International Energy Agency: U.S. gas exports might reach a third of Russian exports in future

(Interfax – October 17, 2012) The amount of gas that the U.S. exports might reach a third of the amount that Russia exports in the medium term, Laszlo Varro, Head of the Gas, Coal and Power Market Division at the International Energy Agency (IEA), said at ‘Gas Day’ at Skolkovo.

American gas exports will play an important role in the future. According to the most optimistic expectations, the U.S. will export a third of the amount of ogas that Russia exports, he said.

Oil has already practically disappeared from power generation in the U.S., while gas is actively penetrating the transport segment, Varro said.

Furthermore, the U.S. will start exporting liquefied natural gas (LNG) in the near future. It will sell 20 billion cubic meters (bcm) of gas at first, but that will only be the beginning – in the future it will play a more and more prominent role in gas exports, he said.

According to the IEA’s forecasts, demand for natural gas on the world stage will expand by 100 bcm a year, or roughly 2.7%, over the next five years. This is a much faster growth rate than for other types of energy resources, Varro said.

The IEA believes that Russia will remain the largest gas exporter to Europe and that Europe will remain the largest consumer, despite all of the talk about diversified supplies, he said.

Addressing the crisis in Europe, Varro said that the recession is having a significant impact on gas demand in the region and that the IEA does not have a very optimistic outlook on the situation. Coal will win back its role as an important source in the energy balance of European countries due to the decrease in its price. Alternative types of energy such as wind and solar energy will continue to be developed, in the IEA’s view. However, this will only occur if the European Union continues to make substantial investments in alternative energy development, Varro said.

The IEA prepared its latest report in June, basing its findings on the situation in March and April of this year. Varro said that he is more pessimistic today than he was in March-April with regards to the European situation. If the crisis continues, the IEA does not rule out revising its forecasts for Europe for next year, he said.