Effects of shale gas development in North America on the Asia Pacific Gas Market

초록

The United States will be able to export some of thenatural gas production thank to a faster than expected shale gas development. The US shale gas development will lead to increased competition among potential suppliers such as the United States, Qatar, Australia, Canada, Russia, andEastAfrica and within the country to speed up their gas development projects as to foothold in the prized Asian market. As a result the natural gas price will decrease in the long term. If future natural gas prices fall below the average prices of natural gas imports under the oil price indexed long term contracts by the Korea Gas Corporation (KOGAS), which has the monopoly of gas imports and wholesale distribution in Korea, the liberalization of the natural gas imports will be requested. Such liberalization will discriminate existing consumers compared to new consumers. Under inflexiblelong-termcontractslinked to theoil price indexation, KOGAS has been restricted to therole ofliquefied natural gas (LNG)importsanddomesticwholesaledistribution. With the contractual flexibility KOGAS may play an active role in the LNG trading and production. Korea may establish a LNG trading hub in the North East Asia region, which is the largest LNG consumers in the world, as it possesses required infrastructure such as LNG import terminals and storage facilities.