The scale, smooth supply curve and flexible nature of U.S. supply entering an oversupplied market will result in low prices in the short-term that could stimulate demand in the very long tail of markets who import LNG and the use of natural gas in applications beyond generation.

At the end of 2015, there were 34 countries with regasification capacity, but just three countries (Japan, South Korea and China) make up ~60% of the market today.1 For example, markets like India have ambitious targets to grow LNG imports and increase the use of city gas and natural gas in the industrial sector (eg. fertilizer and steel plants). At the right price, with FSRUs and provided midstream infrastructure is developed, India could grow significantly. Other markets like Chile, Pakistan, Kuwait, Thailand, etc… are all importers with potential for growth. Europe is also another interesting market. In the last few years, the share of natural gas in generation has declined, while renewables has increased and coal has stayed fairly stable. However, in 2015, LNG imports grew by ~16%, highest in the last 10 years. In Western Europe, there is already ~180 bcm import capacity, and there is growth in other parts of Europe like the Baltics and Eastern Europe (Lithuania and Poland). Medium to longer-term, there is also the potential to grow natural gas for transport (road and marine).2 This paper will focus on what it would take to stimulate demand in the long tail of markets, the technologies and operating models that will support their growth, and the potential uses of natural gas in these markets.

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