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Liquefied Natural Gas

Gas in the European Energy Transition: Challenges and Opportunities

Title Original Language: 
Le gaz dans la Transition Energétique Européenne: Enjeux et Opportunités
Abstract Original Language: 
Les performances environnementales du gaz lui permettent de réduire rapidement et dès maintenant les émissions de CO2 du secteur électrique quand il remplace le charbon, deux fois plus émetteur. Sa flexibilité lui permet aussi de pallier l'intermittence du solaire et de l'éolien, facilitant ainsi le développement des ENRs. Il contribue de même à un approvisionnement électrique fiable et réduit les coûts d'équilibrage du système électrique. Il pourrait aussi être utile pour réduire les émissions des transports routiers et maritimes.
Le gaz a donc toute sa place dans le futur bouquet énergétique européen, a condition de décarboner encore son usage, d'augmenter l'intégration et la compétitivité du marché gazier européen et d'assurer la sécurité d'un approvisionnement qui dépendra de plus de plus des importations extra-européennes.
Original Language: 
Date of Editorial Board meeting: 
Publication date: 
Monday, January 15, 2018
Abstract in English: 
Thanks to its environmental performance, gas can help to quickly reduce the CO2 emissions of the electricity production when replacing the twice-as-emitting coal power. Its flexibility also help make up for the intermittence of the sun and wind powers, thus facilitating to the development of the renewable energy production. It similarly contributes to a reliable electricity supply and reduce the balancing cost of the electric system. It could also be used in the near future to reduce the emissions of the road and maritime transportation sectors.
In nutshell, gas could play a key role within the future European Energy Cluster, provided the further decarbonization of it usage, the increase in the integration and competitiveness of the European gas market, and the securing of its supply-which will increasingly depend on extra-European imports.
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90
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Surging Liquefied Natural Gas Trade

Date of Editorial Board meeting: 
Publication date: 
Wednesday, January 20, 2016
Abstract in English: 
A surge in new supplies of liquefied natural gas (LNG) is about to hit the global market over the next several years. LNG export projects already under construction worldwide will add up to 175 billion cubic meters (bcm) of LNG capacity by 2020, mainly from Australia and the United States, and additional projects will move ahead as developers line up more customers.
The rise in LNG supplies will encounter substantially lower gas prices than in recent years and a slowdown in global gas demand, raising questions about the economics of LNG projects. For US exporters, liquefaction and tanker transport will add about $5.30 per million British thermal units (mbtu) in costs for LNG sent to Japan. The cost is similar to liquefy, transport, and regasify LNG sent to Europe, where the cost of regasifying LNG needs to be included to compare its price with pipeline gas.1 With average prices for LNG falling below $8 per mbtu in Japan and even lower in Europe, there is little margin for profit even with Henry Hub prices currently at about $2.40 per mbtu.2 However, LNG exporters are likely to continue selling as long as their variable costs can be covered.
For US exporters, the outlook is more favorable for companies who have concluded a final investment decision to go ahead with an LNG export project. Most of these projects are under construction and have much of their planned output already contracted to sell over twenty years. Most of the US sales will not begin until after the next two years, when demand may be stronger.
The majority of Australia’s projects will already be up and running by 2018 and therefore pose less competition for US exporters seeking to acquire new LNG customers. US projects are also ahead of proposed projects offshore East Africa and in the Eastern Mediterranean, which may not come online until after 2020.
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Number of pages: 
28
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