The Key Differences Between the Natural Gas Markets in Asia, Europe and North America
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The major difference of the natural gas market, which sets it apart from the truly global oil market, is that the former has historically been developed with respect to the regional supply bases. This was primarily defined by existing technology for natural gas transportation and availability of other energy resource: primary oil and coal. …show more content…
Western Europe represents 17.5% of global consumption and 8.5% of global production of natural gas. Conventional natural gas is produced mostly in the North Sea region by Norway and The Netherlands. There are shale gas reserves in Poland, Germany, Ukraine and many other European countries. Development of the reserves is stalled by environmental regulations. Natural gas deficit is covered through supply from Russia and Algeria via extended transit pipeline systems and by LNG supply from Africa (Table 3).
Despite to significant drop in natural gas consumption, due to slowing economy and price spike, Western Europe is still strongly dependant on foreign supply, mostly from Russia. Some of the EU countries, like Germany and Poland, are connected to the trans-continental pipeline systems like Druzhba or North Stream. Russia is persistently looking for increase of its share in Europe to supply natural gas to Eastern Europe and Italy.
Table 3: Natural gas market balance and trade for Western Europe
Source: BP Statistical Review of World Energy 2012
Russian monopoly Gazprom exports gas to Europe under long-term (up to 25 years) contracts that typically based on inter-governmental agreements. Underground gas storage facilities (UGS) owned by Gazprom and swap operations in European states also increase Russian gas sales.
UK only has a true market for natural gas. Gazprom is also actively involved in the European gas