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Editorial comment

Adrienne Blume, Editor

Large-scale production of shale gas in the US, which began around the turn of the century, is now feeding US exports in the form of LNG. The US is anticipated to become the world's third-largest exporter of natural gas by 2020. During that year, the country could send out as many as 8.3 Bcfd of gas, or approximately 14% of the global export volume. A significant portion of this supply will come from shale gas.

The US is also proving itself a key gas exporter with its flexibility and attractive pricing. At the end of 2016, a tanker carrying LNG from the US to Asia was sharply rerouted to unload in Mexico. Importers are seeking more cargoes on short notice, for the best available price. These dynamics could encourage the formation of an LNG spot market, similar to oil, further shifting LNG trade toward a more short-term picture.

At the 2017 CERAWeek by IHS Markit, which took place in Houston, Texas in early March, executives from both gas importing and exporting companies called for contract flexibility, destination flexibility and oil-independent pricing schemes for LNG. Also, smaller companies are anticipated to become increasingly involved in global LNG trade.

IHS Markit expects LNG demand growth to expand by 10% to 15% by 2040, representing an even faster pace of growth than global gas consumption. A significant chunk of the supply needed to meet this burgeoning growth will come from US shale gas production, as addressed in this month's special focus. GP


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FEATURED COLUMNS

Editorial Comment
-Adrienne Blume
At CERAWeek by IHS Markit, held in Houston in March, IEA Director Fatih Birol said that the world would soon see a major second wave of shale gas production from the US in response to higher energy prices and growing demand from India and China.
Regional Focus
-Shem Oirere
Mozambique and Tanzania hold an estimated 180 Tft3 and 57 Tft3 of proven natural gas reserves, respectively.


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