ENTSOG GRIP South - Main Report

WorldMarket in LNG in 2012

horizontal drilling, shale gas productionhas increased so significantly that theUS couldpotentially become a significant exporter of LNG over the next decade and beyond. In2012 theworld LNG trade amounted to 522million cubicmeters of gas in liquid form, 2% less than2011 (532millionm³). Of this total amount, 20%was des- tined for Europe with over 48% of this amount going to the southern region. 12% of the LNG traded during 2012was destined for the South Region, most of which comes from the At- lantic Basin, who are highly reliant on the South Re- gion as a place to export to, with over 31% of their ex- ports destined for the South Region. 5% of exports from theMiddle East and just 2% of exports from the PacificBasinwere destined for the SouthRegion. Useof LNG isa reliableway to increase thediversifica- tion of supply sources. It also allows for greater sea- sonality of demand as it is generally available in both long term and short term contracts. This short term supply provides greater flexibility in the supply of natural gas. These short term contracts represented 12%of overall LNG trade in theSouthRegion in2012. The short-term contracts allow operators to avoid committing to one area of supply for long durations and can also offer more attractive prices than long term contracts, hence their popularity throughout Europe and the South Region. The diversification of supply in the SouthRegion, largely coming from LNG, is illustratedwell in Figure 4.8.

World

EU-27 South Region

AtlanticBasin Algeria

5% 2% 2% 0% 8% 1% 6%

3% 1% 0% 0% 3% 1% 1% 9% 0% 0% 9% 0% 9% 0% 0% 0% 0% 0% 1% 0% 1%

3% 0% 0% 0% 3% 1% 1% 8% 0% 0% 2% 0% 2% 0% 0% 0% 0% 0% 1% 0% 1%

Egypt

Equatorial Guinea

Libya

Nigeria Norway

Trinidad&Tobago Atlantic Basin Total

24%

MiddleEast Abu Dhabi

2% 3%

Oman Qatar Yemen

32%

2%

Middle East Total

40%

PacificBasin Australia

9% 3% 0% 8%

Brunei

USA

Indonesia Malaysia

10%

Peru

2% 5%

Russia

Pacific Basin Total

36%

WorldMarket Total

100%

19%

10%

Table 4.1: Share of each country as a supplier in trade for the World, EU-27 and South Region (Source: GIIGNL 2012)

100 %

30 mt

100

16

18

12

25

80

88

84

82

20

60

15

40

10

20

5

0

0

France

Portugal

Spain

SouthRegion

France

Portugal

Spain

SouthRegion

Nigeria

Algeria

Qatar

Peru

long-term

short-term

Trinidad& Tobago

Norway

Egypt

Figure 4.7: Long term vs. Short term contracts in LNG destined for the South Region in 2012with the total for the South Region shown (Source: GIIGNL, 2012)

Figure 4.8 : Sources of LNG imported into the South Region in 2012 by country (Source: GIIGNL, 2012)

The LNG supply chain to the South Region is highly diverse, with imports coming from 7 different countries in 2012. This diversification is set to increase with in­ creasing supplies from some countries and new sources entering themarket, such as the USA’s strengthening position or Australian ongoing developments. These factscombinedwith the responsiveness topriceof LNGmake it anappealingsource of diversification for gas imports.

ENTSOG–GRIPSouth 2013–2022 |

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