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14.06.2012

China Could Close Window Of Opportunity For Israeli Gas

80% of participants at the World Gas Conference predict that China will surpass the US as the world's largest natural gas producer by 2030.

A poll carried out at the 25th World Gas Conference 2012 in Kuala Lumpur implies that Israel's window of opportunity to sell natural gas to China could close by 2030. 80% of participants at the conference predict that China will surpass the US as the world's largest producer of non-conventional natural gas, produced by fracking, by 2030. The US is the leader in fracking to produce natural gas.

Development of fracking technology has slashed natural gas production costs, cutting gas spot prices in the US 90%, and turned the US from a natural gas importer to a country with enough reserves for the next 100 years.

The US is not currently expected to become a large natural gas exporter, and low domestic prices are therefore not expected to sharply bring down prices elsewhere in the world. However, this picture will change when China becomes a major natural gas producer through fracking. China's Ministry of Land and Resources estimates that fracking will give it 25,000 billion cubic meters (BCM) of gas reserves. The country's gas consumption was 100 BCM in 2011, 20% more than in 2010.

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