Abstract
Natural gas plays an important role in energy supply, and its fields of application are diverse. However, the world’s largest growth potential among fossil fuels is attributed to liquefied natural gas (LNG). In the last few years, the U.S. rapidly increased LNG exports, and it is expected that they will further increase the liquefaction capacities. The cost of the LNG value chain is composed of the natural gas price in the country of origin, and the LNG process costs for liquefaction, transportation, storage, and regasification. Thus, the Henry Hub (HH) price in the U.S. is important for U.S. LNG exports to Western Europe. In this paper, gas flows in Western Europe at the beginning of the 2030s are analyzed if the price at HH is higher or lower than expected. Furthermore, the effect of the HH price on monthly U.S. LNG exports are studied. For the calculations, the global gas market model WEGA is used. The results reveal that the price at HH has a significant effect on annual gas flows in Western Europe and also on U.S. LNG exports during the summer. Furthermore, it is shown that pipeline gas in Western Europe will absorb fluctuations of U.S. LNG exports between the presented scenarios.
Highlights
Introduction and Related WorkNatural gas plays an important role in energy supply and its fields of application are diverse: heat generation, hot water preparation, power generation and industrial applications
The results reveal that the price at Henry Hub (HH) has a significant effect on annual gas flows in Western Europe and on U.S liquefied natural gas (LNG) exports during the summer
The left side shows the gas flows in Western Europe with a 20% reduced gas price for HH compared to the base case
Summary
Natural gas plays an important role in energy supply and its fields of application are diverse: heat generation, hot water preparation, power generation and industrial applications. If the revenue is below the SRMC, the terminal will be shut down These examples show that the price at HH is important for U.S LNG exports and for worldwide gas markets. In 2014, Morydee, Gabriel, and Avetisyan [20] applied the World Gas Model (WGM) to analyze effects of U.S LNG exports on global natural gas markets. Baron et al [22] applied the Global Natural Gas Model (GNGM) for long-term analyses in 2015 They calculated U.S LNG export prices and export volumes in 63 scenarios. The analyses in this paper are performed with the global gas market model WEGA (abbreviation of Weltweites Gasmarktmodell) of Stadtwerke München GmbH (SWM) With this model, worldwide gas flows and gas prices can be calculated in daily resolution for different scenarios.
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