Center for external economic studies
Institute for International Economic and Political Studies
Russian Academy of Sciences
Ph. D. (Economics)
We are witnessing an active formation of a new global energy market that is based on trade in natural gas. This process will necessarily entail establishment of new interdependencies and geopolitical groupings, production cooperation chains and (regional or even global) price cartels and, in the short term, it is going to have a far-reaching effect on global economy. As natural gas becomes an object of global trade, it turns into a decisive factor of sustainable development. Besides, natural gas will mean a cleaner environment for absolutely all consumers.
Formation of global gas market
Emergence of a global gas market is made possible by both the wide-scale construction of long-distance pipelines and the
changes taking place in gas industry itself. Formerly it was believed that it might only be cost-effective to transport natural gas in gaseous form via pipelines, i.e. over land. There can be no transoceanic pipelines. However, if you cool natural gas to a temperature around minus 162° C it turns into a liquid named LNG (Liquefied Natural Gas), which can be transported in special tankers over enormous distances.
At the delivery point, liquefied natural gas is brought back to its original state at LNG regasification plants. This has been traditionally a very costly process. However, it is very efficient (the volume of methane, when liquefied, is 600 times less), making it possible to transport an enormous quantity of energy in a single cargo container - a single shipment is equivalent to 5% of US daily gas consumption. Besides, the previously high costs of terminals and tankers are actually going down as recent technological and design improvements have resulted in an almost 30% cost reduction.
Today, we are witnessing the start of a new era in which natural gas is going ... Читать далее