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24-03-2014-Gastech

Unconventional Markets for Unconventional Gas? An IEF Thought-Leaders Roundtable in association with the Gastech VIP Programme

Seoul, South Korea

The increasing availability of unconventional gas supplies from shale and deep water deposits is already influencing producer-consumer relationships. Market observers are weighing the likelihood that consuming countries will continue importing LNG from long-standing suppliers against the possibility that they may seize the opportunity of a more diverse supply base to seek out new sellers or renegotiate existing deals. 

Many see in this development a game changer on at least three fronts. First, it may be the beginning of a trend towards an integrated global gas market, where price differences among North America, Europe and Asia - the three main international gas markets - will decline or disappear all together, much like it is the case in the oil market.

Second, it may lead to the establishment of a new pricing mechanism based on spot transactions rather than on long-term contracts. And third, over the long-term, it might generate incentives for fuel switching in favour of gas, should its greater abundance trump the price-competitiveness of other fuels, most notably oil. 

How likely is the shift from the conventional world of three separate regional gas markets to an unconventional one of a single global gas market? How likely is it that the conventional method of pricing gas through long-term contracts in Asia and most of Europe may gives way to the less-conventional method of doing so through short-term, spot transactions? 

This IEF-Gastech roundtable explored these questions with a select group of thought leaders, with the aim of promoting greater understanding of the opportunities and challenges involved in the on-going transformation of international gas markets.

An IEF Dialogue Insights report summarising the discussion and highlighting key insights for further consideration will be delivered during the month of April.

Key Links:

Gastech Korea

Previous IEF Thought-Leaders Roundtables:

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