International Natural Gas Markets

Vincent Kaminski

As mentioned in Chapter 8, one can identify several natural gas pricing regimes worldwide, with huge disparities in terms of price levels and price variability. This is likely to change over the next decade, creating many trading opportunities as well as potential risks for those who find themselves on the wrong side of history. The future of this market will be defined by changes in the technology of natural gas production and distribution, the inevitable march towards market-based solutions across the globe and growing concerns about the environmental consequences of climate change. Natural gas markets will become more integrated, with links created through LNG and, possibly, carbon trade. As always, it is easier to see the final outcome of many interacting forces. It is the timing and path of transition that remain unknown. Any trader or analyst who tries to anticipate future moves in such a complex game of multidimensional chess, with many participating players, should think through the potential consequences of the following developments:

• • the impact of the shale revolution on the global natural gas market;

• • the drive towards