ABSTRACT
The Decision Focus Incorporated (DFI) World Gas Trade Program has been designed to provide insights into, and improved ability to forecast, worldwide and regional natural gas markets over the coming decades. The World Gas Trade Program is a private multi-client activity performed by DFI and The Canadian Energy Research Institute (CERI) over the past year. The centerpiece of the program has been the development of the World Gas Trade (WGT) Model, a large-scale, market equilibrating model of regional and worldwide natural gas and LNG markets, designed to forecast the following quantities over time:
gas prices (from wellhead to burnertip);
production levels;
consumption; and
interregional gas flows (pipeline and ship);
in all major producing and consuming regions and over all major pipeline corridors and LNG routes in the world. The model distinguishes over 40 supply regions and 25 demand regions and spans a forty-year time horizon into the future. The key feature of the model is its ability to generate forecasts of market clearing natural gas prices and volumes, given input data on resource costs and availabilities, transportation costs, and worldwide demand functions for natural gas and competing fuels. It is, as far as we know, the first and only model of its kind.