In this thesis, due credit has been given to all information and material included therein and obtained from other sources. With their support and encouragement, I decided to enroll in this master's program.
Introduction
From zero to growth
- Introduction
- Increase in natural gas consumption
- What's going on to Europe, Asia & USA
- Driving Forces to Renew the Interest in LNG
- Conclusion
Environmental concerns are clearly a driving force in increasing awareness of natural gas and LNG. The prices of natural gas are gradually released, while there is no such possibility for the formation of a natural gas trading center in the Asian market.
Production in Europe, Asia & USA
- Introduction
- Gas hubs
- Liberal Markets and competition
- Conclusion
In the last evaluation, the two German hubs and the two Belgian hubs have greatly improved (Shi, 2016). On the other hand, deregulation in the gas market causes fragmentation and thus trade demand.
LNG market in Europe
Introduction
The market in Europe
23 In the north-west of the EU, the significant diversification of suppliers has allowed the creation of a competitive market with hubs (NBP and TTF) that will be sufficiently liquid to allow the emergence of a reference price for natural gas. This is much less true for Central and Eastern Europe and especially for South-Eastern Europe in the Balkan area, where market interconnections are insufficient (even though substantial development has taken place in the near future) and an extremely limited regasification. These phenomena pose powerful obstacles to the diversification of their offering, which is largely provided by Gazprom.
The gas industry's liberalization processes are slow compared to the rest of the EU. However, the EU intends to focus on the development of interconnections between these markets to promote the diversification of their gas supply.
Conclusion
Prices are largely the result of long-term contracts and price indexation formulas based on the prices of petroleum and petroleum products.
Asia, the world's largest LNG market still under-exploited – USA, a mature
- Introduction
- Gulf production
- The USA LNG market
- Conclusion
The consequences of specific uncertainties in international gas markets (both regionally and globally) could be significant and would have a significant impact on the volumes traded and, by extension, prices (Mishra, 2021). The development of the Northern Route in the Arctic could allow Russia to limit these costs. This change in status has led to the destabilization of the positions of traditional players that exist in the market, such as Russia.
However, it is necessary to face the consequences of the specific uncertainties in the international gas markets (both regional and global) as this would have a profound impact on the volumes that will be traded and in this regard on prices ( Mishra, 2021). Because the suppliers are ultimately importers and exporters of natural gas, this destabilizes the position of traditional players in the market, such as Russia.
LNG price and market dynamics
Introduction
Stages of production and contracts
Finally, in Asia, spot market penetration continues at a much slower pace than in the United States or Europe. There is an orientation for gas in the global context in favor of liquefaction transport. In the case of North American producers, LNG is less attractive as domestic prices are higher than European and Asian prices.
Essentially, this results in a change in terms of exchange in terms of scale, geographic areas and models used. The global LNG market will be oversupplied until global liquefied natural gas (LNG) prices fluctuate below $10/mmBTU.
The emergence of new players
35 Apart from Africa, other parts of the world have seen significant gas discoveries in recent years. Thus, the Eastern Mediterranean enjoys special attention from gas companies after several discoveries in the Cypriot, Egyptian, Israeli and Lebanese Exclusive Economic Zones (EEZ). The potentially high cost of a gas pipeline to Europe leads to increased competitiveness for LNG, especially since Egypt already has the necessary infrastructure for this technology.
The Islamic Republic of Iran, which jointly owns the North Field - South Pars exploitation rights with Qatar, shares almost 10% of the world's gas resources with its neighbor. The Islamic Republic could also affect gas markets if tensions rise in the Strait of Hormuz, despite the fact that it has not followed through on its threats following the assassination of General Soleimani in January 2020.
LNG & Gas Pricing
On the Iranian side, these reserves are currently underutilized and cannot be exported due to Western sanctions. 36 on the other hand, is undergoing an adjustment and moving towards national natural gas price regulations. Since their main purpose is to ensure a direct connection within the natural gas market and promote fair prices, natural gas hubs play an integral role in natural gas pricing mechanisms.
Due to China's natural gas market size and rapid growth rates, along with past experience with large-scale offshoring of other resources, policy changes for China's natural gas market are expected to have a significant effect on global natural gas prices. For this reason, a model has been developed to examine, in particular, the growth of China's natural gas demand in different situations and the implications for world natural gas markets, including price, energy mix and other factors (Ishwaran et al, 2017).
Current Pricing Regulations
In 2011, when the nuclear power plant accident occurred in Fukushima, Japan, natural gas rates in Asia increased. Recently, however, natural gas rates have begun to moderate, partly due to the fact that oil prices are lower, the further capacity of the world's weaker economies as a whole, and the assistance of provided for new projects such as LNG exports to the US. in Asia (Ishwaran et al, 2017). Taking a forward-looking perspective, the prices of natural gas and more specifically LNG, which was intended to be exported to Asia-Pacific markets, could become significantly more unpredictable as LNG exports began to the United States, including mainly in Henry center price indices.
Compared to Asia, where natural gas contract costs are tied to oil, US natural gas exports are under a. This is because natural gas demand and supply, which are local, are often out of balance.
The association between charges of natural gas price and oil price
Historically, there have been four arguments in favor of linking natural gas contracts to oil prices. Natural gas was a by-product of oil extraction and was traded on comparable terms. Although co-production is still widespread, exclusivity in natural gas extraction is increasingly popular.
Natural gas is a by-product resulting from the production of shale oil in, for example, the United States. Outside the US region, the lower natural gas levy may not be practical or readily replicated (Ishwaran et al, 2017).
The effect of quantity demanded by China on the global market
The three possible cases
The impact on Chinese energy supply and demand
Overall, the simulation shows that if international coal consumption remains steady, demand for natural gas would grow under the power generation sector and all sectors scenarios (Ishwaran et al, 2017). I) Impact on the amount of coal consumed. The supply response cancels out some of the price increases, resulting in only a small increase in natural gas hub costs. In both the power generation sector and the all sectors cases, restrictions on the amount of coal consumed will cause a significant shift away from coal and towards natural gas in China.
Thus, in the power generation sector as well as across sectors, global natural gas demand would be higher overall, and consumption losses outside China would only be sufficient to offset about 42% of the increase within China (Ishwaran et al, 2017). ). However, in the power generation sector as well as in all sectors, the price of domestic natural gas in China will increase significantly.
The effect on the global energy market
LNG Shipping
Introduction
One of the most important contributions of VNG is in the Shipping sector, which will be the subject of this chapter.
The contribution of LNG to the shipping industry
On the other hand, China's fleet is constantly expanding and its value is now 5.93 billion (Won et al., 2014). In the coming years, Vessels Value estimates that Chinese shipyards will increase their market share of LNG Carriers, and in this way competition between Japanese and South Korean counterparts will increase (Won et al., 2014). Germany, on the other hand, avoids complying with the law and is only concerned with the construction of LNG terminals around the world in order to be able to import ever-increasing quantities.
How much demand there is is evident from Vessels Value data on the rental price of these ships: compared to previous years, the rates have increased fivefold. This automatically means that Germany, as an importer of LNG, will be dependent on the capabilities and business strategies formed mainly by Greek shipowners.
Conclusion
The global liquefied natural gas (LNG) industry has developed in recent years, especially after 2014, and can now be considered a "mature" international business. Of course, it is important to know that Qatar is the largest supplier of liquefied natural gas (LNG) in the world. As natural gas can replace other sources of energy such as coal and lignite as the main fuel for global electricity generation, the global amount of gas demand will increase further, and an unknown factor is that it could increase the global demand for LNG.
In terms of Eurasia's geopolitical and energy chessboard, the growing importance of liquefied natural gas (LNG) in the potential European energy mix will provide Europe with a competitive advantage over Russia. Marketwatch (2021) Liquefied Natural Gas (LNG) Market 2021 Global Share, Growth, Size, Opportunities, Trends, Regional Overview, Key Companies Analysis and Key Country Forecast to 2025 Retrieved from: https://www .marketwatch.com/ press release/liquefied-natural-gas-lng-market-2021-global-share-growth-size-.