Infographic visualizing the gas market and the direction in which it is heading. The gas market is rapidly changing. After decades with little interest happening, the global gas market has shown unprecedented dynamism in the past ten years. A comprehensive discussion of, the essentials of the gas markets requires and deserves a substantial report. Infographic and 'Gas Market Outlook 2014' are focussing on current trends and tendencies for the European, North-American and Asian gas market. Download full report: http://bit.ly/GasMarket2014 Client Atradius

1. managing risk, enabling trade
GAS MARKET OUTLOOK August 2014
NATURAL GAS AND OIL PRICE$
THE IMPORTANCE OF GAS
IN US ENERGY CONSUMPTION
RAPID GROWTH IN DEMAND
HAS CREATED A SUPPLY DEFICIT
Gas Market Asia Pacific
Energy Market America
Gas Market Europe
25
20
15
10
5
0
2003 2004 2005 2006 2007 2008 2009 2011 2012
US$PERMBTU
OIL GAS COAL NUCLEAR RENEWABLES
TOTAL GAS CONSUMPTION WORLDWIDE
WHAT HAS CAUSED THESE
DEVELOPMENTS IN THE GAS MARKET?
THE WORLD ENERGY MIX
GAS is one of the cleanest fossil fuels,
but its share of the world energy mix
is still behind the two main energy sources; oil and coal
GAS CONSUMING SECTORS
Before 2005 the oil
and gas prices showed a
large co-movement.
More recently, the oil price
and gas prices have
started to diverge
The extent of divergence
from the oil price after 2005
is different for the
three markets, meaning that
the gas prices for the markets
are also diverging
21
1
2
EUROPE
2012 2018 2035
19 23 26 (*)
JAPAN LNG
2012 2018 2035
16 14 15 (*)
BRENT OIL
2012 2018 2035
9 11 13 (*)
HENRY HUB 2012 2018 2035
3 5 6 (*)
REAL ESTATE SECTOR
heating and cooking.
TRANSPORT SECTOR
great increase.
POWER SECTOR
electricity.
CHEMICALS SECTOR
ammonia and plastics.
TO ANSWER THAT QUESTION
>>We refer to the mechanisms used for
contracting and pricing,
which differ fundamentally between markets.
ASIA
-Long term contracting
-Oil price indexation
EUROPE
-Long term contracting
-Oil price indexation
-supply and demand based
(half of the market)
USA
-supply and demand based
(full market)
2000: 38%
2012: 32%
2000: 22%
2012: 28%
2000: 22%
2012: 16%
2000: 6%
2012: 6%
2000: 2%
2012: 8%
-6% +6% -6% +0% +6%
At the expense of oil and coal, consumption of natural gas and,
to a far lesser extent, renewables has gone up.
There is a gradual decline in production, with consumption
being more of less constant since 2000, but declining since 2010.
LNG trade is by way of liquefaction of gas ( reducing the volume more than 600 times),
transport by tankers and subsequently gasification for delivery to consumers
However prices have gone up and therefore do not reflect changes
in supply and demand. The explanation is the strong link with the oil price.
By 2012, 27% of total US energy consumption consisted of natural gas.
Making it the second most important energy source after oil.
800
600
400
200
0
2000 2002 2004 2008 2010 20122006
price (r) demand supply
600
500
400
300
200
100
2000 2002 2004 2008 2010 20122006
consumption production price
in 2000
in 2000
in 2012
311bcm per annum
664bcm per annum
in 2000 in 2012
180bcm per annum
286bcm per annum
ANNUAL INCREASE of DEMAND
9,5%
+
OIL 31% COAL 29% GAS 21%
PAST
PRESENT
THE US SHALE GAS REVOLUTION
vertical drilling
horizontal drilling
150 YEARS OF DRILL EXPERIENCE IN THE US
-Horizontal drilling and fracturing were
increasingly applied.
- No contamination of ground water
due to the use of chemicals in
hydraulic fracturing.
-Used to be a small company job
Now all the big oil companies are
investing as well.
South Korea & Taiwan 12%
+ Emerging Asia
1
Production in Asia kept pace
with demand until 2006,
after which imports
had to fill the gap.
1
In line with these
developments, prices
have risen sharply
over the period
USD 4 MBtu
in 2012
USD 16,5MBtu
high economic growthswitching to gas (pollution)
THE ESSENTIALS OF LIQUID NATURAL GAS
GAS
When gas is exploited,
its energy intensity per volume unit
is many times lower that that of oil.
Liquid gas has an energy intensity
of approximately 60% of diesel.
The natural gas gets purified.
Then the gas is cooled and put into
specially designed cryogenic vessels
40% 23%
RESIDENTIAL
BUILDINGS SECTOR
INDUSTRY
SECTOR
31%
POWER
GENERATION SECTOR
THE MOST IMPORTANT EUROPEAN SECTORS IN TERMS OF GAS CONSUMPTION
USA Russia Iran China Japan Saudi
Arabia
Canada Other
22% 13% 5% 4% 3% 3% 3% 47%
TOTAL GAS CONSUMPTION /SOURCE: BP STATISTICAL REVIEW 2013
NATURAL GAS AND OIL PRICES /SOURCE: BP STATISTICS, WORLD BANK, IEA
US ENERGY MIX /SOURCE: IEA
NATURAL GAS AND OIL PRICES /SOURCE: BP STATISTICS, IEA
GAS MARKET ASIA-PACIFIC /SOURCE: IEA
GAS MARKET EUROPE /SOURCE: BP STATISTICS
SOURCES
60%
(*)US$ per Mbtu
Read the full report on the atradius site in the publications section