Unconventional Gas Impact on the LNG Industry

Unconventional gas plays double role in the case of LNG. Firstly development of unconventional resources could result in significant LNG importers demand decrease and secondly unconventional resources represent potential for new sources of LNG supply. In past few years unconventional gas production in North America has been increasing constantly. This unconventional production has reduced natural gas prices and LNG imports in USA. This unconventional gas rise together with global economic crises has significantly impacted LNG demand in this world region. The previous LNG demand projection (2007) compared with present have dropped by two thirds over the 2010-20 period. In rest of the world LNG demand was mostly impacted by economic recession. In Europe projected demand have fell by over a third, but Asian markets demand, despite general pessimistic outlook, is greater than expected. Currently, petroleum industry is developing unconventional gas production rapidly, so potential decrease of LNG demand in rest of the world due to unconventional gas production increase becomes significant issue in the LNG industry. But on the other hand, Europe does not have the same technological level of unconventional gas production and the decrease of LNG demand in North America releases additional LNG supply for Eurasia, which could be the way for diversification of natural gas sources for Europe.