Oil & Gas Journal: Eurasian pipelines threaten LNG growth

Early LNG suppliers to the East Asian market, such as Malaysia and Indonesia, may be able to retain their market positions based on existing long-term contracts, but newer projects in Australia, Papua New Guinea, Persian Gulf states, and Mozambique could find themselves at commercial disadvantage if overland Eurasian infrastructure expansion proceeds, with fundamental consequences for the oil and gas industry's plans for hydrocarbon exploration in deep water and other frontier areas.

While Western Europe must address its undue natural gas dependence on a potentially hostile Russia, massive increases in LNG exports from North America, Australia, and the gulf states over the next 10 years will double supply capacity and create serious competition for Russia and its Caspian region neighbors in international gas markets.

At the same time, massive growth in gas demand, led by China and its East Asian neighbors, provides Eurasian exporters with the opportunity to aggressively exploit their huge reserves and diversify their own dependence on Western European gas markets. The Western perspective of illegal Russian action in Crimea and complicity in a downed passenger jet has led to trade-impeding sanctions. But an economic imperative of securing energy for their high-growth economies dominates the East Asian view.
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