Europe saved $8 billion on its natural gas bill last year because of surging U.S. shale production.
Fatih Birol, speaking as the IEA released its annual gas report, said 2018 was a “golden year” for natural gas. This accounted for 45 percent of total global energy growth, which in turn was the fastest in two decades.
He is saying that the shift in global gas markets is stemming from the U.S. shale gas revolution. It is because of the rapid expansion of the liquefied natural gas industry. Secondly, the EU liberalization of energy markets had forced Russia to change its oil-indexed pricing of gas.
The change began, he said, when rising U.S. gas output led Qatar, the world’s largest LNG exporter, to divert LNG supplies to Europe, shaking up pricing on the continent and widening the influence of the Dutch TTF benchmark price.
“Because of the big challenge from LNG and better regulation, there was a lot of renegotiation of pipeline contracts and we estimate in 2018, Russian pipeline exports to Europe were $8 billion cheaper than they would have been with conventional oil indexation,” he told Reuters.
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