The ‘Unknown Knowns’ of the Global Gas Market. CEPS Essay No. 16, 16 October 2014

Energy markets evolve at least as quickly as the economies they fuel. But development unfolds at an irregular pace, with starts and stops often precipitated by seemingly unpredictable dynamics. Is it really impossible to forecast these ‘revolutions’, if the past can be seen as prologue? The answer might be in the way we look at future events; even if we accept that some events are unpredictable, we may be able to infer much more about the future trends through a broader reading of available data, thus revealing ‘unknown knowns’ that may be useful in understanding paradigm shifts ahead. This paper presents an analysis of the global gas market, offering views on what the most relevant ‘unknown knowns’ of today look like, and hypotheses about some of the possible game-changing events that the market is likely to face in the short to medium term.

Europe's LNG Strategy in the Wider EU Gas Market. CEPS Policy Brief No. 333, October 2015

In its Communication on an Energy Union published in February 2015, the European Commission committed itself to “explore the full potential of liquefied natural gas (LNG), including as a back-up in crisis situations when insufficient gas is coming into Europe through the existing pipeline system” and to address the potential of gas storage in Europe by developing a comprehensive LNG and storage strategy by the end of 2015 or early in 2016. This is a comprehensible move in the current context. Geopolitical tensions between the EU and Russia explain the EU’s willingness to further diversify its supply sources of natural gas to reinforce its long-term energy security on the one hand, and to strengthen its ability to solve future crises on the other hand. Moreover, the current market dynamics could support diversification towards LNG. Increasing the flexibility of LNG trade, decreasing LNG prices and LNG charter rates and an apparent price convergence between the European and the Asia-Pacific LNG imports would all reinforce the economic viability of such a strategy. This Policy Brief makes three main points: • For the LNG and gas storage strategy to work, it needs to be embedded in the realities of the natural gas market. • The key to a successful LNG strategy is to develop sufficient infrastructure. • The LNG strategy needs an innovation component.