The implications of global natural gas market developments for China

Journal article

The ongoing transformation of the world’s gas markets is significantly altering the positions of the major global players, with the USA and China emerging as the main winners. It is clear to see that the USA, as the pioneer of the shale revolution, will receive the greatest benefits. North America will achieve complete gas self-sufficiency while low prices for hydrocarbons will boost new industrialization; it will also be able to contribute 60–80 million tonnes to the global LNG market, respond flexibly to changing market conditions, and quickly redirect supplies to the most profitable regional markets.

The outcome for China is less obvious and actually quite surprising. How can an import-dependent country with booming gas demand, limited production options, and subsidized domestic prices actually become a winner in this gas ‘Great Game’? In fact China is successfully carrying out a policy of import diversification, rapid construction of the necessary infrastructure, and enhancing its position in other regions by engaging its national companies in the development of their gas resources. It also has its own large reserves of unconventional gas, which could add to the diversification of its supply mix. China’s balanced and forward-looking policy will allow the country to share the fruits of the shale revolution with the USA and benefit from the unique situation that is currently evolving in global gas markets.

Authors: Mitrova, T

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Oxford Institute for Energy Studies
• Journal: Oxford Energy Forum
• Volume: 95
• Pages: 13-16
• Publication date: 2014-02-01
• Edition: Publisher's version
• ISSN: 0959-7727
• Language: English
• Keywords: OIES