Natural gas market review 2009 : Optimising investments and ensuring security in a high-priced environment

The global economic crisis has not spared the gas sector. Over the past year, we have moved from a tight supply and demand balance with extremely high gas prices to an easing one with plummeting gas prices. The Natural Gas Market Review 2009 looks at various developments including the rapid increase in US unconventional gas production, new volumes of liquefied natural gas coming on stream, security of supply following the Russian-Ukraine crisis, and weakening investment in the different parts of the gas value chain in a selection of IEA countries - the United States, Canada, Spain, Norway, the. Read more... The global economic crisis has not spared the gas sector. Over the past year, we have moved from a tight supply and demand balance with extremely high gas prices to an easing one with plummeting gas prices. Since the last quarter of 2008, demand has been declining dramatically, essentially because of the global recession. Yet significant new volumes of liquefied natural gas will come on stream within the next few years, and United States unconventional gas production has risen rapidly, with global consequences. It remains to be seen how these demand and supply pressures will play out, particularly in the pivotal power sector, in both OECD and non-OECD countries.Meanwhile, the security of gas supplies has once again become a critical issue, in particular in Europe after it experienced its worst supply disruption during the Russian-Ukraine crisis in January 2009.Moreover, the current market climate of weakening demand, lower prices and regulatory uncertainties added to the tough financial environment are likely to jeopardise investments, in particular in capital-intensive projects, further undermining long-term energy security in the most fundamental way when economies recover.The Natural Gas Market Review 2009 looks at these and other major developments and challenges in the different parts of the gas value chain in a selection of IEA countries - The United States, Canada, Spain, Norway, the Netherlands, and Turkey, as well as in non-IEA member countries in the Middle East, North Africa, Southeast Asia, and China. Natural Gas FOREWORD 5 ACKNOWLEDGEMENTS 7 TABLE OF CONTENTS 9 EXECUTIVE SUMMARY 15 RECENT EVENTS 19 Gas in an era of global recession 19 The evolution of gas prices 24 Trading developments in Western Europe 30 The 2009 Russia – Ukraine gas dispute 37 Gas Exporting Countries Forum 43 INVESTMENTS 47 Introduction 47 Supply investments in majorproducing regions 49 Investment in liquefaction capacity 63 Investments in regasification and pipelines 71 Investments in storage 86 The impact of the financial crisis on gas project financing 92 DEVELOPMENTS IN THE LNG MARKETS 97 An era of global projects begins 97 2008 LNG markets : sharpc ontrast between the first and second halves 98 LNG business outlook : 2009-13 101 MARKET DEVELOPMENTS 111 Gas for power 111 Towards greater transparency 117 NON-OECD COUNTRIES AND REGIONS 125 China 125 India 130 Southeast Asia 133 West Africa 138 Middle East and North Africa 140 OECD COUNTRIES AND REGIONS 149 North America 149 Norway 155 Netherlands 159 Spain 164 Turkey 170 ANNEX 1: ABBREVIATIONS 175 ANNEX 2: GLOSSARY 179 ANNEX 3: CONVERSION FACTORS 183 The Natural Gas Market Review 2009 addresses these major developments, assessing investment in natural gas projects (LNG, pipelines, upstream), escalating costs, the activities of international oil and gas companies, and gas demand in the power sector. In addition, the publication includes data and forecasts on OECD and non-OECD regions to 2015 and in-depth reviews of five OECD countries and regions including the European Union