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The natural gas market is undergoing rapid change, fueled by abundant natural gas supply, improved recovery technologies and lower gas prices. While this change will offer substantial opportunity for gas producers, traders, and Liquefied Natural Gas (LNG) merchants, the complexity of this evolving global market will require market participants to adapt their business models to manage new risks, implement smarter more efficient operations and develop agility for global growth.
SunGard has identified three key trends that are shaping the global natural gas market:
Increased Natural Gas Production and its Export Potential is impacting the energy trading and operational side of the natural gas market. An abundant supply of natural gas from North American shale production is driving producers and consumers to develop infrastructure to accommodate the import/export of Liquefied Natural Gas (LNG). Financial trading and logistics solutions will need to be updated in order to manage these new operations.
Converging Gas and Power Markets are driving utility companies to seek holistic technology solutions, such as energy, trading and risk management (ETRM) platforms that can support the purchase, management and delivery of fuels for their power generation operations.
Speculation of the Emergence of the US as a Key Player in the Global Gas Market sparked by the abundance of natural gas in North America has been rekindled. As international demand for natural gas continues to grow, market participants are enhancing both their physical and IT infrastructures by building new facilities, such as LNG plants and by upgrading or adding ETRM solutions to handle the new requirements of international trading.
“As natural gas has become the dominant fuel source for power generation in the US, the establishment of a linkage with global natural gas prices (via LNG exports) will significantly increase price risks for utilities. Market participants should begin to map a systems strategy that ensures they can address the increasing risks and exposures associated with this very dynamic market.” - Patrick Reames, Managing Director, Commodity Technology Advisory.
SunGard provides energy trading, operational and risk management solutions as well as consulting services to help customers address the increasing complexities of the global natural gas market. SunGard solutions for energy help customers achieve growth into new markets with agility and innovation, providing the ability to capture and manage complex natural gas purchase and sales agreements; create and manage nominations across multiple pipelines; manage natural gas storage agreements and perform risk management.
