2. 2
Agenda
1. Balancing regional gas supply and demand is a global
equation
2. Increasing gas demand is driving supply side efficiencies
3. Inter-bank market failure is leading to market change
4. Future market will deliver energy security and price
stability
5. Summary
3. 3
Middle East gas exports to the global market necessitates that regional
supply and demand is balanced as part of the global equation
Americas
Europe
Russia & CIS
Asia PacificMiddle East
& Africa
4. 4
• Global growth in energy demand –
particularly emerging markets
• Reduce global warming / pollution
through cleaner gas fired electricity
generation to replace / reduce use of
oil and coal
• Increase energy security as
countries diversify their energy
demand across renewables,
nuclear, gas and oil
• Gas OPEC
• Create economic and political
inter-dependence to facilitate
infrastructure investment (replace
military dependence)
• Share extraction, refinement and
transportation technologies (e.g.
capture more associated gases
rather than flaring)
• Develop strategic facilities to
smooth the supply chain
(bunkering, shipping & terminals,
pipelines)
‘Gas OPEC’ cooperation should deliver supply side efficiencies to meet
global demand driven by growth, climate change and energy security
Demand Supply
5. 5
Inter-bank market
The inter-bank market can no longer solve the supply & demand equation
therefore should be replaced by a global network of regulated exchanges
Bank Bank Consumers
Consumers
EUR
RUR
JPY
CNY
US$
GBP
AU
Producers
Exchangetraded
BankProducers
OTCtraded
6. 6
The region, via Gas OPEC, has an opportunity to establish price stability
and energy security by leading the development of exchange markets
• Formalise Gas OPEC cooperative
framework and organisation
• Expand regional investment in global
gas supply chain infrastructure and
services
• Commit long-term & large volumes of
regional gas production and other
commodities to exchanges for trading
• Transparent regulated exchange environments will improve price stability and facilitate stable
long-term supply-chain investment
• Ubiquitous market access for producers and consumers creates political & economic inter-
dependence and improved energy security
Region & Gas OPEC Exchange Network
Balanced supply and demand to deliver price stability and energy security
• Continue regional development of
exchanges and markets
• Create gas & other physically deliverable
commodity futures from long-term &
large volume supply commitments
• Trade futures across network of regional
and global exchanges with consistent
regulation and price / volume visibility
7. 7
Summary
• Increasing globalisation of the gas market requires the supply and demand equation
be balanced on a global basis
• ‘Gas OPEC’ production and investment coordination will be required to meet global
demand growth and remove inefficiencies in the supply chain thereby ensuring
smooth and reliable delivery of gas to customers
• The emergence of a global network of regulated exchanges to replace the inter-bank
market will provide the price and volume visibility required to effectively balance the
supply and demand equation
• The region, through Gas OPEC, has an opportunity to improve price stability and
energy security by expanding its investment in the global gas supply chain and selling
large volumes of gas production via the emerging global exchange network
SBI – Bridging Global Energy
