Zawya: The fight for the global natural gas market

Russia's massive USD 400 billion deal to supply natural gas to China has far reaching global consequences, and it would have a major impact on key liquefied natural gas exporters such as Qatar and Australia.

The deal entails delivery of 38 billion cubic metres of natural gas via pipelines to China, making up roughly 10% of the country's natural gas needs. It's a "move that opens up a range of geopolitical and market possibilities between Russia and the U.S., China and everyone in-between," said Citibank 's Anthony Yuen in a recent note.

It also wipes out a tenth of Chinese demand which could have been supplied by eager LNG exporters. The deal sets a new price benchmark in the LNG world, as China appears to have snagged a deal valued at USD 10 per million cubic feet, much lower than the USD 14-18 being sold by Qatar in Asia.
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