Amanda Battersby
29 November 2012 04:47 GMT
“For the next few years, Japan will face a tight natural gas market just as it seeks to increase its liquefied natural gas imports to compensate for the shutdown of nuclear power,” IHS vice chairman Daniel Yergin said.
This market will be characterised by a tight balance between supply and demand, which will mean that Japan could well be paying the highest prices of any major importing nation. Yergin attributed this to two reasons: Firstly, the volumes of new LNG supply entering the market between 2012 and 2015 are “relatively modest”. Plus Japan’s demand is stronger than had been forecast following the Fukushima nuclear disaster. Japan now accounts for 37% of the total global LNG market.
“[However], later in the decade, the picture will look very different, with an improving outlook for Japan,” he said.
“On the supply side, large volumes of Australian LNG are now set to reach the market at a similar time to the new North American exports. The two largest markets in the world—North America and Russia—are well supplied with gas. And plans are in place to connect the shale resources of the US and Canada with the rest of the world, with first LNG exports likely in 2016”.
Looking further ahead, new significant LNG provinces are emerging. More than 100 trillion cubic feet of gas resources have been discovered offshore East Africa and there are also liquefaction projects being touted for Israel and Cyprus in the Mediterranean Sea.
“And with new players will come new ways of doing business, with different pricing structures,” said Yergin, which will be of great importance to Japan.
Yergin is the author of the upcoming IHS CERA study ‘The New Map of Global Gas’.
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First things first. Form a JP consortium with your large utilities and trading housed and lock up lions share of Gulf LNG.