaining healthy growth rates despite serious challenges from reduced international economic activity. Demand in Japan, the world’s largest market, will outstrip contracted-for supplies by over 40 MMT/Y by 2015. This shortfall represents nearly two-thirds the total volume of LNG currently consumed in Japan. Gas demand in South Korea and Taiwan is burgeoning beyond any projection made just five years ago and projects are being pursued for both pipeline and LNG supplies. LNG demand in Korea alone is expected to be an astonishing 29 MMT by 2010.
In the U.S., natural gas demand is slowing, however, as much as 3 TCF of LNG equivalent may be imported by 2030, four times the conventional optimistic forecast circulating just five years ago. In Europe, LNG trade is taking place in a spirit of greater cooperation as new LNG supply projects in Algeria, Nigeria, Trinidad, Qatar and Norway are negotiated.
The situation in LPG is somewhat ambiguous, with many cross-currents at work. On the one hand, potential LPG supplies seem to be more than adequate to clear the world’s markets. At the same time, however, Saudi Arabia and Indonesia are locked in a long-term battle for the premium Japanese LPG market. There are, however, enough unknown elements in the demand:supply equation — new transportation markets, environmental considerations and petrochemical market growth — to make LPG a potentially critical source in short supply over the coming decade.
The uncertainty in energy markets, reflecting the world’s unstable geopolitical situation and the unfolding of what seems to be a global recession, calls for careful analysis of the wide array of possible outcomes that may impact the natural gas industry in general, and gas trade in particular.
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