Bharat Book Bureau

Overview and Analysis of the Global Natural Gas Industry

Press Release   •   Sep 15, 2010 11:52 IST

Natural Gas Industry to 2016 - Abundance of Unconventional Gas Changing the Industry Landscape

The study provides an in-depth analysis of the natural gas market across the world and highlights the various concerns, shifting trends and major players in the region. The report provides forecasts for the exploration and production industry, natural gas pipeline industry, natural gas storage industry, unconventional resources and production and consumption analysis till 2016. The report also provides consumption forecasts in different geographic regions. The report provides in-depth analysis of the key trends and challenges in the natural gas market across the world. An analysis of the competitive scenario of the different segments is provided. ( )

Increased Global LNG Supply Leading To A Negative Outlook For The Industry
The global economic crisis has led to a significant drop in natural gas demand globally. The global natural gas demand dropped drastically in 2009, which led to a huge slump in natural gas prices. The excess production and low demand have forced the natural gas prices to remain low at an average of $4 - $4.5 per MMBTU, even with crude oil prices hovering at around $80 a barrel. LNG demand too has suffered, as a result of it being interdependent on natural gas demand. LNG prices have dropped significantly as a result in the recent past. Prices of spot LNG in Asia for immediate delivery slumped to as low as $3.8 per MMBTU in May 2010 from about $25 MMBTU in 2008, as the global recession cut demand from Japan and South Korea.

The excess of natural gas supplies in the world has led the LNG spot prices to new lows. The drop in spot LNG prices has made buyers rethink long term LNG contracts. Importers can now easily tap the global market for spot cargoes at lower prices than the long-term supply agreements. Consequently, the LNG industry will be buyer driven until 2011, as supplies would continue to exceed demand as in 2009. The ‘tough phase’ of the industry could be potentially aggravated by upcoming additional new LNG facilities. This is in sharp contrast to the supplier-driven LNG market of 2008. Along with this, the major factor of increasing natural gas supplies from unconventional sources is expected to adversely affect the industry. These factors have significantly altered the supply situation, inducing a surplus in supply.

Storage Will Keep The Downward Pressure On Prices
With the discoveries of abundant shale gas deposits and the effects of the global recession having a negative effect on the demand, the natural gas prices are witnessing a downward pressure. By mid summer of 2010 the inventories in US were about 18 % high from the five year average. In Nov 2009 the inventories reached a record high of 3.84 trillion cubic feet (tcf). With the companies beginning to inject gas in storages for winter, inventories will continue to rise.

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