The primary objective of this paper is to analyze the global natural gas and LNG market outlook from both the producers and buyers perspective. The paper intends to analyze how LNG producers are lining up their projects in anticipation for higher natural gas demand in Europe, Asia Pacific and in the USA. It will also review how the natural gas consuming countries are gearing up their efforts to receive increasing volumes of natural gas to meet the expected unprecedented increase in demand for natural gas. The paper forecasts regional gas demand to 2025 and also briefly discusses the challenges and opportunities that lie ahead of the LNG industry.
To set the stage, the paper first reviews the regional natural gas reserves, production and consumption as well as the direction of natural gas and LNG trade movement. Historically, oil has been the dominant source of primary energy supplies and consumption. However, because of various oil shocks and political events that have unfolded during the past three decades, the role of oil has become reduced to some extent although it still remains the dominant source of global energy. As a result of these events and environmental considerations, the share of natural gas in primary energy consumption has increased to about 24 percent at the end of 2004.
Natural gas reserves are mainly concentrated in the Middle East and Former Soviet Union (FSU), accounting for over 73 percent of global reserves at the end of 2004. Unlike global natural gas reserves, the major consuming nations are located in North America, Europe and Asia Pacific. This imbalance in resources has created an opportunity for international trade in natural gas through pipelines and LNG. North America held only 4.1 percent of global natural gas reserves at the end of 2003 but is by far the largest natural gas producer and consumer. At the end of 2004 the region accounted for 29 percent of global natural gas consumption.