Middle East gas producers should step up economic diversification plans by easing reliance on gas exports as major shale discoveries in the US and other countries could create a glut in the global gas market, the IMF has said. In a working paper, the Washington-based International Monetary Fund said it saw a gradual decoupling between oil and gas prices, citing such developments in the US, which it expected to become a gas exporter. It said the decoupling coincided with a significant increase in the production of non-conventional gas, especially shale gas in the United States, the world’s largest hydrocarbon importer and consumer. The paper said the additional supply has discontinued plans for sizable LNG imports into the US, adding that some even suggest that the US could turn into a “significant gas exporter” in the coming period. The report, however, noted that in Algeria, one of the world’s largest gas exporters, the impact of spot oil prices on its contracted gas price remains strong but export volumes are under pressure. Oil prices and industrial activity have a significant and important impact on Algerian natural gas prices, it added. Copyright 2011, Emirates 24/7. All rights reserved.

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