Europe Is Swimming In Gas
The U.S. is starting to supply gas to Europe. The surplus of domestic production and the active procurement of LNG in Qatar allowed the country to re-export gas using the so-called arbitrage transactions which means transferring purchased gas to new buyers. The first gas transport will come to the UK this weekend.
The re-export of gas to Europe from the U.S. indicates that shale gas is having an increasing impact on the global gas market. According to the International Energy Agency (IEA), the excess supply may cause gas suppliers to reduce prices.
In February, Gazprom postponed the project of the production of LNG at the giant Shtokman field in the Barents Sea, and one of the reasons for it was the fact that the target market – United States – does not need additional supplies.
On October 11, the Financial Times released a promise that in the next five years, the U.S. could become a major supplier of gas and compete with Russia and Middle Eastern countries in the Asia Pacific region. As noted in the comments by an employee of consultancy PFC Energy Nikos Tsafos, if the Americans would have supplied at least 10% of gas produced, they would become the market leader.
In 2009 the U.S. produced 620 billion cubic meters of gas, which is almost 40 billion more than Russia. Now the share of shale fuels in total gas production in America, according to the Energy Department of the U.S., is 15%.
The U.S. is the largest producer of shale gas in the world. In one year, gas production from unconventional sources, mainly from shale deposits, has jumped by 30 billion cubic meters. America’s need in the imported liquefied gas has dropped sharply, and its price has dropped more than two-fold.