The U.S. began exporting shale gas by sea this year and is projected by the International Energy Agency to become the world’s third-largest liquefied natural gas supplier in five years, Bloomberg reports.
Gas will challenge coal at European power plants and become affordable in emerging markets, where prices have been high and supplies limited, according to the IEA and Goldman Sachs Group Inc.
LNG became the world’s second most traded commodity after oil last year and demand will keep growing, Goldman says. U.S. gas is adding to the global glut triggered by new Australian supply and weakening Asian consumption. Shale is having an outsized impact on how LNG is sold, prompting spot trading in lieu of long-term contracts.
“The U.S. clearly changed the picture,” says Costanza Jacazio, a senior gas analyst with the Paris-based IEA. “It’s going basically from zero to the third-largest LNG capacity holder in the space of five years, and it brings a new flexible dimension to the LNG market.”
With supplies growing, some Asian nations like Japan are contracted to buy more than they can consume, leaving surpluses to be sold. That has lured major traders into the LNG market in recent years.
Cheniere Energy Inc. has sent 19 tankers of the liquefied gas abroad from its Sabine Pass terminal in Louisiana. By 2020, five terminals will be operating on the U.S. Gulf Coast and in Maryland.
