LNG's
role in the global gas market
Posted: 29 March 2004
The International Gas Union (IGU) focused on LNG issues during
its recent Executive Committee meeting held on 26 March 2004 in
Doha, Qatar.
IGU sees a substantial potential for further growth of the LNG
market and the international trade in LNG.
IGU confirms thereby the general views expressed during the LNG
14 Conference and Exhibition held on 21-24 March 2004, also in Doha.
In order to realise this potential, IGU draws the attention to
the following 7 points:
- Ever existing market uncertainties ask for enough flexibility
in LNG contracts without losing the necessary fundamentals of
long terms contracts
- To enable the LNG industry to make use of flexibility in contracts
due attention by the relevant authorities should be given to set
gas quality standards which will enhance the interchangeability
of LNG supplies. IGU, together with other relevant international
organisations will assist in developing such standards
- Contract flexibility together with LNG interchangeability will
also greatly enhance security of supply, which in turn will enhance
the further acceptance of natural gas as the fuel of choice by
gas import dependent countries
- Governments, regional and national authorities are strongly
recommended to support in a timely manner the realisation and
necessary investments in re-gasification terminals by the LNG
industry. At present, this lack in sense of urgency seems to be
the most important factor leading to bottlenecks
- Although it is expected that costs of the LNG Chain will further
decrease, a structural increase of gas prices should not be excluded
due to the very strong demand from four major economic regions
in the world: North America, India, China, and Europe
- The better the relevant authorities around the world are able
to handle the "nimby" (i.e. "not in my backyard")
syndrome, the higher the chances will be that the before mentioned
price increases will not occur nor will they be mitigated
- Policy measures which run counter the proper functioning of
the market forces (eg. price caps, excluding certain sectors of
using natural gas requiring third party access of re-gasification
terminals, requiring construction of deliberate overcapacity)
will deteriorate the business climate for the LNG industry to
the detriment of economic growth and of the environment.
International Gas Union (IGU) is a global non-commercial, non-political
and non-governmental organisation.
Established in 1931 with the purpose to promote the technical and
economic Progress of the gas industry, it now has 80 members from
67 Countries all over the world.
IGU members are generally the most representative gas organisations
or companies of a country, which may encompass producers, transporters,
distributors, technological and scientific institutes.
IGU is registered in Vevey, Switzerland with the Secretariat located
in Denmark, hosted by the National Danish Energy Company, DONG AS.
IGU — together with the Gas Technology Institute (GTI) and
International Institute of Refrigeration (IIR) — is official
sponsor of the LNG Conferences of which LNG 14 was held in Doha
on 21-24 March 2004.
LNG 15 is to be held in Barcelona, Spain on 24-27 April 2007.
LNG 16 is planned for 2010 in Algeria.

Posted by Richard Price,
Editor Pipeline Magazine
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