A New Age of Disruption

Shale gas disrupted the U.S. energy industry. Now, cheap liquefied natural gas (LNG) is set to do the same globally, compelling coal-to-gas switch much faster than previously thought and heralding a "new age of disruption", according to a research paper by Morgan Stanley published in July 2019. The Paris-based International Energy Agency (IEA) predicted that by 2024, the United States will be the largest exporter of LNG in the world and China the largest importer.

In 2018, the United States exported over 330 ships of LNG and China imported 864 ships. By 2024, the U.S. will have the capacity to export 1838 cargo ships of LNG while China's import is estimated to be over 1371 ships. LNG, a clean burning and cheap thermal energy, is rapidly replacing oil and coal as a primary energy all over the world. This is particular true in China where LNG plays a key part in the government's War Against Air Pollution.

With the large availability of cheap shale gas, the United States will act as a swing producer of LNG in the world markets, according to Morgan Stanley, "Long-term LNG prices will hover between marginal costs to produce and ship U.S. LNG during periods of oversupply and the break-even price of new projects during periods of supply tightness", the reseach paper says.

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