ENTSOG Southern Corridor (SC) Gas Regional Investment Plan (GRIP) 2014-2023 / Main Report

Gas prices have been influenced during the few recent years by two major factors: \\ The growing energy demand in Asia, supported by the nuclear accident of 11 March 2011 in Fukushima. This has driven up prices in East Asia and has sustained LNG prices in other parts of the world as well. According to Figure 4.11, spot LNG prices in November 2013 were estimated (in October 2013) to be in Japan 50% higher than in Belgium and almost five times higher than in the east coast of the USA. \\ The considerable increase of shale gas production in the USA as shown in Figure 4.12. This has pushed gas prices down in the USA. The price reduction in the USA made natural gas the preferred fuel for power generation and released quantities of coal to be exported to the rest of the world, including the EU. The increase of gas production did not yet make the USA an exporter of LNG however it is expected that this will take place in the future.

UK 26.19

Korea 38.45

Belgium 25.55

Cove Point 8.01

Japan 38.45

China 37.47

Lake Charles 7.74

Spain 26.78

Altamira 40.29

India 33.78

Rio de Janeiro 35.99

Bahia Blanca 38.45

Spot Price in €/MWh (original data in $/MMBtu)

Figure 4.11: Estimated World LNG spot prices, November 2013 landed prices Source: Federal Energy Regulatory Commission/USA:

http://www.ferc.gov/market-oversight/othr-mkts/lng/othr-lng-wld-pr-est.pdf

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Southern Corridor GRIP 2014–2023