The next decade to hold greater international flows of gas

Manas Satapathy, Nuri Demirdoven, Al Escher, and Muqsit Ashraf, of SBC, take a look at global gas markets over the next decade

Shale gas has transformed the North American natural gas market, but its potential to influence global markets is often called into question. Our analyses predict greater international flows of gas over the next decade, as a result of surging US supply.  Initially, these flows may not affect the existing stratification of international gas markets. But, eventually, volumes can be sufficient to influence and possibly break the world’s three-way, regional gas-market model: oil-linked Asia; gas-on-gas North America; and Europe, a hybrid of both. In this scenario, the approximate gas-price ratio of 1:2:4 for North America, Europe and Asia will not hold. Interestingly, in the 10 years to 2008, na