IGU Releases 2019 Wholesale Gas Price Survey

BARCELONA, Spain and AMSTERDAM, May 13, 2019 /PRNewswire/ -- The International Gas Union (IGU) today released its 2019 Wholesale Gas Price Survey at Flame 2019. The survey is the eleventh to be undertaken in a series that began in 2007. The eleven surveys examine the dramatic changes in wholesale price formation mechanisms during a period of key developments in the global gas market.

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Key findings of this year's survey include:

    --  The share of gas on gas competition rose by half a percentage point
        between the 2017 and 2018 surveys to 47%. That largely reflected the
        increasing share of spot LNG cargoes in LNG imports and rapidly growing
        US consumption, which more than offset the declining share in pipeline
        imports, as a result of reduced European pipeline imports and increased
        China pipeline imports. The oil price escalation share declined by a
        quarter of a percentage point to 19%, with the loss in LNG imports being
        partly offset by gains in pipeline imports and domestic production in
        China.
    --  2018 saw the most significant change in LNG imports since the IGU began
        the surveys, driven by the continued rise in Henry Hub priced US LNG
        exports as well as a general rise in spot LNG cargoes. The share of spot
        LNG imports reached just over 30% of total LNG imports in 2018,
        amounting to some 126 BCM - an increase of 65 BCM since 2016, or 10.5
        percentage points. Gas on gas competition for LNG imports in the traded
        markets, mainly in Northwest Europe, added another 4.5% of total LNG
        imports. Gas on gas competition accounted for more than 50% of LNG
        imports into Europe in 2018 - compared to 33% in 2017, while the gas on
        gas competition in China and the Indian sub-continent rose from 24% to
        30.5% and for the Asia Pacific importers (mainly Japan, Korea and
        Taiwan) from 18% to 24%. Despite the growth in LNG imports between 2017
        and 2018 of some 22 BCM or 5.5%, the actual volume of oil price
        escalation imports declined for the first time ever.
    --  Wholesale prices outside North America rose continuously between 2005
        and 2014, declined in most regions in 2015 and 2016, before rebounding
        in 2017 and 2018 in almost all regions. This was mainly in Europe, the
        Asia Pacific LNG importers, China and India, as oil prices increased and
        spot markets tightened. Prices also increased in the more regulated
        regions such as Africa and the Middle East, as authorities continued
        policies to increase prices to more market or economic levels. The
        average world wholesale price in 2018 was $4.38 per MMBTU - the highest
        average price since 2014.
    --  Global gas prices have been converging continuously since 2005,
        indicating further globalisation of the gas markets, at least up until
        2018, when some divergence occurred. It is also concluded that there is
        more gas price convergence amongst countries (1) with market related
        pricing, (2) which are connected with the global gas market through gas
        imports, (3) with oil-indexed gas prices, and (4) within Europe. The
        trend of global gas price convergence is more distinct when we exclude
        North America.

The Wholesale Gas Price Report is a vital reference for the natural gas industry around the world. In the most recent survey responses were received for countries that cover 95% of total world consumption. To download the full report, please visit https://www.igu.org/publication/302319

About The International Gas Union (IGU)

The International Gas Union (IGU) was founded in 1931 and is a worldwide non-profit organisation aimed at promoting the political, technical and economic progress of the gas industry. The Union has more than 150 members worldwide on all continents, representing approximately 95% of the world gas market. The members of the IGU are national associations and corporations within the gas industry worldwide. The IGU organises the World Gas Conference (WGC) every three years, with the forthcoming WGC taking place in Daegu, Republic of Korea, in June 2021. The IGU's working organisation covers all aspects of the gas industry from exploration and production, storage, LNG, distribution and natural gas utilisation in all market segments. www.igu.org

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SOURCE The International Gas Union (IGU)