Atradius Gas Market Outlook: Regional Gas Prices in the World Inevitably Closer

Amsterdam (ots/PRNewswire) -

After decades with little interesting happening, the global
natural gas market has shown unprecedented dynamism in the past ten
years. This has led to divergent gas prices between regions across
the world. But this trend is expected to reverse. The shale gas
revolution in the United States and strong growth in international
trade of liquefied gas should bring regional prices closer together,
according to the Atradius Gas Market Outlook [http://global.atradius.
com/images/stories/Publications/economic_outlook/Atradius_Economic_Re
search-Gas_Market_Outlook_July_2014.pdf ] .

Atradius [http://global.atradius.com ] observes that regional
prices have rapidly diverged over the past decade. Gas prices in the
US have been falling, reflecting the rapidly growing production of
gas from shale-beds. Gas prices in Asia, on the other hand, have
tripled over the same period and are now by far the highest in the
world. This is because Asian gas prices are linked to the price of
oil which has surged and gas consumption has grown rapidly as a
result of economic development. Europe's gas prices are partially
linked to the price of oil, which explains why they have roughly
doubled. But these trends are expected to change.

First, Atradius expects that the US will quickly become
self-sufficient in gas and prices will gradually climb. This is a
result of the very recent US shale gas revolution which has led to a
production surge. Imports have halved, despite the power sector
having substituted gas for coal. These developments are likely to
last and the US will start exporting liquefied natural gas (LNG) to
Asia or Europe. Gas exports are triggered by the price difference
between the regions.

Second, Atradius expects prices to remain at current levels in
Asia assuming Chinese production rises, US exports develop and the
LNG cost can be contained. Demand is growing fast and has triggered a
boom of LNG imports as local supplies are unable to keep up with the
rise in demand. The surge in demand and the high gas prices have
triggered a flurry of investments in LNG facilities, particularly in
Australia.

Third, Atradius expects the gas prices in Europe to rise
eventually. Focus on environmental issues has led to an EU-wide
trading system of carbon emission and a renewable energy policy in
Germany. Perversely, the measures have reduced gas consumption in the
power sector and encouraged the use of coal: a much more polluting
energy source. Whereas gas production is gradually declining, demand
may pick up on the back of gradually improving economic conditions.
Russia, Europe's main supplier, is expected to benefit, although
commercial and political reasons will push European countries to
diversify suppliers. LNG imports, even from the US, might play a role
over time.

John Lorié, Atradius Chief Economist: "The shale gas revolution in
the US, LNG trade growth and demand surge in Asia are key forces at
work. We think US gas prices will gradually climb and Asian prices
will remain at current levels. And with some upward pressure on
European prices, we see prices in these regions inevitably coming
closer, reversing the trend of the past decade and clearly rising
across the board. Over time we expect the cheap energy advantage
currently enjoyed by the US industry to disappear, and that helps
restore the competitive position of European industry. Dependence on
Russian gas, moreover, will diminish."

About Atradius

The Atradius Group provides trade credit insurance, surety and
collections services worldwide and has a presence through more than
160 offices in 50 countries. Atradius has access to credit
information on 100 million companies worldwide. Its products help
protect companies throughout the world from payment risks associated
with selling products and services on credit.

ots Originaltext: Atradius N.V.
Im Internet recherchierbar: http://www.presseportal.de

Contact:
For further information: Atradius Corporate Communications,
Christine Gerryn, Tel.: +31-20-553-2047, E-mail:
christine.gerryn@atradius.com, www.atradius.com