Prices of Natural Gas Will Have Own Separate Mechanism Away From Oil Link: BP
As the world continues to rely more on liquefied natural gas (LNG), prices will slowly be given a separate mechanism and move away from being linked to crude oil over the next decades.
"It is a process of growing integration, (that will definitely) change the pricing system in many markets," Christof Ruehl, BP Plc's chief economist and vice president, said at a conference in Oman's capital, Muscat.
However, "it is not a process of two or three years, it's a process of maybe 20, 30 years."
On one hand, in North America where it comes cheaper, gas is priced independent of crude prices. In Europe and Asia, on the other hand, it is linked to oil. Some European gas importers have pursued to lessen the link between gas and oil prices, claiming they are losing money. The gas producers are forced to sell gas for less under long-term contracts.
LNG accounts for 30 per cent of overall gas volumes sold across international borders.
"It has the potential to connect segmented markets," Mr Ruehl said.
As nations grow more increasingly alarmed and concerned over the planet's rising changing global weather patterns, it is not surprising that many will venture into the use of clean energy programmes and methods.
LNG is a super-cooled form of the fuel condensed for transport on hulking supertankers.
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