How Will Natural Gas Adapt to the New Price Environment?

About the ProjectKAPSARC is analyzing the shifting dynamics of the global gas markets. Global gas markets have turned upside down during the past five years: North America has emerged as a large potential future LNG exporter while gas demand growth has been slowing down as natural gas gets squeezed between coal and renewables. While the coming years will witness the fastest LNG export capacity expansion ever seen, many questions are raised on the next generation of LNG supply, the impact of low oil and gas prices on supply and demand patterns and how pricing and contractual structure may be affected by both the arrival of US LNG on global gas markets and the desire of Asian buyers for cheaper gas.Key PointsDuring the period 2011-14, buyers – particularly in Europe and Asia – argued that high natural gas prices had been the main obstacle preventing the fuel from fulfilling its promise and increasing its share in the primary energy mix. Key gas price indices have dropped across the world in tandem with oil and the previous situation no longer prevails. Perhaps it is time for new perspectives for gas markets.Demand for gas has yet to be boosted by the fall in prices over the last two years, though some regions show promise.Gas faces competition not only from coal but, more recently, from cheap oil as well. Meanwhile, policies promote renewables and energy efficiency. Consequently, the prospects for natural gas would stand a greater chance once policymakers begin to account properly for coal’s externalities. The rapid change in gas prices will force investors to operate assets on the basis of variable costs. Some players, notably those holding U.S. liquefied natural gas (LNG) export capacity, may not be able to sustain financial difficulties for long, especially if a price war emerges in Europe. The current reduced upstream investment climate could lead to a slower gas production recovery. If demand picks up in a few years’ time, production rates could prove insufficient. The need for flexibility and divergences between term and spot prices could favor the earlier emergence of another trading hub in Asia, although its specificities and location remain unclear.

关于本项目KAPSARC正在研究全球天然气市场的动态变化。过去五年中，全球天然气市场发生了颠覆性的转变：北美已成为具有巨大潜力的未来液化天然气（LNG）出口地区，而随着天然气在煤炭和可再生能源之间的挤压，天然气需求增长速度放缓。尽管未来几年将见证历史上最快的LNG出口能力扩张，但关于下一代LNG供应、低油价和天然气价格对供需模式的影响，以及定价和合同结构可能受到美国LNG进入全球天然气市场和亚洲买家寻求更便宜天然气意愿的影响，仍有许多问题待解。要点在2011-2014年期间，买家——尤其是欧洲和亚洲的买家——认为，天然气价格高昂是阻碍其实现承诺并增加其在一次能源结构中份额的主要障碍。全球主要的天然气价格指数与石油价格同步下降，以往的状况已不复存在。或许，是时候为天然气市场注入新的视角了。尽管过去两年价格下跌，但天然气需求尚未因价格下跌而提振，尽管某些地区显示出潜力。天然气不仅面临来自煤炭的竞争，最近还面临来自廉价石油的竞争。同时，政策鼓励可再生能源和能源效率。因此，一旦政策制定者开始充分考虑煤炭的外部性，天然气的前景将更有希望。天然气价格的快速变化将迫使投资者基于可变成本运营资产。一些玩家，特别是持有美国液化天然气（LNG）出口能力的玩家，可能无法长期承受财务困难，尤其是在欧洲出现价格战的情况下。当前上游投资环境减弱可能导致天然气生产复苏放缓。如果几年后需求增加，生产率可能不足以满足需求。对灵活性和远期与即期价格差异的需求可能有利于亚洲另一个交易中心的早期出现，尽管其具体特征和位置尚不明确。