The Evolving Dynamics of Eurasian Supply and Demand in the Increasingly Integrated Global Gas Market

Houston, Texas, August 8, 2016 – RBAC’s Founder, Dr. Robert Brooks, will share important insights into the evolving dynamics of Eurasian supply and demand in an increasingly integrated global gas market as well as moderating the oil & gas modeling session at the 1st IAEE Eurasian Conference being held later this month in Baku, Azerbaijan.

Ten years ago the buzz in the energy industry was largely focused on the emerging global market for natural gas. This market integration was to come about as a result of rapidly declining gas production in North America.  Many tens of billions of dollars were invested in building liquefaction terminals worldwide and scores of import terminals along the North American coastlines in preparation for massive imports of LNG.

The envisioned global gas market integration, however, never took place. Instead we got the shale gas revolution.  Once gas production began to explode in North America, the LNG terminals were not built, terribly underutilized, or not utilized at all.  Desperation provided a means for a possible solution.  Cheniere Partners, a small but ambitious firm which had built the huge Sabine Pass LNG import facility in Louisiana, began promoting the idea that there was now so much gas supply that the industry should become exporters rather than importers of LNG.  Once they began to have success in getting commitments from buyers looking for both LNG and greater diversity of supply, many of the other US and Canadian import terminal owners began to develop their own export plans.

In 2016, the world is again set for global integration, but this time North America is poised to play a different role, that of a major LNG supplier to the world. However, it is not a given that North America will be successful in this endeavor. Major competition from Australia, Qatar and Russian LNG, as well as pipeline gas from the greater Caspian region make this a wide open game.  Adding to this, a great deal of disagreement regarding the role of natural gas in reducing the threat of climate change and a diminishing appetite for LNG in Asia make the outcome of the game even more uncertain.  Designing the potential scenarios and projecting the possible outcomes requires a sophisticated modeling system.

G2M2™ is a modeling system used to analyze and forecast the future of global gas integration. Similar in many ways to its predecessor the GPCM Natural Gas Market Forecasting System™ for North America, G2M2 is a system which allows users to run a wide variety of scenarios starting with RBAC’s base case forecast and customizing the database by adding their own assumptions.  Unlike GPCM, G2M2 models an amalgam of natural gas markets, some of which are competitive like the US and Canada, some of which are slowly liberalizing like Europe, and many in which the government and its national companies are decidedly non-competitive.  For this reason the G2M2 model has been designed to handle both the current mix of very different systems in a global arena as well as to envision possibilities for evolution to other more integrated markets.

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