Within the Asia Pacific region, growth in LNG demand is strong and expected to stay that way, rising from the almost 150 million tons traded globally today to more than 300 million tons by 2015. This demand is driven by the struggle to grow North American gas reserves and production – for the past few years, unconventional gas (CBM, silt/shale, coal) has been the only source of U.S. production growth. Also, the growth, liberalization, and gradual commoditization of a global LNG market in which the U.S. and European markets will set prices.

Qatar will be a swing supplier, and arbitrage opportunities will favor large portfolio players with widespread sources of supply and captive shipping. Pipeline gas demand will mirror LNG demand growth, but is more constrained by cross-border pricing and ownership issues. Prospective pipeline projects to deliver gas from West and East Siberia, Sakhalin, Kazakhstan, and Turkmenistan into northeast Asia, and via the Trans-Asian system into southeast Asia, have been discussed for more than a decade, but are hampered by infrastructure costs, competition between importing countries, and (at least in the case of northeast Asia) an absence of viable commercial frameworks and pricing mechanisms.