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The Energy Transition, LNG And Global Markets

Author: Richard Everett, Chief Strategy and Innovation Officer

The energy transition to provide for a cleaner future is underway and nowhere is a more dramatic change being seen than in Europe. The past decade has seen a significant rise in the importance of gas within the energy mix, whilst the global gas market has become more integrated through increased LNG trade and the growth of gas hubs in the three major markets: Europe, Asia, and the Americas.

The Globalisation Of Gas: Challenges And Opportunities

With the globalisation of gas, it has become increasingly important for market participants to have access to regional and global market views and pricing to stay competitive.

This globalisation of the gas market presents both challenges and opportunities. Liquidity is spread across multiple venues, therefore making it challenging to get a clear picture of the worldwide global gas market. LNG has now transformed the gas market to an increasingly globally priced market with the European TTF contract playing an increasingly important role in benchmark pricing.

How Can Market Participants Get a Complete View Of Global Gas Markets?

So, what does an ideal solution look like for those who need to have a complete view of global gas markets? With liquidity spread across multiple venues, the ability to see all orders from physically brokered markets alongside comparable financial contracts ensures the tightest bid/offer spreads for the benchmark TTF contract – leading to best price execution in a single workflow.

Also having this view across the complete curve – access to the physical spot and prompt markets for immediate delivery through to longer-dated contracts listed as futures and forwards is advantageous. Combine these two elements with access to European liquidity alongside the US and Asian benchmark gas contracts and you have the most comprehensive view of Global gas markets available.

Trayport’s network and solutions fulfil all these requirements with many gas market participants already benefiting from our approach.

Future Outlook

As the global gas market continues to develop and demand grows, we see Canada playing an increasingly important role in its evolution. Canada has a great opportunity to not just participate, but to be at the forefront of progressive change. Eastern Canada as an example, is in a prime position to capitalise. It has low-cost gas, but it is also closer to European demand than many other major projects.

These are interesting and exciting times and we look forward to the journey ahead.

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