The executive director of the International Energy Agency said Europe saved $8bn on its natural gas bill last year because surging U.S. shale production and a shake-up in EU energy markets forced Russia to change its gas pricing mechanism.
Fatih Birol, speaking as the IEA released its annual gas report Friday, said 2018 was a “golden year for natural gas, which accounted for 45% of total global energy growth, which in turn was the fastest in two decades,” he said. Demand for natural gas grew 4.6% in 2018, led by the US and China.
He said the shift in global gas markets stemmed from the US shale gas revolution, a rapid expansion of the liquefied natural gas industry and EU liberalisation of energy markets, had forced Russia to change its oil-indexed pricing of gas.
The change began when rising US gas output led Qatar, the world’s largest LNG exporter, to divert LNG supplies to Europe, shaking up pricing on the continent and widening the influence of the Dutch TTF benchmark price.
