Research at EMF


EMF 23: World Natural Gas Markets and Trade

Project (Completed)
Ongoing

A key world energy transition over the next several decades will be the extent to which natural gas can replace coal in the electric power sector as nations seek to improve the environment.  This shift will require a significant development of international gas infrastructure and adjustments in the international gas flows. Although world gas supplies appear plentiful, underdeveloped facilities prevent this fuel from being transported and used in many countries.  The investments for fostering an international gas market will be large with substantial price risk, whether they are major pipelines, LNG facilities, or advanced gas-to-liquid (GTL) processes. Better corporate and policy decisions will need to make the connections between different regional markets in order to understand important linkages between gas prices, production, transportation and use in different countries.  

 Although politics, institutions and local conditions will continue to influence the viability of individual natural gas projects, governments and business practices are beginning to reduce the barriers that previously kept regional natural gas markets balkanized.  Cross-country trade has grown dramatically in the last few years and is expected to represent significant shares of future total gas use.  The coming decades will be a transition period, as large and lumpy capital investments will seek to connect large supply regions with growing demand markets.